FTEK

Image source: The Motley Fool. Wednesday, Aug. 5, 2026 at 10:00 a.m. ET Chairman, President, and Chief Executive Officer - Vincent Arnone Chief Financial Officer - Ellen Albrecht Operator: Greetings. Welcome to the Fuel Tech, Inc. 2026 Second Quarter Financial Results Conference Call and Webcast. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to Devin Sullivan, Managing Director of The Equity Group. You may begin. Devin Sullivan: Thank you, Jasmina, and good morning, everyone. Thank you for joining us today for Fuel Tech's 2026 Second Quarter Financial Results Conference Call. Yesterday after the close, we issued a press release, a copy of which is available at the company's website, www.ftek.com. Our speakers for today will be Vince Arnone, Chairman, President, and Chief Executive Officer, and Ellen Albrecht, the company's Chief Financial Officer. After prepared remarks, we will open the call for questions from our analysts and investors. Before turning things over to Vince, I'd like to remind everyone that matters discussed on this call, except for historical information, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech's current expectations regarding future growth, the results of operations, cash flows, performance, and business prospects and opportunities, as well as assumptions made by and information currently available to our company's management. Fuel Tech has tried to identify forward-looking statements by using words such as anticipate, believe, plan, expect, estimate, intend, will, and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including but not limited to those discussed in Fuel Tech's Annual Report on Form 10-K in Item 1A under the caption of Risk Factors and subsequent filings under the Securities Exchange Act of 1934 as amended, which could cause Fuel Tech's actual growth, results of operations, financial condition, cash flows, performance, business prospects, and opportunities to differ materially from those expressed in or implied by these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reasons. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in the company's filings with the SEC. With that said, I'd now like to turn the call over to Vince Arnone. Vince, please go ahead. Vincent Arnone: Devin, good morning, and I'd like to thank everyone for joining us on the call today, and we apologize for the technical difficulties. Before I review our results, I want to acknowledge that, as announced last night, this will be my final earnings call as President and CEO of Fuel Tech. Effective August 10, 2026, Ramesh Nuggihalli will succeed me in this role. I will share some additional thoughts on this transition at the conclusion of my remarks, but first, let's discuss our performance for the second quarter. Our performance in the second quarter was improved versus the prior year period across both of our business segments. Consolidated revenues rose 17% to $6.5 million, with our APC and FUEL CHEM business segments delivering double-digit revenue growth of 11% and 21% respectively. We continued to make progress toward commercialization with our Dissolved Gas Infusion, or DGI, business initiative, and we ended the quarter in a strong financial position with cash, cash equivalents, and investments of approximately $30 million and no debt. We are pleased with our performance at the midpoint of the year, and we remain optimistic about the outlook for each of our business segments for full year 2026. Let's begin with our APC business segment. On our last call, I noted that we had secured our largest set of awards in recent history, totaling approximately $10 million in contracts with utility and industrial customers. As a reminder, these awards were anchored by a contract for the integration of our selective catalytic reduction technology with 2 new natural gas-fired turbines for a large, publicly-owned Midwest municipal utility. The installation of these new GE Vernova turbines will increase the plant's output by approximately 100 megawatts, with the expansion expected to become operational in 2029. I'm pleased to report that engineering work has commenced on this project and equipment will be ready to deliver in the fourth quarter of 2027. In combination, these awards drove our consolidated APC backlog to $14.3 million at June 30, 2026, which was the largest quarter-end backlog that we had reported since 2018. Last week, we were pleased to announce new APC contracts valued at $2.6 million that addressed the needs of 2 industrial customers. One, a new customer that is active in the gas infrastructure market space, and the other, a long-term recurring customer. Both customers required our SCR technology to address their emissions reduction requirements. In our last quarterly conference call, we had noted that these contracts were close to being awarded. Inclusive of these new awards, our effective backlog as of today is approximately $17 million. With respect to the larger data center opportunity, the U.S. data center market remains in an historic boom, driven primarily by AI, cloud computing, and hyperscale deployments. Demand continues to exceed supply in most major markets. Capital investment is setting records, and developers are aggressively pursuing new projects. However, the industry is increasingly constrained by 4 major factors. First, power availability, which is the single largest bottleneck. Second, permitting and zoning delays. Third, growing local community opposition. And lastly, supply chain shortages for electrical equipment and skilled labor. The result is a market where capital is abundant, but getting projects energized and operational is becoming increasingly difficult. Regarding power generation specifically, many of the major gas turbine suppliers have delivery lead times of greater than 5 years for large turbines, and many are evaluating investments in an incremental manufacturing capacity. As a result, we are seeing more data center development using aeroderivative turbines and, in some cases, reciprocating engines as a source of power for the data centers. With respect to Fuel Tech's participation in this market space, our sales pipeline for these opportunities remains strong and approximates $75 million to $100 million per project integrating our SCR technology with power generation sources. Please note that the value of the pollution control scope of supply represents a very small fraction of the estimated total AI infrastructure spend. I want to again emphasize that in all instances, we are a subcontractor to the data center integrator or to the turbine or engine OEM. Our role remains to support the needs of our direct customers regarding the design and delivery of a pollution control system that can best benefit the application. Beyond that, our knowledge regarding project funding, approval, and timing is generally limited. At present, we are in various stages of participation in project opportunities for several different data center projects in conjunction with integrators and turbine and engine OEMs, including some of the largest companies in the industry. All of these inquiries are for pollution control systems, primarily SCR, in support of the development of on-site power generation. The size of these projects ranges from a few systems for up to 30 to 40 units per project, with pricing at about $1 million to $4 million per unit. Regarding timing, on our last call, I had mentioned that there were 2 opportunities that could come to fruition in the second quarter. One of them did not continue to develop, and the timing of the second one had been delayed. That said, there is a possibility that 1 of our inquiries can convert to a commercial award based on our conversations with the various parties involved before the end of Q3. With this specific customer, we have been discussing a capacity reservation and long lead time procurement agreement where we would guarantee available capacity and for fabrication capability and longer lead time items for our technology with our supply chain in exchange for a capacity reservation fee. We are watching this development closely. However, the remainder of the inquiries will develop further as we move throughout the year. We believe that we are still very much in the running to capture a share of these opportunities, and we remain optimistic about our prospects for 2026. As a side note, none of these project opportunities are in states that have placed a moratorium on data center development, including New York. Regarding our near-term APC sales pipeline, exclusive of the data center opportunities, we are currently tracking $8 million to $10 million in additional potential awards for project opportunities integrating our SCR and other pollution control technologies with power generation sources. We would expect to close on at least $3 million to $5 million of these awards before the end of the third quarter or early in the fourth. Now, let's discuss our FUEL CHEM business segment, which produced another solid quarter with revenues rising 21% to $3.7 million for the quarter versus prior year, primarily due to increased operational dispatch at legacy accounts. Our FUEL CHEM segment is benefiting from high dispatch in these warm summer months, with a particular benefit to our legacy units. We expect to see strong performance in Q3 and continue to expect that segment revenues for the full year will approximate last year's results. Last quarter, we disclosed that a FUEL CHEM customer had temporarily halted a 6-month commercially priced demonstration program that commenced in early November of 2025. The halt was due to an issue with the plant's operations with no relation to FUEL CHEM's performance. In fact, the customer noted that we helped produce a material reduction in downtime and maintenance costs, largely attributed to decreased offline cleaning. The customer is planning to restart the program in mid-Q4 2026, and we expect to realize a modest impact on fourth quarter results. That said, if we are able to convert this account to a commercial account, 2027 would see a material benefit as this program could contribute approximately $2.5 million to $3 million in revenue on an annualized basis based on running the program full-time with historic FUEL CHEM gross margins. In addition to this demonstration, we are pursuing at least 1 other coal-fired unit opportunity that could result in a demonstration before the end of the year. We will provide more color on this opportunity on our third quarter earnings conference call. I wanted to mention one last point regarding our FUEL CHEM segment, and that is the status of an opportunity that has been dormant for some time, and that is our opportunity in Mexico. As we have discussed previously, this promising but still developing opportunity is tied primarily to the desire of the Mexican government to put emphasis on emissions and pollution control, specifically as it relates to the use of heavy fuel oil generated from their refining operations as fuel for power generation. Heavy fuel oil is being used in abundance to generate power in Mexico, as this fuel is readily available, inexpensive, and provides a transitional source of power generation in Mexico while other sources are being developed. Conversations with our partners in Mexico have recently been rekindled. We are hopeful that working together, we can expand the provision of our chemical technology in that country. On the regulatory front, we have seen that the current administration is pursuing both the rollback of specific regulations that had been put in place previously and the implementation of new regulations that are less restrictive than those currently in place. These proposed rollbacks do not loosen the nitrogen oxide emissions reduction requirements for any sources and could potentially extend the life of some coal and natural gas-fired units that may not have to reduce their emissions profile. We will take the opportunity, where applicable, to offer retrofit and maintenance solutions to accommodate the extension of useful life. Regarding the implementation of new rules, earlier this year, we reported that EPA had issued New Source Performance Standards, also known as NSPS, for new gas turbines which were published in the Federal Register on January 15th. A category of gas turbines was created called temporary power turbines, and it's applicable to units below 85 megawatts and installed to run for 24 months or less. These units will be required to achieve NOx levels of 25 ppm, which may not require SCR for all turbines. Turbines greater than 5 megawatts with high operating capacity will need to meet 15 ppm NOx, likely requiring SCR. Turbines greater than 85 megawatts will need to get to 5 ppm NOx, which will require SCR in almost all cases. With this rule in place, power generation developers will need to decide how best to proceed with their air pollution control solutions for their new sources of power generation. Based on the discussions that we have had with our potential customer base, we are not aware of this new regulation having a significant negative impact on decision making regarding the implementation of pollution controls. We know that there are legal challenges to the NSPS that could affect the timing or final requirements of the rule, and we will continue to monitor the situation. It is important to note that state-specific permitting requirements can vary from the new federal regulation. It is also important to note that outside of the NSPS requirements, the use of multiple small gas turbines working together could classify them as a major source for emission control. Major sources are governed by other regulations and are often required to meet more stringent NOx emissions, which would require SCR. Now, I'd like to turn the discussion to DGI. An extended DGI demo at a Western U.S. fish hatchery was completed at the end of the second quarter, and the DGI technology delivered strong performance with optimized oxygen delivery, program-based, and efficient operation, program cost savings, and fish growth. We have been asked by this client to prepare a proposal for a DGI system that could meet the oxygen requirements of the full hatchery, and we are in the process of developing that proposal right now. Our second trial at a Southeast U.S. municipal wastewater facility is now on extended month-to-month rental in follow-up to the original 6-month rental term, and we expect this trial to generate approximately $100,000 in rental revenue in 2026. With this trial, the client reported that odor-related complaints in the area surrounding the plant have been dramatically reduced, and we have been working with the customer to assist them in assessing their oxygen delivery needs. This client is in the process of upgrading their primary aeration system, and this upgrade will be complete later this year. Upon completion, the client will evaluate the need for the supplemental aeration that DGI has been providing. Additionally, we are currently in discussions with multiple other end markets of interest for DGI, including pulp and paper, food and beverage, chemical, petrochemical, and horticulture. As noted earlier, we are optimistic about our outlook for 2026, driven by an expanded project backlog and opportunity landscape at APC, anticipated strong results at FUEL CHEM, and progress toward our first commercial DGI contract. Taking all of this into account, we expect that revenues for 2026 will exceed the level of 2025, with FUEL CHEM approximating 2025 revenues and APC exceeding 2025 performance. I want to emphasize that while our backlog has risen substantially, the majority of the revenue assigned to the new large APC contract award that I discussed earlier will be generated in 2027. Further, this 2026 APC outlook excludes the benefit of specific data center awards, which would be additive to this forecast. Now, before I turn the call over to Ellen, I'd like to spend a few moments on my upcoming retirement and the transition of leadership at Fuel Tech. After considerable reflection, I decided that the time had come for me to retire from Fuel Tech, concluding what has been a remarkable journey of 27 years with the company, including the privilege of serving as President and CEO for the past 11 years. When I joined Fuel Tech nearly 3 decades ago, I could not have foreseen what lay ahead. Together, as a team, we have navigated changing markets, evolving technologies, and periods of growth and transformation. Along the way, I have been fortunate to work alongside extremely talented colleagues and have experienced business protocols in more than 15 countries and with a multitude of different companies. If there is 1 lesson I have learned throughout my career, that success in business and happiness in life are always driven by people. To our employees, thank you. Your diligence, commitment, and