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    PESI
    Earnings call· Jun 2026(Q2 FY26)

    PERMA FIX ENVIRONMENTAL SERVICES Q2 FY26 earnings call PESI

    Aug 12, 2026 Source

    Executive summary

    Perma-Fix Q2 FY26 — Operational Milestones Despite Financial Miss

    Perma-Fix's second quarter saw financial results below expectations, primarily due to delayed waste processing and lower-margin inventory work. However, the company achieved significant operational milestones, including a major Hanford IDIQ contract award and continued growth in its Nuclear Services segment. Management expressed confidence in the second half of the year, driven by the ramp-up of Hanford waste streams and ongoing permit expansions to meet future demand.

    Highlights

    5

    • Secured master IDIQ for Hanford tank waste operations with a maximum value of approximately $4.4 billion.

    • Treatment-related backlog grew 29% from $12.2 million to $15.7 million QoQ.

    • Nuclear Services revenue grew 44% year-over-year to $4.6 million.

    • Services backlog stands at over $17 million for the next 18 months.

    • Completed public offering with net proceeds of approximately $21 million, strengthening the balance sheet.

    Concerns

    5

    • Revenue was $12.9 million, below expectations and down from $14.6 million in Q2 FY25.

    • Reported a net loss of $6.2 million, compared to a net loss of $2.7 million in Q2 FY25.

    • Basic and diluted loss per share was $0.32, compared to $0.15 in Q2 FY25.

    • Treatment segment revenue declined approximately $3.1 million YoY due to lower processing volumes and unfavorable waste mix.

    • Customer-directed changes delayed processing of Hanford-related waste from Q2 into Q3, causing a cost/revenue mismatch.

    Guidance & targets

    5
    CategoryTargetConfidence
    Hanford Grouting Volume (AP-106)
    60,000 gallons per month
    high materiality
    High
    Hanford Grouting Volume (AMPS)
    130,000 gallons per month
    high materiality
    High
    Total Hanford Grouting Volume
    9 million gallons annually
    high materiality
    High
    Grouting Permit Capacity Expansion
    to meet DOE objectives (up to 9 million gallons annually)
    high materiality
    Medium
    Delayed Waste Processing
    caught up
    medium materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Treatment
    Revenue declined approximately $3.1 million from prior year, reflecting lower processing volumes and unfavorable waste mix, which resulted in higher treatment and other variable costs and lower gross profit. Customer-directed hold on processing and focus on previously stored waste were primary drivers.
    		$8.3 million-27.2%——
    Nuclear Services
    Revenue was $1.4 million higher than prior year, driven by contributions from several new project awards, including the Lawrence Livermore Master Task Agreement. Gross profit improved modestly year-over-year.
    		$4.6 million44%——

    Operational metrics

    19
    Net loss
    $6.2 millionvs. $2.7 million net loss in Q2 FY25
    Q2 FY26

    Primary driver was cost incurred in Q2 for delayed waste processing, with associated revenue moving to H2.

    Loss per share (basic and diluted)
    $0.32vs. $0.15 loss in Q2 FY25
    Q2 FY26

    Reflects the net loss for the quarter.

    SG&A expenses
    $379,000 decreaseYoY decrease
    Q2 FY26

    Primarily reflected lower marketing, E&P, and credit losses, partially offset by higher legal costs.

    Cash balance
    $20.5 millionvs. $11.8 million at year-end 2025
    Q2 FY26

    Reflecting the successful equity offering completed in May.

    Working capital
    $18.4 millionimproved
    Q2 FY26

    Improved liquidity and visibility into future revenue.

    Capital expenditures
    $2.9 million
    YTD

    Invested in capital expenditures and other investing activities, with most directed towards strategic capital projects.

    Cash from financing activities
    $20.9 millionprovided cash
    Q2 FY26

    Primarily from the May equity raise.

    Total debt
    $2.1 million
    Q2 FY26

    Maintaining a conservative capital structure.

    New waste receipts
    $4.1 million increaseQoQ increase
    Q2 FY26

    Increased over the first quarter, reflecting improved customer demand and visibility.