teamwork have been the foundation of everything we have accomplished. To our Board of Directors, thank you for your counsel and stewardship. And to our shareholders, thank you for your trust and investment, which have enabled us to pursue our mission and work to create long-term value. Serving this company has been one of the greatest honors of my professional life. I am proud of what we have built together and optimistic about Fuel Tech's future. And while I am retiring from my day-to-day responsibilities, I will remain a proud advocate of Fuel Tech and will continue to serve on the Board as a non-independent director. With that said, I'd like to say a few words about my successor, Ramesh Nuggihalli. Ramesh's selection was the result of a thorough, months-long executive search process conducted by the Board, which involved the evaluation and interviewing of multiple qualified candidates, and I'm very pleased that Ramesh has agreed to join the Fuel Tech team. Ramesh is a global, commercially oriented operating executive who has led growth, restructuring, and operational improvement initiatives across industries directly relevant to Fuel Tech, including environmental technologies, power generation, water infrastructure, and engineered systems. He has held senior leadership roles at General Electric, AMETEK, Tyco, Pentair, Xylem, and most recently, CECO Environmental, with expertise spanning capital allocation, growth strategy, M&A, and operational improvement. In getting to know Ramesh during this process, I am confident that his background, temperament, and accomplishments make him exceptionally well-positioned to lead Fuel Tech into its next chapter of growth and development. Now, for the last time, I'd like to turn the call over to Ellen for her comments on our financial results. For those of you that are not aware, I have had the privilege of working alongside Ellen for most of my 27 years at Fuel Tech. And it would be impossible in a few brief remarks to fully capture the breadth and impact of her contributions to our organization. Ellen, please go ahead. Ellen Albrecht: Thank you, Vince, and good morning, everyone. For the quarter, consolidated revenues rose by 17% to $6.5 million from $5.6 million in the prior year period, driven by increases in both FUEL CHEM and APC segment revenues. Consolidated gross margin for the second quarter declined to 41% of revenues from 46% in the last year's first quarter as a result of lower segment gross margins for both the FUEL CHEM and APC segments. FUEL CHEM revenue rose 21% to $3.7 million from $3.1 million, primarily due to increased operational dispatch at legacy accounts. Segment margin declined slightly to 45% from 47% in the second quarter of 2025 due to demonstration costs, increased freight costs, and additional labor costs for unit maintenance. APC segment revenue rose 11% to $2.8 million from $2.5 million, primarily related to the timing of project execution on existing contracts. Despite higher segment revenue, APC segment gross margin decreased to 36% from 44%. The decrease in APC margin reflected project mix, contract timing, and costs associated with project execution. We expect segment margins to continue to vary based on revenue mix, customer activity, project milestones, and related cost levels. Consolidated APC segment backlog on June 30, 2026 was $14.3 million compared to backlog of $7 million at December 31, 2025. Backlog at June 30th included $11.3 million of domestically delivered project backlog and $3 million of foreign delivered project backlog. The company's backlog and recently awarded contracts are expected to affect revenue recognition in future periods. However, the timing of revenue recognition may vary based on customer schedules, project milestones, contract terms, and execution risks. Approximately $10.5 million of the $14.3 million backlog at June 30th is expected to be recognized in the next 12 months, barring no customer-driven delay. SG&A expenses rose to $3.6 million in the second quarter compared to $3.3 million last year. As a percentage of revenue, SG&A expenses declined to 55% from 60% in the prior year period, reflecting higher consolidated sales growth compared to SG&A growth during the quarter. For 2026, we continue to expect SG&A expenses will range between $14.5 million to $15 million. Research and development expenses for the second quarter rose to $646,000 from $490,000 during the prior year period. Our R&D investments largely reflect our ongoing investment in our water and wastewater treatment technologies, specifically our DGI systems. Our investment in DGI will continue throughout 2026 to support ongoing site demonstrations and other growth initiatives as we ramp up towards commercialization later this year. Operating loss in the second quarter was $1.6 million compared to a loss of $1.3 million in the prior year period. Net loss was $1.2 million, or $0.04 per diluted share, compared to a net loss of $689,000, or $0.02 per diluted share in the prior year period. Adjusted EBITDA loss was $1.2 million in the second quarter compared to an adjusted EBITDA loss of $948,000 in the prior year period. Lastly, moving to the balance sheet, our financial condition remains strong. As of June 30th, we had total cash, cash equivalents and investments of $29.6 million, which was comprised of cash and cash equivalents of $7.6 million and short and long-term investments of $22 million. Shares outstanding at quarter end were approximately 31.2 million, equating to cash per share of $1.05. Working capital was $20.1 million, or $0.65 per share. Stockholders' equity was $37.4 million, or $1.20 per share. And the company continues to have no outstanding debt. We remain greatly confident in our ability to maintain a strong financial position to fund our short and long-term growth initiatives for FUEL CHEM, APC, and DGI. Before I turn the call back over to Vince, I'd like to take a moment to express on behalf of myself, both as an employee and a shareholder, and on behalf of the company, what an honor and privilege it has been to work for and with Vince. Vince's dedication to this company, its employees, its operation, and its long-term success has been extraordinary. While much of this work has taken place behind the scenes and may not always been visible to others, those of us who have had the opportunity to work alongside him have experienced the leadership that he has brought to this organization every day. His contributions have had a lasting impact on this company and are deeply appreciated by me and my colleagues. As Vince begins this new chapter, we wish him continued success. At the same time, we are excited about the future of the company and the opportunity to build upon the strong foundation he has spent so many years creating and nurturing. His legacy will continue to shape our success for years to come. Thank you, Vince, for your leadership, your dedication, and everything you have done for Fuel Tech and its people. The pleasure truly has been ours. Vincent Arnone: Ellen, thank you very much for the very kind words. And, operator, let's go ahead and open the call for questions. Operator: [Operator Instructions] Our first question is from Sameer Joshi with H.C. Wainwright. Please go ahead. Sameer Joshi: Sad to see you leave, but you have done great for the company for the last so many years. So it's been great covering the company while you were at the helm. Vincent Arnone: Thank you. A pleasure working with you as well over the years, Sameer. It's been a pleasure. Sameer Joshi: So just in terms of the opportunity that you have highlighted last call and this call and the other call. Sorry, I'm hearing an echo. In 2027, should we expect this to become a significant source of revenues or should we expect this to be like a '28 or '29 upside? Vincent Arnone: I think relative to the data center opportunity, Ramesh (sic) [ Sameer ], everything depends on timing of contract award at the end of the day, right? I made reference to 1 opportunity that we are indeed following very closely right now. The delivery timeframes for this opportunity are early to mid-2027 delivery timeframes are what we are talking about right now. So there is the opportunity for some revenues to come into the 2027 timeframe, but it fully depends on the timing of when the contract comes into fruition and then the expected delivery timeframes for having those turbines and then our related pollution control systems at site. So I'd say as we sit here today, there is a possibility for material revenues in 2027, pending contract award, of course. Sameer Joshi: Yes, you did mention the 4Q '27 possibility of that -- some revenues from this. On the DGI front, it seems like that the fisheries' demo went very well and they might be looking at a proposal or waiting for a proposal from you guys. Do we know what the size of that award could look like and what would be the timeline of implementation and revenue recognition on that if it comes through? Vincent Arnone: Understood. So, for a full system for that particular hatchery, I'll give you a range because it will depend on what level of equipment configuration that the client ultimately wants. But the sale of the DGI system could range anywhere from $500,000 to as much as $1 million, depending on the configuration, the level of redundancy that we would have with that system as well. So that's the range we're talking about. And the revenue profile, if we were actually awarded a contract for that system before the end of the year, all of that revenue would be recognized in 2027. It would be probably a 5- to 6-month project build, if you will, for that equipment build-out. Sameer Joshi: Understood. And then this could act as a demo or demonstration of your capacity for other similar applications as well, I guess. Vincent Arnone: It sure would. It would be an outstanding reference if this was able to move forward. Sameer Joshi: And then on the FUEL CHEM side, I know you mentioned 1 additional potential customer is on the horizon. Is there a concerted effort to increase this customer base in 2027? How should we look at revenues from FUEL CHEM in 2027 and beyond? Operator: Please stand by. Ladies and gentlemen, we thank you for your patience. Gentlemen, you may resume your event. Vincent Arnone: This is Vince Arnone back online. Sameer, are you there? Sameer Joshi: Yes, I can hear you. Yes, the question was about FUEL CHEM's outlook for 2027. Are there additional customers or installations that you may be looking for beyond the one that you're working on? Vincent Arnone: Yes, so as I had noted as part of my comments, first course of action is to convert the client that we'll be restarting the demo on in the fourth quarter of this year. We're looking to convert that to a commercial account as we move into 2027. So as I mentioned, if that does convert and does run full-time throughout the year, that's about a $2.5 million to $3 million incremental revenue contribution for 2027. And then I mentioned that there's at least 1 other coal-fired account that we're hoping to get a demonstration opportunity on later in this year. But right now I would say it's premature to look to account for anything regarding that opportunity in 2027. Sameer Joshi: And then just last one, given that there is going to be change at the CEO position, is there a mandate that has been given to Ramesh? Especially because you have a strong balance sheet and there could be acquisitions that could be had with Ramesh's experience in integrating those in his past experience. Vincent Arnone: Right. So I would say as we sit here today, Sameer, that there is no specific mandate. But I will tell you that Ramesh, along with the Board's support, will be looking at a variety of different opportunities to see if we can enhance our top line. That could include some level of M&A, if and when it makes sense for Fuel Tech. If we find an appropriate organization that we think would be accretive incrementally for us to take a look at for the company. I think that'll be part of his overall scope as he evaluates how we move Fuel Tech to the next level. Operator: We have reached the end of the question and answer session. I would like to turn the floor back over to Vince Arnone for closing comments. Vincent Arnone: Thank you, operator. I want to thank everyone for joining the call today. It truly has been my privilege to speak with everyone on these calls over the many years both as CEO and previously as CFO. My goal has always been to provide a transparent and factual depiction of our company, its operations, and its opportunities, and I hope I have conveyed the messaging well over the years. Lastly, I'd be remiss if I didn't provide a quick thank you to a few special individuals prior to signing off, as I would not have been able to provide the stewardship for Fuel Tech without the support of these individuals. To Sharon, my partner of 18 years, and to her children, Isabel and Grant, thanks for your ongoing care and support. I love you guys. I look forward to spending more time with you in the future. And I also want to thank my brother, Bobby, who has always been there for me. With that, thanks, everyone, and I truly wish everyone my best. Operator: This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation. 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Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Achieved 17% consolidated revenue growth driven by double-digit gains in both APC and FUEL CHEM segments, reflecting increased operational dispatch and project execution. Reported the largest quarter-end APC backlog since 2018 at $14.3 million, anchored by a major municipal utility contract for natural gas-fired turbine integration. Identified a sales pipeline for data center projects with an estimated value of $75 million to $100 million per project., where Fuel Tech serves as a subcontractor providing SCR technology for on-site power generation. Noted that data center market growth is currently constrained by power availability, permitting delays, and supply chain shortages for electrical equipment. Observed a shift in data center development toward aeroderivative turbines and reciprocating engines as lead times for large gas turbines now exceed five years. Maintained a strong debt-free balance sheet with approximately $30 million in cash and investments to fund commercialization efforts for the DGI business unit. Announced a leadership transition with Ramesh Nuggihalli set to succeed long-time CEO Vincent Arnone to lead the next chapter of operational improvement and growth. Expects 2026 total revenues to exceed 2025 levels, though the majority of revenue from the new large APC contract is slated for recognition in 2027. Anticipates potential conversion of a data center inquiry into a commercial award by the end of Q3 2026, possibly involving a capacity reservation and long lead time procurement agreement. Projects a potential $2.5 million to $3 million annualized revenue contribution from a FUEL CHEM customer demonstration scheduled to restart in mid-Q4 2026. Targets the first commercial DGI contract following successful trials at a fish hatchery and a municipal wastewater facility, with a proposal currently in development. Monitors regulatory shifts, including new EPA performance standards for gas turbines, which management believes will not negatively impact demand for pollution control solutions. Acknowledged a temporary halt in a FUEL CHEM demonstration due to plant operational issues unrelated to Fuel Tech's technology performance. Identified Mexico as a rekindled opportunity for chemical technology as the government emphasizes emissions control for heavy fuel oil power generation. Flagged that while federal rollbacks are being pursued, they do not loosen NOx requirements, potentially extending the life of units requiring retrofit solutions. Noted that segment gross margins decreased due to project mix, contract timing, and specific costs associated with demonstration programs and labor. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management indicated that while some revenue could appear in 2027, it depends entirely on the timing of contract awards and the delivery schedules of turbine OEMs. One specific opportunity being tracked closely has delivery timeframes targeted for early to mid-2027. A full DGI system for a hatchery application is estimated to range between $500,000 and $1 million depending on the required redundancy and configuration. If awarded by year-end, revenue would likely be recognized in 2027 following a 5- to 6-month equipment build-out. There is no specific initial mandate, but the new CEO will evaluate M&A opportunities to enhance the top line and move the company to the next level. The Board supports exploring accretive acquisitions that align with Fuel Tech's core environmental and power technologies.

This article first appeared on GuruFocus. Consolidated Revenue: $6.5 million, up 17% from $5.6 million in the prior year period. Fuel Chem Revenue: $3.7 million, up 21% from $3.1 million, driven by increased operational dispatch at legacy accounts. APC Segment Revenue: $2.8 million, up 11% from $2.5 million, related to timing of project execution. Consolidated Gross Margin: 41% of revenues, down from 46% in the prior year period. Fuel Chem Segment Margin: 45%, down from 47% due to demonstration costs, increased freight, and labor costs. APC Segment Margin: 36%, down from 44% due to project mix, contract timing, and execution costs. APC Backlog: $14.3 million at June 30, 2026, up from $7 million at December 31, 2025; approximately $10.5 million expected to be recognized in the next 12 months. SG&A Expenses: $3.6 million, up from $3.3 million; as a percentage of revenue, declined to 55% from 60%. R&D Expenses: $646,000, up from $490,000, reflecting investment in DGI systems. Operating Loss: $1.6 million, compared to a loss of $1.3 million in the prior year period. Net Loss: $1.2 million or $0.04 per diluted share, compared to a net loss of $689,000 or $0.02 per diluted share. Adjusted EBITDA Loss: $1.2 million, compared to an adjusted EBITDA loss of $948,000 in the prior year period. Cash and Investments: $29.6 million, comprising cash and cash equivalents of $7.6 million and short and long-term investments of $22 million; no debt. Cash Per Share: $1.05, based on approximately 31.2 million shares outstanding. Working Capital: $20.1 million or $0.65 per share. Stockholders' Equity: $37.4 million or $1.20 per share. Warning! GuruFocus has detected 4 Warning Signs with FTEK. Is FTEK fairly valued? Test your thesis with our free DCF calculator. Release Date: August 05, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Consolidated revenues rose 17% to $6.5 million, with both APC and Fuel Chem segments delivering double-digit growth of 11% and 21%, respectively. APC backlog reached $14.3 million at June 30, 2026, the largest quarter-end backlog since 2018, and has since grown to approximately $17 million with new awards. The company maintains a strong financial position with $29.6 million in cash and investments and no debt, providing ample funding for growth initiatives. Fuel Chem segment is benefiting from high dispatch, with a potential commercial conversion of a demonstration program that could add $2.5 million to $3 million in annualized revenue in 2027. DGI technology is progressing toward commercialization, with a successful hatchery demo leading to a proposal for a full system and a wastewater trial generating rental revenue and reducing odor complaints. The company is optimistic about 2026, expecting revenues to exceed 2025 levels, with a strong pipeline of data center opportunities valued at $75 million to $100 million. Consolidated gross margin declined to 41% from 46% in the prior year, due to lower margins in both APC and Fuel Chem segments. APC segment gross margin decreased to 36% from 44%, reflecting project mix, contract timing, and execution costs. Net loss widened to $1.2 million from $689,000 in the prior year period, with adjusted EBITDA loss also increasing. A Fuel Chem demonstration program was halted due to a customer operational issue, delaying potential revenue until a mid-Q4 restart. The timing of data center contract awards remains uncertain, with one opportunity delayed and another not developing, potentially pushing material revenues to 2027 or later. CEO Vince Arnone is retiring, which could introduce leadership transition risks despite the appointment of a successor. Q: Regarding the data center opportunity, should we expect this to become a significant source of revenues in 2027, or should we expect this to be a 2028 or 2029 upside? A: Vince Arnone (CEO) stated that everything depends on the timing of the contract award. He noted that for one specific opportunity they are following closely, the delivery time frames are early to mid-2027, so there is a possibility for material revenues in 2027, pending contract award. Q: On the DGI front, the fisheries demo went very well. What could the size of that award look like, and what would be the timeline of implementation and revenue recognition? A: Vince Arnone (CEO) explained that a full DGI system for that hatchery could range from $500,000 to as much as $1 million, depending on the configuration and level of redundancy. If awarded before the end of the year, all revenue would be recognized in 2027, with a five to six month project build for the equipment. Q: On the FuelChem side, is there a concerted effort to increase the customer base in 2027? How should we look at revenues from FuelChem in 2027 and beyond? A: Vince Arnone (CEO) stated that the first course of action is to convert the client restarting the demo in Q4 2026 to a commercial account in 2027. If converted and running full-time, this could contribute approximately $2.5 million to $3 million in incremental revenue for 2027. He also mentioned at least one other coal-fired account opportunity for a demonstration later this year, but it is premature to account for that in 2027. Q: Given the change at the CEO position, is there a mandate given to Ramesh, especially regarding acquisitions, given his past experience with integrating them? A: Vince Arnone (CEO) said there is no specific mandate, but Ramesh, with board support, will be looking at a variety of opportunities to enhance top-line growth. This could include M&A if and when it makes sense for FuelTech, as it will be part of his overall scope to move the company to the next level. Q: Can you provide more color on the $2.6 million in new APC contracts announced last week and the current backlog status? A: Vince Arnone (CEO) noted that the new contracts address the needs of two industrial customersone new customer in the gas infrastructure market and one long-term recurring customerboth requiring SCR technology for emissions reduction. Inclusive of these awards, the effective backlog as of today is approximately $17 million. Q: Regarding the data center market, what are the main constraints and how is FuelTech positioned to participate? A: Vince Arnone (CEO) highlighted four major constraints: power availability, permitting and zoning delays, local community opposition, and supply chain shortages. He noted that FuelTech's sales pipeline for data center opportunities remains strong at approximately $75 million to $100 million for projects integrating SCR technology with power generation sources, with project sizes ranging from a few systems up to 30-40 units per project at $1 million to $4 million per unit. Q: What is the status of the FuelChem demonstration program that was temporarily halted, and what is the potential impact? A: Vince Arnone (CEO) confirmed the customer is planning to restart the program in mid-Q4 2026, with a modest impact expected on fourth quarter results. If converted to a commercial account, the program could contribute approximately $2.5 million to $3 million in revenue on an annualized basis in 2027 with historic FuelChem gross margins. Q: Can you provide details on the new EPA NSPS regulations for gas turbines and their potential impact on FuelTech's business? A: Vince Arnone (CEO) explained that the new rules create a category for temporary power turbines below 85 MW requiring 25 ppm NOx, turbines greater than 5 MW with high operating capacity needing 15 ppm NOx (likely requiring SCR), and turbines greater than 85 MW needing 5 ppm NOx (requiring SCR in almost all cases). He noted that based on discussions with potential customers, there is no significant negative impact on decision-making regarding pollution controls, and state-specific permitting requirements can vary. Q: What is the status of the Mexico opportunity for FuelChem, and how is it developing? A: Vince Arnone (CEO) stated that conversations with partners in Mexico have recently been rekindled. The opportunity is tied to the Mexican government's emphasis on emissions control related to heavy fuel oil use for power generation. They are hopeful that working together, they can expand the provision of chemical technology in that country. Q: Regarding the DGI trial at the Southeast US municipal wastewater facility, what are the current results and next steps? A: Vince Arnone (CEO) reported that the trial is on an extended month-to-month rental, expected to generate approximately $100,000 in rental revenue in 2026. The client reported dramatically reduced odor-related complaints. The client is upgrading their primary aeration system, which will be complete later this year, after which they will evaluate the need for the supplemental aeration DGI has been providing. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

WARRENVILLE, Ill., Aug. 04, 2026 (GLOBE NEWSWIRE) -- Fuel Tech, Inc. (NASDAQ: FTEK), a technology company using advanced engineering processes to provide emissions control systems and water treatment technologies in utility and industrial applications, today reported financial results for the second quarter ended June 30, 2026 (“Q2 2026”). “Revenues for Q2 2026 rose 17% and reflected strong performance from our FUEL CHEM® and Air Pollution Control (“APC”) business segments,” said Vincent J. Arnone, President and CEO. “We are pleased with our performance at the midpoint of the year and remain optimistic about the outlook for each of our business segments for full year 2026. We are preparing for what has historically been a strong third quarter for FUEL CHEM and continue to expect that segment revenues will approximate last year’s results. For APC, including our recently announced contract awards of $3 million, our effective backlog is approximately $17 million, which is more than double the backlog at the end of 2025. In addition, we have commenced engineering work on our recently announced large contract at a publicly-owned Midwest utility. Our business development activities across FUEL CHEM, APC and our DGI® Dissolved Gas Infusion water treatment division are encouraging. As of June 30, 2026, our balance sheet included cash, cash equivalents, and investments of approximately $30 million and no long-term debt.” Mr. Arnone concluded, “As announced today, Ramesh Nuggihalli will be succeeding me as President and CEO of Fuel Tech effective August 10, 2026. In getting to know Ramesh during this process, I am confident that his background, temperament, and accomplishments make him exceptionally well positioned to lead Fuel Tech into its next chapter of growth and development. Serving Fuel Tech has been one of the greatest honors of my career, and I am proud of what we have achieved. I look forward to supporting Ramesh and the entire Fuel Tech organization as a member of the Board of Directors.” Business Segment PerformanceAll comparisons are to the second quarter ended June 30, 2025 unless otherwise stated. Revenues generated by the APC segment rose by 11% to $2.8 million in Q2 2026, primarily attributable to the timing of project execution on existing contracts and increased consolidated    segment backlog resulting from new project awards. Segment gross margin declined to 36% compared to 44%, due to product and project mix. Consolidated APC segment backlog at June 30, 2026 was $14.3 million compared to $7.0 million at December 31, 2025. Backlog at June 30, 2026 included the recently awarded APC contracts valued at $10 million associated primarily with a utility grid enhancement project in the Midwest. FUEL CHEM segment revenue rose 21% to $3.7 million from $3.1 million, primarily due to increased operational dispatch at legacy accounts. Segment gross margin declined to 45% from 47%, the result of demonstration costs, increased freight costs and additional internal labor costs for unit maintenance. Second Quarter 2026 (“Q2 2026”) Consolidated Results OverviewAll comparisons are to the second quarter ended June 30, 2025 unless otherwise stated. Consolidated revenues for Q2 2026 rose 17% to $6.5 million from $5.6 million, driven by increases in both APC and FUEL CHEM segment revenues. Consolidated gross margin for Q2 2026 declined to 41% of revenues from 46% of revenues, driven by declines in both APC and FUEL CHEM segment gross margins. SG&A expenses for Q2 2026 were $3.6 million, or 55.4% of revenues, compared to $3.3 million, or 60.2% of revenues, reflecting higher revenues compared to the prior year period. Interest income for Q2 2026 was $266,000 compared to $537,000. Income generated is primarily related to interest received on the held-to-maturity debt securities and money market funds. The decrease is related primarily to a one-time, $257,000 collection of the Employee Retention Credit (“ERC”) benefit under the CARES Act in last year’s second quarter. Net loss in Q2 2026 was $(1.2) million, or $(0.04) per share, compared to net loss of $(0.7) million, or $(0.02) per share. Adjusted EBITDA loss was $(1.2) million in Q2 2026 compared to an Adjusted EBITDA loss of $(0.9) million. Financial Condition As of June 30, 2026, cash and cash equivalents were $7.6 million, short-term investments were $12.0 million, and long-term investments totaled $10.0 million. Stockholders’ equity as of June 30, 2026 was $37.4 million, or $1.20 per share, and the Company had no debt. Conference Call Management will host a conference call on Wednesday, August 5, 2026 at 10:00 am ET / 9:00 am CT to discuss the results and business activities. Interested parties may participate in the call by dialing: (877) 423-9820 (Domestic) or (201) 493-6749 (International) The conference call will also be accessible via the Upcoming Events section of the Company’s web site at www.ftek.com. Following management’s opening remarks, there will be a question-and-answer session. About Fuel Tech Fuel Tech develops and commercializes state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services. These technologies enable customers to operate in a cost-effective and environmentally sustainable manner. Fuel Tech is a leader in nitrogen oxide (NOx) reduction and particulate control technologies and its solutions have been installed on over 2,100 utility, industrial and municipal units worldwide. The Company’s chemical technologies improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion and opacity. This includes Fuel Tech’s advanced TIFI® Targeted In-Furnace Injection™ technology which offers an innovative solution to fireside treatment on boilers using coal, oil or biomass.   Water treatment technologies include DGI® Dissolved Gas Infusion Systems which utilize a patented saturator and a patent-pending channel injector to deliver supersaturated oxygen solutions and other gas-water combinations to target process applications or environmental issues. This infusion process has a variety of applications in the water and wastewater industries, including remediation, aeration, biological treatment and wastewater odor management. Many of Fuel Tech’s products and services rely heavily on the Company’s exceptional Computational Fluid Dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software. For more information, visit Fuel Tech’s web site at ftek.com. NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains “forward-looking statements” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech’s current expectations regarding future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Fuel Tech has tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “plan,” “expect,” “estimate,” “intend,” “will,” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Fuel Tech’s Annual Report on Form 10-K in Item 1A under the caption “Risk Factors,” and subsequent filings under the Securities Exchange Act of 1934, as amended, which could cause Fuel Tech’s actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in Fuel Tech’s filings with the Securities and Exchange Commission. See notes to condensed consolidated financial statements. See notes to condensed consolidated financial statements. See notes to condensed consolidated financial statements. See notes to condensed consolidated financial statements. Adjusted EBITDA To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles in the United States (GAAP), the Company has provided an Adjusted EBITDA disclosure as a measure of financial performance. Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation expense, amortization expense, and stock compensation expense. The Company's reference to these non-GAAP measures should be considered in addition to results prepared in accordance with GAAP standards, but are not a substitute for, or superior to, GAAP results. Adjusted EBITDA is provided to enhance investors' overall understanding of the Company's current financial performance and ability to generate cash flow, which we believe is a meaningful measure for our investor and analyst communities. In many cases non-GAAP financial measures are utilized by these individuals to evaluate Company performance and ultimately determine a reasonable valuation for our common stock. A reconciliation of Adjusted EBITDA to the nearest GAAP measure of net income (loss) has been included in the above financial table.