    PFAS future award opportunities pipeline
    nearly $8 million
    current

    Within the current pipeline of bids for PFAS services.

    Total Hanford waste inventory
    56 million
    current

    Waste stored in tanks at Hanford, representing a significant cleanup mission.

    Throughput increase projection
    300%more throughput
    future

    DOE projects the approach will deliver up to 300% more throughput.

    Treatment and disposal cost reduction
    from $1,200 to under $50
    future

    DOE projects cost reduction in contrast to vitrification costs.

    Hanford IDIQ maximum quantity
    50 million
    2027-2041

    Maximum cumulative quantity for the master IDIQ contract.

    Hanford IDIQ maximum value
    $4.4 billion
    2027-2041

    Maximum value for the master IDIQ contract, shared among all subcontract holders.

    Grouting production uptime expectation
    50%
    future

    RFP specifically said about 50% production, meaning they'll be up 50% with grouted waste and down as they move from tank to tank.

    DFLAW waste receipts
    35,000 gallonsvs. ~10,000 gallons/month average
    July

    DFLAW has been chugging along at about 10,000 gallons a month on average, but did 35,000 gallons in July and expects to beat that significantly in August.

    Perma-Fix Northwest current grouting capacity
    1.2 million gallons
    current

    Existing permitted grouting capacity.

    Perma-Fix Northwest storage capacity
    650,000 gallons
    current

    Current storage capacity, with permit mod to increase to 800,000 gallons.

    Orderbook & backlog

    2
    Treatment backlog$15.7 million2026-06-30

    29% QoQ increase; vs. $13.1 million at Q2 FY25 end

    Services backlogover $17 million2026-06-30

    Expected over the next 18 months.

    Product announcements

    1
    ProductTypeDetails
    PFAS Gen 2 unitexpansion

    Deals & partnerships

    1
    Mirion TechnologiesStrategic partnership under Small Business Administration's Mentor-Protégé Program

    Combines Perma-Fix's treatment infrastructure, remediation capabilities, and project management with Mirion's radiation detection technologies and measurement/instrumentation expertise to strengthen position for larger, more technically demanding DOE cleanup missions.

    Capital programs

    1
    Perma-Fix Northwest Grouting Upgradesunderway
    Funding: portion of $21 million net proceeds from public offering
    Start: Q2 FY26

    Benefit: Expanded grouting capacity from 1.2 million gallons/year to meet DOE objectives (up to 9 million gallons annually)

    Upgrades to existing buildings, infrastructure (HVAC, power, concrete), and installation of new mixers to support larger volumes and meet DOE demand for Hanford tank waste. Permit modification is a critical path.

    Risks & headwinds

    4
    Going concern disclosure

    Included in Form 10-Q

    Mitigation: Ended Q2 with $20.5 million cash, $2.1 million total debt; existing liquidity, anticipated operating cash flows, and borrowing availability expected to be sufficient for next 12 months. Credit agreement with PNC Bank extended to May 2030.

    Waste shipment dependency on U.S. government customersOngoing

    Forecasts depend on waste shipments and project activity directed by U.S. government customers, which are not guaranteed.

    Mitigation: Diversifying with Nuclear Services and PFAS, pursuing long-term IDIQ contracts, and strengthening balance sheet.

    DFLAW production issuesNear-term

    Currently running at ~10,000 gallons/month on average, below goal of 100,000 gallons/month.

    Mitigation: DFLAW facility is working through production issues and associated equipment modifications; feed system replaced, emission systems being addressed. Expecting ramp-up in next couple of quarters.

    Regulatory considerations for permit expansionThrough Q2 FY27

    Permit modification process expected to take about a year, potentially nine months, with a 60-day public comment period.

    Mitigation: Working collaboratively with the Department of Ecology; aggressive turnaround by state regulators suggests support for the program. Expecting permit in place for large volume increase by Q2 FY27.

    What to watch in Q3 FY26

    5

    Delayed Waste Processing

    end of Q3 FY26
    CurrentDelayed from Q2 FY26
    TargetCaught up by end of Q3 FY26

    Why it matters

    Impacts Q3 revenue recognition and profitability, crucial for financial recovery.