WARRENVILLE, Ill., July 21, 2026 (GLOBE NEWSWIRE) -- Fuel Tech, Inc. (NASDAQ: FTEK), a technology company using advanced engineering processes to provide emissions control systems and water treatment technologies in utility and industrial applications, today announced that it will issue its financial results for the second quarter ended June 30, 2026 on Tuesday, August 4, 2026 after the close of the stock market. Management will host a conference call on Wednesday, August 5, 2026 at 10:00 am ET / 9:00 am CT to discuss the results and business activities. Interested parties may participate in the call by dialing: (877) 423-9820 (Domestic) or (201) 493-6749 (International) The conference call will also be accessible via the Upcoming Events section of the Company’s web site at www.ftek.com. Following management’s opening remarks, there will be a question-and-answer session. Questions may be asked during the live call, or alternatively, you may e-mail questions in advance to [email protected]. For those who cannot listen to the live broadcast, an online replay will be available at www.ftek.com. About Fuel Tech Fuel Tech develops and commercializes state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services. These technologies enable customers to operate in a cost-effective and environmentally sustainable manner. Fuel Tech is a leader in nitrogen oxide (NOx) reduction and particulate control technologies and its solutions have been installed on over 2,100 utility, industrial and municipal units worldwide. The Company’s chemical technologies improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion and opacity. This includes Fuel Tech’s advanced TIFI® Targeted In-Furnace Injection™ technology which offers an innovative solution to fireside treatment on boilers using coal, oil or biomass. Water treatment technologies include DGI® Dissolved Gas Infusion Systems which utilize a patented saturator and a patent-pending channel injector to deliver supersaturated oxygen solutions and other gas-water combinations to target process applications or environmental issues. This infusion process has a variety of applications in the water and wastewater industries, including remediation, aeration, biological treatment and wastewater odor management. Many of Fuel Tech’s products and services rely heavily on the Company’s exceptional Computational Fluid Dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software. For more information, visit Fuel Tech’s web site at ftek.com. NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains “forward-looking statements” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech’s current expectations regarding future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Fuel Tech has tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “plan,” “expect,” “estimate,” “intend,” “will,” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Fuel Tech’s Annual Report on Form 10-K in Item 1A under the caption “Risk Factors,” and subsequent filings under the Securities Exchange Act of 1934, as amended, which could cause Fuel Tech’s actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in Fuel Tech’s filings with the Securities and Exchange Commission.

Image source: The Motley Fool. Wednesday, May 6, 2026 at 10 a.m. ET Chairman, President, and Chief Executive Officer — Vincent J. Arnone Chief Financial Officer — Ellen Albrecht Need a quote from a Motley Fool analyst? Email [email protected] Vince Arnone, Chairman, President and Chief Executive Officer; and Ellen Albrecht, the company's Chief Financial Officer. After prepared remarks, we will open the call for questions from our analysts and investors. Before turning things over to Vince, I'd like to remind everyone that matters discussed on this call, except for historical information, are forward-looking statements as defined in Section 21E of the Securities Exchange Act of 1934 as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech's current expectations regarding future growth, results of operations, cash flows, performance and business prospects and opportunities as well as assumptions made by and information currently available to our company's management. Fuel Tech has tried to identify forward-looking statements by using words such as anticipate, believe, plan, expect, estimate, intend, will and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties and other factors, including, but not limited to, those discussed in Fuel Tech's annual report on Form 10-K in Item 1A under the caption of Risk Factors and subsequent filings under the Securities Exchange Act of 1934 as amended, which could cause Fuel Tech's actual growth, results of operations, financial condition, cash flows, performance, business prospects and opportunities to differ materially from those expressed in or implied by these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any forward-looking statements contained herein to reflect future events, developments, circumstances or for any other reasons. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in the company's filings with the SEC. With that said, I'd now like to turn the call over to Vince Arnone. Vince, please go ahead. Vincent Arnone: Thank you, Devin. Good morning, and I'd like to thank everyone for joining us on the call today. Our first quarter results, although strong, fell slightly short of last year's Q1 results with improved performance in our Air Pollution Control business segment being offset by a decline in revenues for our FUEL CHEM business segment. We continue to validate the efficacy and clients' return on investment for our Dissolved Gas Infusion demonstrations, and we maintained a strong financial position with cash, cash equivalents and investments of nearly $31 million at quarter end and no long-term debt. Most importantly, our outlook for the year has changed significantly and for the better. The expanded opportunity landscape that we have been tracking for our APC business segment resulted in the largest set of awards in terms of contract value that we have received in recent history. Last week, we announced multiple Air Pollution Control contracts valued at approximately $10 million with utility and industrial customers. The new awards were anchored by a contract for the integration of our selective catalytic reduction pollution control technology with 2 new natural gas-fired turbines for a large publicl-owned Midwest Municipal Utility. The installation of these new GE Vernova turbines will increase the plant's output by approximately 100 megawatts. The expansion of the generating station is expected to become operational in 2029. We are scheduled to commence engineering work this quarter with equipment deliveries scheduled to begin in the fourth quarter of 2027. The utility is undertaking this expansion to meet the region's rapidly growing electricity demand. We believe that this project reflects the growing focus on municipalities and states working together to plan infrastructure upgrades in response to and in anticipation of population expansion and commercial and data center growth. A strong, reliable power grid is one of the largest factors in determining where data centers are developed and operators need abundant capacity, reliability and a path to fast interconnection as well as emissions control solutions that address compliance, reporting and air permitting requirements that reduce carbon footprints and meet sustainability goals. These contracts have more than doubled our pro forma APC backlog to approximately $17 million at this date. which is the largest backlog that we have had since 2018. With respect to the larger data center opportunity, our sales pipeline for these opportunities remain strong and approximate $75 million to $100 million for projects integrating our SCR technology with power generation sources. Please note that the value of the pollution control scope of supply represents a very small fraction of the estimated total AI infrastructure spend. I want to again emphasize that in all instances, we are a subcontractor to the data center integrator or to the turbine or engine OEM. Our role remains to support and education of our direct customer regarding the design and delivery of a pollution control system that can best benefit the application. Beyond that, our knowledge regarding funding, approval and timing is generally limited. As I noted on our year-end conference call in March, data center awards are likely to be the primary source of material near-term growth for our company. Our optimism remains high. As such, we have been and continue to devote substantial internal and external resources to position Fuel Tech with data center developers and turbine and engine providers to deliver NOx reduction technologies as part of a data center's power generation platform. At present, we are in various stages of participation and project opportunities for 8 to 10 different data center projects in conjunction with integrators and turbine and engine OEMs, including some of the largest companies in the industry. All of these inquiries are for pollution control systems, primarily SCR in support of the development of on-site power generation. The size of these projects ranges from as few as 2 to 5 units to as many as 30 to 40 NOx reduction units with pricing predominantly in the range of $1 million to $3 million per unit. Regarding timing, on our last call, I had mentioned that there were 2 opportunities that could come to fruition in the second quarter. One of them did not continue to develop and the timing of the second one has been delayed. That said, there is a possibility that one of our 8 to 10 inquiries can convert to a commercial award based on our conversations with the various parties involved before the end of Q2. However, the remainder of the inquiries will develop further as we move throughout the year. We believe that we are still very much in the [ writing ] to capture our share of these opportunities, and we remain optimistic about our prospects for 2026. As one last comment, I did want to note that we did not consider the large contract that we were awarded for the Midwest utility to be a data center-specific application as the 2 new units will be deployed in front of the meter as part of the municipality's generating infrastructure. However, this award is material and significant for Fuel Tech as the SCR pollution control system that we are providing is for a model of GE Vernova turbine that is commonly being deployed for data center-specific opportunities. This win lends credibility to our company as we move to capture a portion of the larger market opportunity. Regarding our near-term APC sales pipeline, exclusive of data center opportunities, we are currently tracking $8 million to $10 million in additional potential awards, of which we expect to close on at least $3 million to $5 million of these awards before the end of the current second quarter or early in the third. Included in this near-term pipeline are opportunities emanating from our recent acquisition of the technology portfolio of WAHLCO, Inc., a well-established environmental equipment and services company with several hundred project installations worldwide. The pace and scope of inquiries from WAHLCO customers remains encouraging. Now let's discuss our FUEL CHEM business segment. Following a strong 2025, our FUEL CHEM segment produced another solid quarter of revenue. Across the country, the operating lives of coal-fired units are being extended to meet rising energy demand with many facilities dispatched at levels not seen in several years. Our FUEL CHEM segment continues to benefit from this trend, particularly across our legacy units. On our last conference call, I noted that we received benefit in the fourth quarter of 2025 from a new U.S. customer that is currently operating with us under a 6-month commercially priced demonstration program that commenced in early November. As we have discussed previously, the annual revenue potential from this commercial opportunity should it convert from a demonstration is expected to be approximately $2.5 million to $3 million based on the customer running the program full time and with the revenue expected to generate historic FUEL CHEM gross margins. During the first quarter of this year, the demonstration experienced a temporary interruption driven by unrelated plant operations, which limited its contribution to revenue. As of today, the customer has not yet completed the demonstration program. However, they have noted a material reduction in downtime and maintenance costs largely attributed to decreased offline cleaning, which bodes well for a successful demonstration. These results continue to support a positive outlook for the demonstration, and we remain optimistic that this account will convert to a commercial program later in the year. On the regulatory front, we have seen that the current administration is currently pursuing both the rollback of specific regulations that had been put in place previously and the implementation of new regulations that are less restrictive than those currently in place. These proposed rollbacks do not loosen the nitrogen oxide emissions requirements for any sources and could potentially extend the life of some coal and natural gas-fired units that may not have to reduce their emissions profile. We will take the opportunity where applicable, to offer retrofits and maintenance solutions to accommodate the extension of useful life. Regarding the implementation of new rules, earlier this year, we reported that EPA had issued new source performance standards, also called NSPS for new gas turbines, which were published in the Federal Register on January 15 of this year. A new category of gas turbines was created called Temporary Power Turbines and is applicable to units below 85 megawatts and installed to run for 24 months or less. These units will be required to achieve NOx levels of 25 ppm, which may not require SCR for all turbines. Turbines greater than 5 megawatts with operating capacity will need to meet 15 ppm NOx, likely requiring SCR. And finally, turbines greater than 85 megawatts will need to get to 5 ppm NOx, which will require SCR in almost all cases. With this rule in place, Power generation developers will need to decide how best to proceed with Air Pollution Control solutions for their new sources of power generation. Based on the discussions that we have had with our potential customer base, we are not aware of this new regulation having a significant negative impact on decision-making regarding the implementation of pollution controls. It is important to note state-specific permitting requirements can vary from the new federal regulation. It is also important to note that outside of the NSPS requirements, the use of multiple small gas turbines working together could classify them as a major source for NOx emissions control. Major sources are governed by other regulations and are often required to meet more stringent NOx emissions, which would require SCR. DGI continued its extended technology demo at a Western U.S. fish hatchery, which is on track to end this quarter and has been delivering strong performance with optimized oxygen delivery, program cost savings and improved fish growth. A second trial at a Southeast U.S. wastewater facility is on schedule to end its extended 6-month rental phase in the third quarter. With this trial, the client reports that odor-related complaints in the area surrounding the plant have been dramatically reduced, and we are working with the customer to assist them in assessing their oxygen delivery needs. In both instances, we are discussing the post-demonstration next steps with the clients and remain hopeful that DGI will become a commercial solution for them. We are also currently in discussions with multiple other end markets of interest for DGI, including pulp and paper, food and beverage, chemical, petrochemical and horticulture. As I noted earlier, we are optimistic about our outlook for 2026, driven by an expanded project backlog and opportunity landscape at APC, anticipated strong results at FUEL CHEM and our first commercial DGI contract. Taking all of this into account, we expect that revenues for 2026 will exceed the level of 2025, with FUEL CHEM approximating 2025 revenues and APC exceeding 2025 performance. I want to emphasize that while our backlog has risen substantially, the majority of the revenue assigned to the new large APC contract award that I discussed earlier will be generated in 2027. Further, this 2026 APC outlook excludes the benefit of specific data center awards, which would be additive to this forecast. Before turning things over to Ellen, I want to thank the entire Fuel Tech team for their continued dedication in advancing our strategic objectives and our shareholders for their patience and support. We are very excited about what the future holds for our company. Now I'd like to turn the call over to Ellen for her comments on our financial results. Ellen, please go ahead. Ellen Albrecht: Thank you, Vince, and good morning, everyone. For the quarter, consolidated revenues declined to $6.1 million from $6.4 million in the prior year period. Higher revenues in our APC business segment were offset by a decline in revenue for the FUEL CHEM segment. Consolidated gross margin for the first quarter declined slightly to 43% of revenues from 46% in last year's first quarter as a result of segment concentration. APC segment revenue rose 23% to $1.6 million from $1.3 million, primarily related to timing of project execution and existing contracts and ancillary business activity. Higher segment revenues and product and project mix led to a nearly 600 basis point expansion in segment margin to 38.3%. FUEL CHEM revenue declined to $4.5 million from $5.1 million, primarily due to seasonal maintenance outages and dispatch-related decreases in operational demand. Segment margin declined to 45.3% from 49.9% in the first quarter of 2025, but is expected to return to historical averages as we move throughout the remainder of the year. Consolidated APC segment backlog on March 31, 2026, was $6.9 million, roughly flat compared to a backlog of $7 million at December 31, 2025. Backlog at March 31 included $3.6 million of domestically delivered project backlog and $3.3 million of foreign delivered project backlog. Approximately $6 million of the $6.9 million project backlog at March 31 is expected to be recognized in the next 12 months, barring no customer-driven delays. We were very pleased to secure the recent APC contracts referenced by Vince. These agreements represent approximately $10 million in new bookings, strengthening our backlog, enhancing revenue visibility and supporting both gross margin and cash flow as project milestones are achieved. While APC projects have traditionally spanned 8 to 24 months, we are observing increased forward planning from our clients, resulting in some projects with longer execution timelines. This will impact timing of revenue recognition. We will continue to actively manage these extended project durations to optimize strategic pricing and operational efficiency, while further reinforcing our backlog for future periods. SG&A expenses rose to $3.7 million in the first quarter compared to $3.3 million last year. As a percentage of revenue, SG&A expenses rose to 61% from 52% in the prior year period, reflecting higher total SG&A expenses and the effect of lower consolidated revenue. For 2026, we continue to expect SG&A expenses will range between $14 million and $15 million. Research and development expenses for the first quarter were stable at $524,000. Our R&D investments largely reflect our ongoing investment in water and wastewater treatment technologies, specifically our DGI systems. Our investment in DGI will continue throughout 2026 to support ongoing site demonstrations and other growth initiatives as we ramp up towards initial commercial sales later this year. Operating loss for the first quarter was $1.6 million compared to a loss of $952,000 in the prior year period. Net loss was $1.4 million or $0.04 per diluted share compared to a net loss of $739,000 or $0.02 per diluted share in the same prior year period. Adjusted EBITDA loss was $1.3 million in the first quarter compared to an adjusted EBITDA loss of $735,000 in the prior year period. Lastly, moving to the balance sheet. Our financial condition remains very strong. As of March 31, 2026, total cash and investments was $30.6 million, comprised of cash and cash equivalents of $9.1 million and short- and long-term investments of $21.5 million. Shares outstanding at the quarter were approximately 31.2 million equated to a cash per share of $0.98. Working capital was $22.2 million or $0.71 per share. Stockholders' equity was $38.6 million or $1.24 per share, and the company continues to have no outstanding debt. We remain very comfortable with our financial position and our ability to funding these awards while pursuing new contract opportunities across FUEL CHEM, APC and DGI. I'll now turn the call back over to Vince. Vincent Arnone: Ellen, thank you very much. Operator, let's please go ahead and open the line for questions. Operator: [Operator Instructions] And our first question comes from the line of Sameer Joshi with H.C. Wainwright. Sameer Joshi: The first question on the regulatory front. The retrofit opportunity for old plants that will be required to continue to work. Can you give us an idea of the opportunity for Fuel Tech and what kind of efforts or resources have you applied towards this effort? And when should we start seeing any like orders emanating from this effort? Vincent Arnone: Are you referring to anything related to the extension of coal-fired lives, Sameer? Sameer Joshi: Yes, yes. extension of the coal fire. Yes. Vincent Arnone: Understood. So those -- as I sit here right now, our largest landscape of opportunity is truly more so in the data center and other power generation build-out, right? Obviously, as a company, we have a long history of doing successful business with coal-fired utilities in this country. And so as those plants would look to extend their lives and where they indeed have the need to enhance their emissions control portfolios at that site, we're going to be there to assist them. As I sit here today, although I do believe there will be opportunities there, that's not something that I could necessarily readily quantify for you right now, just given the unknown circumstances there. Sameer Joshi: Understood. Okay. And does the applications for 85 megawatts or greater sizes of new source power, are you -- like same question sort of what are your efforts? Are you adding additional resources to identify specific locations where the installations might be bigger than 85 megawatts? And what pipeline should we expect on that front? Vincent Arnone: Yes. No specific resources added. These types of opportunities we'll call it -- they'll follow our normal supply chain interaction activity using our internal sales force and manufacturers' representative individuals that we have out in the marketplace here in the U.S. specifically. And so I don't anticipate adding anything specific there. But relative to timing and/or volume, those are the opportunities that we're following for power generation build-outs and data center build-outs as we sit here today. The larger contract that we just announced that is regarding the municipal public utility, that was actually a public tender that we were invited to bid on amongst quite a few other companies being invited to bid as well. So that came out to us directly from an organization that was looking to build out their internal generation capability planning for the future, and we became part of that bidding process. So no real change in how we're doing business Sameer. The only -- what I would say, primary difference is with the focus on the data center specific build-out, we have been engaging with a significant amount of, call it, newer parties or companies that as Fuel Tech, we just haven't engaged with previously because it's a different type of customer for us, generally speaking. But over this past year, we've been doing an excellent job at developing relationships with companies that are indeed looking to help with the build-out of data centers here in this country. And I think we're -- today, we're nicely positioned with some of the larger, more reputable parties that are looking to take part of this opportunity landscape. Sameer Joshi: And you did mention that this opportunity uses a GE Vernova turbine, which is the same or similar type that is used for these new data center kind of applications. Vincent Arnone: That is correct. I mean this new award is very important for us because of the scale of the award, because of the fact that we are going to be fixing our NOx reduction SCR solution onto one of the predominant power generating sources that are indeed being deployed today. Again, it's not like as Fuel Tech, we don't have credibility, we do. We've been in the business for almost 4 decades now, providing successful solutions for emissions reduction for both utility and industrial customers. But in today's marketplace, this contract just lends us what I would call more specific credibility to enable us to have a better chance at obtaining and winning opportunities for the data center build-out specifically. Sameer Joshi: Understood. And maybe just one last one again on FUEL CHEM. The outlook for the year is sort of similar levels flattish relative to 2025. Are there any potential new build-outs that could materialize from now -- between now and the end of the year that could add incremental revenues here? Vincent Arnone: So as part of my commentary, I did mention the one new customer that we're looking to go ahead and turn a demonstration into a commercial account, right? So that is the primary new accounts that we are indeed focused on as we sit here right now in 2026, okay? Our revenue outlook, we're saying is going to be approximately the same year-on-year, mainly because of the fact that there are so many unknowns that we deal with regarding some of the unscheduled outages that we do deal with on occasion with some of our installed base already that it's difficult to forecast exactly how the full year is going to pan out. If the new customer that we're looking to convert to a commercial system, if they convert sooner in the year rather than later in the year, that could provide a little bit of upside to us. But that -- those are just unknowns for us right now. It's a little bit more conservative for us to target an equivalent Chem tech revenue year-on-year, which, again, last year was an excellent year of performance for FUEL CHEM. If we can achieve that again this year, I'd be pleased with it. But I do want us to add that additional new account and have that convert to commercial. Operator: [Operator Instructions] And the next question will come from the line of William Bremer with Vanquish Capital Partners. William Bremer: So I'd like to first start off with FUEL CHEM. Given the harsh winter that we had that was broad-based, Midwest, et cetera, and the duration of it, I was expecting much stronger figures from the FUEL CHEM division. Vincent Arnone: Yes. The winter was mixed, Bill, from an overall temperature perspective in certain parts of the country. And again, we don't have the ability to be able to predict when our customers' units are going to be dispatched to run at certain points in time or when they actually have to come down for their scheduled planned outages or when they have unplanned outages. That's something that's out of our control. So we did have a mix of performance at our base clients in the first quarter of the year. But again, if we look back at Q1 over the past several years, with the exception of 2025's Q1, our Q1 of '26 was one of the better performing quarters that we've had for Q1. So hopefully, that, again, we'll pull a little bit more forward here for the rest of the year, and we'll have dispatch at all of our base load of accounts here for the rest of the year, but difficult for us to predict. William Bremer: Okay. Now on the air side, congratulations on this last order. It seems as though -- and based upon your articulation of how you achieved this close to $10 million contract, this was not from your sales team personnel, but in essence, hey, you were able to bid for it and the offset, hey, having the customer of GE Vernova and supporting their equipment is monumental, extremely positive for Fuel Tech. My question is, okay, at what point do you and the Bailey's, finally make some changes on your sales personnel? And I look at the figures, and I've been a long shareholder I have more shares than yourself and many of your team. I do not see any insider purchases other than yourself here and there. If the outlook is so strong, why are we not seeing some insider purchases, number one? Second question I have, I would welcome William Cummings to be on our next call. He's been there an exorbitant amount of time. Him and his sales team, I think, should be on the clock, either they start producing or we need to start making some changes. I mean your peers are exploding in the space. You have in September of 2018, everybody could look this up. You guys landed a $15.8 million order for backup systems for power generation for the data center market. That was in 2018. We were ahead of the curve back then. And now all of a sudden, we are trying to land something, trying, when the field has been exploding for years. Changes have to be made there. And we are all -- we all see the value in FUEL CHEM. That's why we're shareholders. We're just -- I'm just starting to wonder, is this a value trap or are we ever going to grow this company? Vincent Arnone: Anything further, Bill? William Bremer: Changes have to be made, Vince. Vincent Arnone: Yes, let me start by going through some of your questions, okay? Okay. First of all, regarding the contract that we just won. There are companies that will put their project opportunities out to bid on a regular basis. So the fact that this contract was a public bid, it's not unusual by any sense of the word. The public bid starts the sales process. It is just the beginning. So to make the comment that our sales team had nothing to do with it is completely off base. And that's just fact as we