    On the delayed waste streams, we expect to begin processing shortly and to be caught up by the end of the third quarter.

    Q&A highlights

    6

    Can you elaborate on potential grouting volumes for late 2026 and 2027, especially with the RFP starting in 2027 and excess capacity on the East side?

    Management detailed DOE's public projections for grouting volumes: 60,000 gallons/month from AP-106 starting late 2026 through 2027, and 130,000 gallons/month from AMPS by 2028. They expressed confidence in receiving a task order soon based on DOE's public graphics and plans, and highlighted the long-term goal of 9 million gallons annually by 2030.

    “Along within that graph, it also has some anticipated volumes and coming out of the TSCR or coming from AP-106, which, again, as I said before, will be replenished by the TSCR, they're anticipating that they'll be able to ship 60,000 gallons per month beginning in 2026 and which we anticipate to be late in '26 and to maintain that 60,000 gallons a month for grouting through 2027.”

    asked by Aaron Spychalla · answered by Mark Duff

    3 min read7 chapters

    Detailed Narrative

    01

    Hanford IDIQ Contract Award

    Perma-Fix's Northwest facility was awarded a master IDIQ subcontract for tank waste operations and closure at the Department of Energy's Hanford site. This contract, with a maximum value of approximately $4.4 billion shared among subcontractors, covers task orders from 2027 through 2041. The award positions Perma-Fix as a key provider for grouting and disposal, supporting the DOE's priority to accelerate risk removal from 56 million gallons of waste stored at Hanford.

    02

    Dual Glass-Plus-Grout Strategy

    The DOE has adopted a dual glass-plus-grout strategy for Hanford, projecting 300% more throughput and reducing treatment costs from $1,200 to under $50 per gallon compared to vitrification. Perma-Fix Northwest is specified as the grouting provider for the EMF secondary waste effluent stream, with initial volumes of 60,000 gallons per month from the AP-106 tank anticipated to begin in late 2026, increasing to 130,000 gallons per month by 2028 from the AMPS system. The long-term goal is 9 million gallons annually by 2030.

    03

    Q2 Financial Performance Drivers

    The company's Q2 financial results were below expectations, with revenue of $12.9 million and a net loss of $6.2 million. This was primarily due to customer-directed changes in treatment protocols for Hanford-related waste, which delayed processing and revenue recognition from Q2 into Q3. Additionally, several new services projects started later than anticipated, and the company processed lower-margin, previously stored inventory waste, further compressing treatment margins.

    04

    Nuclear Services Growth and Strategic Importance

    The Nuclear Services segment demonstrated strong growth, with revenue increasing 44% year-over-year to $4.6 million. This segment provides stability and acts as a feeder into the Treatment segment by generating material that flows through the company's treatment plants. The company also announced a strategic partnership with Mirion Technologies under the SBA's Mentor-Protégé Program to enhance capabilities for larger and more complex cleanup missions.

    05

    PFAS Platform Advancement

    The PFAS platform continues to advance with completed treatment work for commercial and government customers and the installation of a Gen 2 unit to expand capacity. Despite a slowdown in receipts through May, sales and processing revenues have begun to increase through the summer, supported by new awards and a pipeline of nearly $8 million in future opportunities. The technology offers permanent destruction of PFAS with no emissions, providing significant value over incineration.

    06

    Permit Expansion and Infrastructure Upgrades

    Perma-Fix Northwest is pursuing a permit modification to expand its grouting capacity from 1.2 million gallons per year to meet DOE objectives, potentially up to 9 million gallons annually. The company is investing in infrastructure upgrades, including new mixers and facility modifications, with completion expected by Q3 2027. This expansion is critical to handle the anticipated volumes from both East and West Tank areas at Hanford.

    07

    Balance Sheet and Liquidity

    The company ended the quarter with $20.5 million in cash, up from $11.8 million at year-end 2025, following a successful equity offering that generated approximately $21 million in net proceeds. Working capital improved to $18.4 million, and total debt remained conservative at $2.1 million. The credit agreement with PNC Bank was extended from May 2027 to May 2030, further strengthening long-term liquidity.

    AI-generated summary of the company’s earnings call. Not investment advice.