sit here today. That's fact. That starts the sales process. And from there, our team has been intimately involved from the end of 2025 when this first started up until final award and going back and forth and back and forth iteration after iteration, responding to questions, comments and any other inquiry that comes our way comes through our sales team. That's the way the process works. As part of that process, our sales team has to indeed build in the fact that Fuel Tech is indeed a credible supplier of these technologies. And from that perspective, that's all us. That's Fuel Tech and its sales team. That doesn't just happen, Bill. So I just want to correct the record on the statement because it's simply not a fair statement to make regarding how that award was won by the company. It's a team award. There are a lot of individuals involved in bringing a contract of that magnitude to Fuel Tech. We're proud of the effort, and we're looking forward to more of those coming our way, okay? Secondarily, and we've discussed this previously, insider purchasing is something that's governed by the individuals on the Board and within the company. We don't put pressure on our internal folks to be buying shares of the company. Do I know that there are some nonreportable Fuel Tech employees that have bought shares? I do. I am aware of that, but that's not something that we do indeed announce publicly. I can tell you that from the Board's perspective and from the leadership team and the employee team's perspective, we have every confidence in the world that Fuel Tech is indeed going to become a profitable company once again, okay? We've had some headwinds as a small public company over these past several years. And no doubts, our performance -- and again, I'm the first one to raise my hand and say that our performance needs to be better, and you and I have discussed that as well. I believe we're finally on the track towards making that shift. This last award is meaningful to us, particularly as we look at some of the larger scale opportunities that we're looking at and with the parties that we're dealing with. So there's a lot that's going on here, Bill. We just don't pick up and change personnel because we go through a slow period of time. We have some of the most well-respected individuals in the industry that represent Fuel Tech and its technologies. I'm very confident of that. Will changes be made within the leadership team here at Fuel Tech over time? Sure, they will and when they're warranted. So from that perspective, again, I appreciate your comments and questions. I always do. Thanks for being a shareholder of the company. And we're looking to go ahead and again, show that there is value added to Fuel Tech as we sit here today, and we should be trading much higher than where we are today, which isn't that much higher than cash value. William Bremer: That's correct. And I've read all of your executive management bios in depth, and they do have incredible backgrounds. The numbers, though, Vince, are the numbers. And for the last 10 years, where are the numbers? So you got a light of fire underneath them. The bellies have the light of fire in them or they need to be replaced because as a shareholder, I'm getting tired of waiting. Thank you. Operator: This concludes the question-and-answer session. And I'll turn the call back over to Vince Arnone for closing remarks. Vincent Arnone: Operator, thank you very much. I want to thank everyone for joining us on the call today. We are very much looking forward to our performance here for the remainder of 2026. The recent contract awards are milestones for us as a company, and I look forward to further expanding on those awards as we move throughout the year. So thanks, everyone, for taking the time today, and we look forward to talking with you again in the future. Thank you Operator: Thank you. This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation. Before you buy stock in Fuel Tech, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fuel Tech wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $476,034!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,274,109!* Now, it’s worth noting Stock Advisor’s total average return is 975% — a market-crushing outperformance compared to 206% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 7, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fuel Tech (FTEK) Q1 2026 Earnings Transcript was originally published by The Motley Fool

WARRENVILLE, Ill., May 05, 2026 (GLOBE NEWSWIRE) -- Fuel Tech, Inc. (NASDAQ: FTEK), a technology company using advanced engineering processes to provide emissions control systems and water treatment technologies in utility and industrial applications, today reported financial results for the first quarter ended March 31, 2026 (“Q1 2026”). “Our results for Q1 2026 reflected higher revenues for our Air Pollution Control (“APC”) business segment, another strong quarter from FUEL CHEM®, and continuing progress for our DGI® Dissolved Gas Infusion (“DGI”) division,” said Vincent J. Arnone, President and CEO. “At March 31, 2026, our balance sheet included cash and equivalents of $30.6 million and no long-term debt. “We recently announced a series of APC awards valued at approximately $10 million with utility and industrial customers, anchored by a contract that calls for the integration of our Selective Catalytic Reduction (“SCR”) pollution control technology with two new natural gas-fired turbines for a large, publicly-owned Midwest municipal utility. This project will enable the utility to better meet the region’s rapidly growing electricity demand driven by population growth and the necessity to support commercial activities related to manufacturing expansion and data center projects. Engineering work is expected to commence in the current second quarter.” Mr. Arnone concluded, “We remain optimistic about the outlook for each of our businesses for full year 2026. On a proforma basis, including these recent awards, our APC backlog is at its highest level since 2018. We remain actively engaged with our supply chain partners and engineering colleagues in the pursuit of additional APC award opportunities. We expect another solid year for our FUEL CHEM business segment. For our DGI division, the extended demonstration of our high-efficiency water treatment system at a fish hatchery in the western U.S. is progressing well and generating positive results. This demonstration will conclude in the second quarter of 2026.” Business Segment Performance All comparisons are to the first quarter ended March 31, 2025 unless otherwise stated. Revenues generated by the APC segment rose by 23% to $1.6 million in Q1 2026, driven primarily by project timing and ancillary business activity. Segment gross margin expanded to 38.3% compared to 32.6%, due largely to product and project mix. Consolidated APC segment backlog at March 31, 2026 was $6.9 million compared to $7.0 million at December 31, 2025. Backlog at March 31, 2026 did not include the recently awarded APC contracts valued at $10 million. FUEL CHEM segment revenue declined to $4.5 million from $5.1 million, primarily driven by seasonal maintenance outages and dispatch-related decreases in demand. Segment gross margin declined to 45.3% from 49.9%, the result of lower sales offset by a relatively flat expense profile. First Quarter 2026 (“Q1 2026”) Consolidated Results Overview All comparisons are to the first quarter ended March 31, 2025 unless otherwise stated. Consolidated revenues for Q1 2026 declined 5% to $6.1 million from $6.4 million, with higher APC revenue offset by lower FUEL CHEM revenues. Consolidated gross margin for Q1 2026 declined to 43.5% of revenues from 46.4% of revenues, with higher APC gross margin offset by a decline in FUEL CHEM gross margin. SG&A expenses for Q1 2026 were $3.7 million, or 61% of revenues, compared to $3.3 million, or 52% of revenues, reflecting higher employee-related expenses and increases in professional fees and administrative expenses. Interest income for Q1 2026 was $240,000 compared to $279,000. Income generated is primarily related to interest received on the held-to-maturity debt securities and money market funds. Net loss in Q1 2026 was $(1.4) million, or $(0.04) per share, compared to net loss of $(0.7) million, or $(0.02) per share. Adjusted EBITDA loss was $(1.3) million in Q1 2026 compared to an Adjusted EBITDA loss of $(0.7) million. Financial Condition At March 31, 2026, cash and cash equivalents were $9.1 million, short-term investments were $12.5 million, and long-term investments totaled $9.0 million. Stockholders’ equity at March 31, 2026 was $38.6 million, or $1.24 per share, and the Company had no debt. Conference Call Management will host a conference call on Wednesday, May 6, 2026 at 10:00 am ET / 9:00 am CT to discuss the results and business activities. Interested parties may participate in the call by dialing: (877) 423-9820 (Domestic) or (201) 493-6749 (International) The conference call will also be accessible via the Upcoming Events section of the Company’s web site at www.ftek.com. Following management’s opening remarks, there will be a question-and-answer session. About Fuel Tech Fuel Tech develops and commercializes state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services. These technologies enable customers to operate in a cost-effective and environmentally sustainable manner. Fuel Tech is a leader in nitrogen oxide (NOx) reduction and particulate control technologies and its solutions have been installed on over 1,300 utility, industrial and municipal units worldwide. The Company’s FUEL CHEM® technology improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion and opacity. Water treatment technologies include DGI® Dissolved Gas Infusion Systems which utilize a patented saturator and a patent-pending channel injector to deliver supersaturated oxygen solutions and other gas-water combinations to target process applications or environmental issues. This infusion process has a variety of applications in the water and wastewater industries, including remediation, aeration, biological treatment and wastewater odor management. Many of Fuel Tech’s products and services rely heavily on the Company’s exceptional Computational Fluid Dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software. For more information, visit Fuel Tech’s web site at www.ftek.com. NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains “forward-looking statements” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech’s current expectations regarding future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Fuel Tech has tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “plan,” “expect,” “estimate,” “intend,” “will,” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Fuel Tech’s Annual Report on Form 10-K in Item 1A under the caption “Risk Factors,” and subsequent filings under the Securities Exchange Act of 1934, as amended, which could cause Fuel Tech’s actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in Fuel Tech’s filings with the Securities and Exchange Commission. See notes to condensed consolidated financial statements. See notes to condensed consolidated financial statements. See notes to condensed consolidated financial statements. See notes to condensed consolidated financial statements. FUEL TECH, INC. Geographic Segment Financial Data (Unaudited) (in thousands) Information concerning our operations by geographic area is provided below. Revenues are attributed to countries based on the location of the end-user. Assets are those directly associated with operations of the geographic area. Adjusted EBITDA To supplement the Company's consolidated financial statements presented in accordance with generally accepted accounting principles in the United States (GAAP), the Company has provided an Adjusted EBITDA disclosure as a measure of financial performance. Adjusted EBITDA is defined as net income (loss) before interest expense, income tax expense (benefit), depreciation expense, amortization expense, and stock compensation expense. The Company's reference to these non-GAAP measures should be considered in addition to results prepared in accordance with GAAP standards, but are not a substitute for, or superior to, GAAP results. Adjusted EBITDA is provided to enhance investors' overall understanding of the Company's current financial performance and ability to generate cash flow, which we believe is a meaningful measure for our investor and analyst communities. In many cases non-GAAP financial measures are utilized by these individuals to evaluate Company performance and ultimately determine a reasonable valuation for our common stock. A reconciliation of Adjusted EBITDA to the nearest GAAP measure of net income (loss) has been included in the above financial table. CONTACT: Vince Arnone President and CEO (630) 845-4500 Devin Sullivan Managing Director The Equity Group Inc. [email protected]

Secured approximately $10 million in new Air Pollution Control (APC) contracts, more than doubling the pro forma backlog to $17 million, the highest level since 2018. The APC segment's growth is being driven by regional electricity demand and infrastructure upgrades required for population expansion and data center development. A significant new contract for a Midwest utility utilizes a GE Vernova turbine model common in data center applications, providing specific technical credibility for that high-growth market. FUEL CHEM performance remains stable as coal-fired units extend their operating lives to meet rising energy demand, though Q1 revenue was impacted by seasonal maintenance and dispatch-related decreases. Dissolved Gas Infusion (DGI) technology is transitioning toward commercialization with successful demonstrations in fish hatcheries and wastewater facilities showing cost savings and odor reduction. Management maintains a strong debt-free balance sheet with nearly $31 million in cash and investments to fund the execution of the expanded backlog and new growth initiatives. Full-year 2026 revenue is expected to exceed 2025 levels, with APC outperforming and FUEL CHEM remaining approximately flat compared to the prior year. The sales pipeline for data center-specific opportunities is estimated at $75 million to $100 million, focusing on Selective Catalytic Reduction (SCR) technology for on-site power generation. Management anticipates at least one of the 8 to 10 active data center inquiries could convert to a commercial award as early as the second quarter of 2026. The majority of revenue from the recently announced $10 million APC contract is scheduled for recognition in 2027, with engineering work beginning in Q2 2026. A 6-month FUEL CHEM demonstration program with a potential annual value of $2.5 million to $3.0 million is expected to convert to a commercial contract later in 2026. New EPA Source Performance Standards (NSPS) for gas turbines are expected to mandate SCR technology for units greater than 85 megawatts, supporting long-term APC demand. The acquisition of WAHLCO technology is generating a steady stream of inquiries from an established global customer base, contributing to the near-term sales pipeline. Project execution timelines are lengthening as clients engage in more forward planning, which will shift the timing of revenue recognition for large-scale awards. A temporary interruption in a key FUEL CHEM demonstration due to unrelated plant operations limited Q1 revenue contribution, though the client reported material maintenance cost reductions. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management noted that while coal plant life extensions provide opportunities for maintenance and retrofits, the primary growth focus remains on new data center and power generation build-outs. The company is positioned to assist existing coal utility customers as they enhance emissions portfolios, but the specific volume of this opportunity is currently difficult to quantify. The recent municipal utility award is viewed as a 'team award' that validates the company's ability to integrate with predominant turbine models used in the data center industry. Management defended the current sales team and strategy, emphasizing that they are now engaging with a new set of customers and integrators specific to AI infrastructure spend. The company is focused on converting one primary new account that has shown a material reduction in downtime and maintenance costs during its demonstration phase. Conservative full-year guidance for FUEL CHEM accounts for unknowns such as unscheduled outages and the exact timing of demonstration conversions. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

WARRENVILLE, Ill., April 23, 2026 (GLOBE NEWSWIRE) -- Fuel Tech, Inc. (NASDAQ: FTEK), a technology company using advanced engineering processes to provide emissions control systems and water treatment technologies in utility and industrial applications, today announced that it will issue its financial results for the first quarter ended March 31, 2026 on Tuesday, May 5, 2026 after the close of the stock market. Management will host a conference call on Wednesday, May 6, 2026 at 10:00 am ET / 9:00 am CT to discuss the results and business activities. Interested parties may participate in the call by dialing: (877) 423-9820 (Domestic) or (201) 493-6749 (International) The conference call will also be accessible via the Upcoming Events section of the Company’s web site at www.ftek.com. Following management’s opening remarks, there will be a question-and-answer session. Questions may be asked during the live call, or alternatively, you may e-mail questions in advance to [email protected]. For those who cannot listen to the live broadcast, an online replay will be available at www.ftek.com. About Fuel Tech Fuel Tech develops and commercializes state-of-the-art proprietary technologies for air pollution control, process optimization, water treatment, and advanced engineering services. These technologies enable customers to operate in a cost-effective and environmentally sustainable manner. Fuel Tech is a leader in nitrogen oxide (NOx) reduction and particulate control technologies and its solutions have been installed on over 1,300 utility, industrial and municipal units worldwide. The Company’s FUEL CHEM® technology improves the efficiency, reliability, fuel flexibility, boiler heat rate, and environmental status of combustion units by controlling slagging, fouling, corrosion and opacity. Water treatment technologies include DGI® Dissolved Gas Infusion Systems which utilize a patented saturator and a patent-pending channel injector to deliver supersaturated oxygen solutions and other gas-water combinations to target process applications or environmental issues. This infusion process has a variety of applications in the water and wastewater industries, including remediation, aeration, biological treatment and wastewater odor management. Many of Fuel Tech’s products and services rely heavily on the Company’s exceptional Computational Fluid Dynamics modeling capabilities, which are enhanced by internally developed, high-end visualization software. For more information, visit Fuel Tech’s web site at www.ftek.com. NOTE REGARDING FORWARD-LOOKING STATEMENTS This press release contains “forward-looking statements” as defined in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and reflect Fuel Tech’s current expectations regarding future growth, results of operations, cash flows, performance and business prospects, and opportunities, as well as assumptions made by, and information currently available to, our management. Fuel Tech has tried to identify forward-looking statements by using words such as “anticipate,” “believe,” “plan,” “expect,” “estimate,” “intend,” “will,” and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech and are subject to various risks, uncertainties, and other factors, including, but not limited to, those discussed in Fuel Tech’s Annual Report on Form 10-K in Item 1A under the caption “Risk Factors,” and subsequent filings under the Securities Exchange Act of 1934, as amended, which could cause Fuel Tech’s actual growth, results of operations, financial condition, cash flows, performance and business prospects and opportunities to differ materially from those expressed in, or implied by, these statements. Fuel Tech undertakes no obligation to update such factors or to publicly announce the results of any of the forward-looking statements contained herein to reflect future events, developments, or changed circumstances or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in Fuel Tech’s filings with the Securities and Exchange Commission. CONTACT: Fuel Tech Vince Arnone President and CEO (630) 845-4500 The Equity Group Devin Sullivan, Managing Director [email protected] Conor Rodriguez, Associate [email protected]

Image source: The Motley Fool. Wednesday, March 4, 2026 at 10 a.m. ET Chairman, President, and Chief Executive Officer — Vincent J. Arnone Chief Financial Officer — Ellen T. Albrecht Operator: Greetings and welcome to Fuel Tech, Inc.'s 2025 Fourth Quarter and Full Year Conference Call and Financial Results Conference Call and Webcast. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. Devin Sullivan, Managing Director at The Equity Group. Thank you. You may begin. Devin Sullivan: Thank you, Rob. Good morning, everyone, and thank you for joining us today. Yesterday, after the close, we issued a press release, a copy of which is available at the company's website, www.ftek.com. Our speakers for today will be Vincent J. Arnone, Chairman, President and Chief Executive Officer, and Ellen T. Albrecht, the company's Chief Financial Officer. After prepared remarks, we will open the call for questions from our analysts and investors. Before turning things over to Vince, I would like to remind everyone that matters discussed on this call, except for historical information, are forward-looking statements as in Section 21E of the Securities Exchange Act of 1934, as amended, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and reflect Fuel Tech, Inc.'s current expectations regarding future growth, results of operations, cash flows, performance, and business prospects and opportunities, as well as assumptions made by and information currently available to our company's management. Fuel Tech, Inc. has tried to identify forward-looking statements by using words such as anticipate, believe, plan, expect, estimate, intend, will, and similar expressions, but these words are not the exclusive means of identifying forward-looking statements. These statements are based on information currently available to Fuel Tech, Inc. and are subject to various risks, uncertainties, and factors including, but not limited to, those discussed in Fuel Tech, Inc.'s Annual Report on Form 10-K’s Item 1A under the caption of Risk Factors and subsequent filings under the 1934 Act, as amended, which could cause Fuel Tech, Inc.'s actual growth, results of operations, financial condition, cash flows, performance, and business prospects and opportunities to differ materially from those expressed in or implied by these statements. Fuel Tech, Inc. undertakes no obligation to update such factors or to publicly announce the results of any forward-looking statements contained herein to reflect future events, developments, or changed circumstances, or for any other reason. Investors are cautioned that all forward-looking statements involve risks and uncertainties, including those detailed in the company's filings with the SEC. With that said, I would now like to turn the call over to Vincent J. Arnone. Vince, please go ahead. Vincent J. Arnone: Thank you, Devin. Good morning, and I would like to thank everyone joining us on the call today. 2025 was a year of multiple achievements for Fuel Tech, Inc., marked by an expanded opportunity set in our Air Pollution Control business segment driven largely by anticipated growth in data center development and construction, a resurgence in revenue for our FUEL CHEM operations, revenues for the year exceeded our expectations and reached their highest levels since 2018, and tangible progress at our Dissolved Gas Infusion business. We maintained a strong financial position with cash, cash equivalents, and investments of nearly $32,000,000 at year end and no debt. Our FUEL CHEM segment ended an already strong year on a high note. Across the country, the useful life of coal-fired units is being extended to satisfy growing energy demand, and many of these units were dispatched at levels that have not been realized in several years. Our results for the FUEL CHEM segment benefited from this phenomenon, in particular for our legacy units. In addition, 2025 results were favorably impacted by the full year performance of a U.S. commercial unit that we added late in 2024 and from a new U.S. customer that is currently operating with us under a six-month commercially priced demonstration program that commenced in 2025. As we have discussed previously, the annual revenue potential from this commercial opportunity, should it convert from a demonstration, is expected to be approximately $2,500,000 to $3,000,000 based on the customer running the program full time, with the revenue expected to generate historic FUEL CHEM gross margins. I want to share a bit of additional color regarding our FUEL CHEM demonstration program. This customer was interested in our program as a means to improve boiler availability and reliability, and to reduce maintenance downtime for offline boiler cleaning, in particular during periods of high power generation demand. This customer utilizes a source of coal that is high in sodium and is prone to extensive slagging and fouling. To date, the customer has realized a material reduction in downtime and maintenance costs due to a reduction in offline cleaning, which bodes well for a successful demonstration. Revenues generated by our APC segment rose in the fourth quarter but declined annually reflecting customer-driven delays and project award timing. We secured $8,800,000 of APC awards during 2025 from new and existing customers in the U.S., Europe, and Southeast Asia. Our near-term sales pipeline of APC contracts, exclusive of data center opportunities, is between $3,000,000 and $5,000,000. While we had hoped to close on these opportunities by year end, discussions remain active and we expect to close before the end of the current second quarter. Even with these delays, we ended the year with a consolidated APC segment backlog of $7,000,000, up from $6,200,000 at the end of 2024. As we announced last quarter, we expanded our APC portfolio through a small strategic acquisition of complementary intellectual property and customer-related assets from Walco Inc., a well-established environmental equipment and services company with several hundred project installations worldwide. As we continue to integrate WALCO's operations, we have been encouraged by the pace of project inquiries from their client base and others, including a number of near-term needs. The value proposition for us in acquiring WALCO was in securing these high-value assets at a modest price, strengthening our technology portfolio, and attracting a broader base of potential customers. This proposition seems to be playing out thus far. With respect to the data center opportunity, these facilities will potentially require emissions control solutions to mitigate their environmental footprint, comply with federal, state, and local regulations, and align with corporate sustainability mandates. Our sales pipeline for these opportunities remains strong and approximates $75,000,000 to $100,000,000 per project integrating our SCR technology with power generation sources. Please note that the value of the pollution control scope of supply represents a very small fraction of the estimated total AI infrastructure spend. I want to provide a little more information about our data center opportunity. First, think that we have been clear that any material near-term growth for our company will likely derive from our success in addressing this opportunity. As such, we have been, and continue to, devote substantial internal and external resources to position Fuel Tech, Inc. with data center developers, and turbine and engine providers, to deliver NOx reduction technologies as part of a data center's power generation platform. One point that I want to highlight is that Fuel Tech, Inc. is a subcontractor in the data center ecosystem. In all instances, we are a subcontractor to the data center integrator or to the turbine or engine OEM. This relationship limits our knowledge of the development of the data center opportunity, its funding, its phase of approval, and its timing. Our role remains the support and education of our direct customer regarding the design and delivery of a pollution control system that can best fit the application. This does not dilute the opportunity landscape or temper our enthusiasm in any way, but it does make providing specific insights with respect to the timing of awards more challenging. This is what we can currently share about the opportunity. At present, we are in various stages of participation in project opportunities with more than ten different data center integrators and turbine and engine OEMs, including some of the largest companies in the industry. All of these inquiries are for pollution control systems, primarily SCR, in support of the development of on-site power generation. The size of these projects runs the gamut, as little as two to five units per project to as many as 30 to 40 NOx reduction units, with pricing predominantly in the range of $1,000,000 to $2,500,000 per unit. Regarding timing, the earliest we expect any of these inquiries to convert to a commercial award based on our conversations with the various parties involved is Q2 2026, as the schedule requirements for at least two of the projects would necessitate the receipt of an award by then. The remainder of the inquiries will develop further as we move throughout the year. To the best of our knowledge, with just one exception, none of the inquiries that we are currently involved with have been awarded. More specifically, we are still very much in the running to capture our share of these opportunities, and we remain optimistic about our prospects for 2026. On the regulatory front, we have seen that the current administration is currently pursuing both the rollback of specific regulations that had been put in place previously and the implementation of new regulations that are less restrictive than those currently in place. Regarding the rollback of regulations, EPA announced the rescission of rules related to the reduction of greenhouse gases. Regulation of these emissions started in 2009 with the EPA endangerment finding based on a 2007 Supreme Court ruling. EPA has also announced the repeal of the 2024 mercury and air toxic standards for coal-fired units. It is important to note that both of these proposed rollbacks do not loosen the nitrogen oxide emissions reduction requirements for any sources and could potentially extend the life of some coal- and natural gas-fired units that may not have to reduce their emissions profile. We will take the opportunity, where applicable, to offer retrofit and maintenance solutions to accommodate the extensions of useful life. Now, regarding the implementation of new rules, earlier this year, EPA issued new source performance standards, also known as NSPS, for new gas turbines, which were published in the Federal Register on January 15. The NSPS was required per EPA consent decree with Sierra Club and the Environmental Defense Fund and were in response to the proposed rules that were issued in November 2024. A new category of gas turbines was created called temporary power turbines and is applicable to units below 85 megawatts installed to run for 24 months or less. These units will be required to achieve NOx levels of 25 ppm, which in some cases may not require SCR for all turbines. Turbines greater than 5 megawatts with high operating capacity will need to meet 15 ppm of NOx, which will likely require SCR, and turbines greater than 85 megawatts will need to get to 5 ppm NOx, which will require SCR in almost all cases. So what is the impact of the new regulation? First of all, several organizations including the Clean Air Task Force, Sierra Club, and the Environmental Defense Fund have filed a petition for reconsideration with the EPA, and the hard deadline to file a formal lawsuit challenging these amendments in the U.S. Court of Appeals for the D.C. Circuit is March 16. It is certain that lawsuits will be filed. And second, with this rule in place, power generation developers will need to decide how best to proceed with their pollution control solutions for their new sources of power generation. Based on the discussions that we have had with our potential client base, we are not aware of this new regulation having a significant negative impact on decision-making regarding the implementation of pollution controls. It is important to note that state-specific permitting requirements can vary from the new federal regulation. And it is also important to note that, outside of the NSPS requirements, the use of multiple gas turbines working together classify them as a major source for NOx. Major sources are governed by other regulations and are often required to meet more stringent NOx emissions which would require SCR. We continue to pursue additional new awards driven by industrial expansion globally and by state-specific regulatory requirements in the U.S. We are continuing to monitor the progress of the EPA's rule for large municipal waste combustion units. This rule reduces the nitrogen oxide emissions requirements for up to 150 large MWC units across the country. Fuel Tech, Inc. has had a long history of assisting this industry in meeting its compliance requirements, and we have had discussions with customers in this segment to support their compliance planning. The final rule is currently in the White House Office of Management and Budget and is expected to take effect before March, with NOx emission levels likely requiring advanced SNCR technology to meet compliance deadlines three years from the date of issue. Moving over to DGI. We are continuing the extended demonstration of the technology at a fish hatchery in the Western U.S., which remains on track to conclude in the second quarter of this year. The system is performing well, meeting customer expectations for the precise delivery of concentrated dissolved oxygen and generating positive results in terms of reduced operational costs and improved fish growth. A second trial that commenced at a municipal wastewater site in the Southeast U.S. was successfully completed in January and converted to a six-month rental contract that is expected to run through the beginning of the third quarter of this year. Our DGI system is delivering the designated volume of oxygen, and the client reports that odor-related complaints in the areas surrounding the plant have been dramatically reduced. We are currently in discussions with multiple other end markets of interest for DGI, including pulp and paper, food and beverage, petrochemical, and horticulture. We have been supported in these efforts with the addition of representative firms with end-market expertise. As we look ahead to 2026, we are optimistic about our potential financial outlook. Our FUEL CHEM business is expected to continue to perform well, driven by the performance of our base accounts and by the expectation that we convert another demonstration account to commercial operation. Our APC business development activities, including our standard opportunities, those associated with respect to the Walco acquisition, and potential tailwinds from data center opportunities, are at the highest level that we have experienced in several years. And regarding DGI, based on progress at our demonstrations, it is expected that we will have our first commercial contract in 2026. Overall, we expect that revenues for 2026 will exceed the level of 2025, with FUEL CHEM approximating 2025 revenues and APC exceeding 2025 performance, without considering the benefit of data center awards, which would be additive to the forecast. Before turning things over to Ellen, I want to thank the entire Fuel Tech, Inc. team for their dedication in advancing our strategic objectives and our shareholders for their patience and support. Now, I would like to turn the call over to Ellen for her comments on the financial results. Ellen, please go ahead. Thank you. Ellen T. Albrecht: Thank you, Vince, and good morning, everyone. I will start off today by reviewing our fourth quarter results. For the quarter, consolidated revenues rose 37% to $7,200,000 from $5,300,000 in the prior-year period, reflecting growth from both our APC and FUEL CHEM segment revenues. APC segment revenue increased 37% to $2,400,000 from $1,800,000, primarily related to timing of project completion. FUEL CHEM had a very strong quarter, generating a 37% increase in revenue to $4,900,000 from $3,500,000, reflecting contributions from our legacy portfolio and the six-month commercially priced demonstration program that commenced in early November. Consolidated gross margin for the fourth quarter rose to 45% of revenues from 42% in last year's fourth quarter, with APC and FUEL CHEM each producing higher margins for the quarter. FUEL CHEM gross margin increased to 46% from 45% in 2024 due to the increase in the revenue base. APC gross margin expanded significantly to 42% in the fourth quarter compared to 36% in the prior-year period as a result of project and product mix. Consolidated APC segment backlog on December 31, 2025 was $7,000,000, up from backlog of $6,200,000 on December 31, 2024. Backlog at 2025 included $3,400,000 of domestically delivered project backlog and $3,600,000 of foreign-delivered project backlog, compared to $1,900,000 of domestic-delivered project backlog and $4,300,000 of foreign-delivered project backlog at 2024. We expect that approximately $6,000,000 of current consolidated backlog will be recognized in the next twelve months. SG&A expenses were $4,200,000 in the fourth quarter compared to $3,900,000 in the prior-year period. As a percentage of revenue, SG&A expenses declined to 57% from 75%, reflecting higher consolidated revenue in the current period offset by the timing of certain expenditures. Research and development expenses for the fourth quarter rose to $504,000 from $405,000 in the same period a year ago, mainly attributed to our commercialization efforts for our DGI technology. Our operating loss narrowed to $1,400,000 compared to a loss of $2,100,000 in last year's fourth quarter, reflecting higher revenue and margin contributions from our operating segment. We continue to take advantage of the favorable interest rate environment and, as of December 31, 2025, have invested a majority of our $31,900,000 in held-to-maturity debt securities and money market funds. This generated $288,000 of interest income in the fourth quarter and $1,400,000 of interest income for 2025. Moving to the results for full year 2025. Consolidated revenue rose 6% to $26,700,000, in line with our most recent guidance provided in November. The increase in full year revenue was driven by a 28% rise in FUEL CHEM segment revenue to $17,800,000, exceeding our guidance for the year. This increase in revenue was partially offset by a decrease in APC segment revenue. Consolidated gross margin for 2025 rose to 46% from 42% in 2024, with higher margins for both the FUEL CHEM and APC operating segments. SG&A expenses for 2025 modestly increased to $14,100,000 from $13,800,000 in 2024, within the guidance range we provided at this time last year. The increase was mainly attributed to employee-related expenditures. As a percentage of revenue, SG&A decreased to 53% from 55%, reflecting higher consolidated revenue. For 2026, we expect SG&A expenses to increase modestly from those in 2025. Research and development expenses for the year were $2,000,000 for 2025, compared to $1,600,000 in 2024. As we move closer to fully commercializing our DGI segment technologies, in addition, we also continue to invest efforts related to our legacy technologies as necessary. Operating loss narrowed to $3,700,000 for 2025 compared to a loss of $4,700,000 in 2024, reflecting higher segment revenues and relatively flat total costs and expenses. Net loss for 2025 was $2,300,000, or $0.08 per diluted share, compared to a net loss of $1,900,000, or $0.06 per diluted share, in 2024. Adjusted EBITDA loss was $2,700,000 in 2025, compared to an adjusted EBITDA loss of $2,200,000 in 2024. Lastly, moving to the balance sheet. Financial condition remains very strong. As of December 31, total cash and cash equivalents, total cash and investments was $31,900,000, comprised of cash and cash equivalents of $11,900,000 and short- and long-term investments of $20,000,000. Net cash provided by operating activities was $3,000,000 for the year as compared to a use of total cash of $2,800,000 in the same period last year. Shares outstanding at quarter end were approximately 31,100,000, equating to cash per share of $1.03. Working capital was $25,700,000, or $0.83 per share. Stockholders' equity was $40,000,000, or $1.29 per share, and the company continues to have no outstanding debt. We remain fully confident in our ability to uphold a strong financial condition and continue funding both short- and long-term growth initiatives across FUEL CHEM, APC, and DGI. I will now turn the call back over to Vince. Vincent J. Arnone: Thanks very much, Ellen. Operator, let us please go ahead and open the line for questions. Operator: Thank you. At this time, we will be conducting a question-and-answer session. Before pressing the star keys. Our first question comes from Sameer Joshi with H.C. Wainwright. Please proceed with your question. Sameer S. Joshi: Hey, good morning, Vince, Ellen. Thanks for taking my call. Good morning. So first, the data center opportunity should be significant for the company. You mentioned you are reliant on these integrators or OEMs for getting the final order. My question is, are you already designed in with these participants or is there further sort of competition once those guys get the orders from data center? Vincent J. Arnone: I cannot say that we are specifically designed in for these operators at this point in time, Sameer. What we are doing is, we would obviously like to be at the point whereby we are designed in with an integrator or operator that is looking to build several sites. But right now, at the beginning phase with some of these operators, what we are doing is establishing ourselves as a potential trusted partner to be able to do the design pollution control system for them. A lot of the parties that are coming to us are not necessarily very familiar with pollution control requirements. So we are definitely playing an education role as we work with some of these parties at this point in time. But we are hoping that the upfront time that I mentioned that we are investing with these opportunities is going to pay off a little bit longer term as these projects actually do come through their evolution and are ultimately awarded. So that is where we stand today. And the situation I would say is slightly different across the different parties that we are dealing with. Sameer S. Joshi: Got it. Understood. And I do not want to conflate this, but the requirements for the less than 85 megawatt plants and short term working less than 24 months, does that in any way affect or impact these data center opportunities? I just do not want to conflate those, but is there any relation? Vincent J. Arnone: Right. Ultimately, on a long-term basis, should not have an impact, Sameer, because most of the projects that we read about, most of the projects that we are having discussions about, are intended to be long-term power generation solutions for that particular data center, right? It would only be in the instance whereby a potential operator or integrator needed that to meet perhaps a very specific startup date and they had the ability to have some power generation equipment up and running for a short period of time to meet that startup date. Again, perhaps, right? But again, from our perspective, the people and party that we are dealing with, they are looking at long-term power generation solutions that are indeed not temporary in nature because they are looking to support that data center long term, not just for less than 24 months. Sameer S. Joshi: Got it. Sticking to sort of regulatory environment, with the PPA declaring carbon dioxide not a pollutant and you talked about the mercury's doctrines, and it indirectly helping you because it does not require NOx reductions, and so existing plants may have extended life because of the other reductions in requirement or loosening of requirement. Are you already seeing any increased activity as a result of this where some of the plans that may be on the way to shut down are now saying that, hey, we can continue to function, and reaching out to you? Vincent J. Arnone: At this point in time, Sameer, it is a little bit too early to assess the impact of those relatively recent rollbacks. We just wanted to point out very specifically that those rollbacks do not impact Fuel Tech, Inc.'s opportunity to capture prospective awards that are specifically related to nitrogen oxide reduction opportunities. So we just want to ensure that there is not confusion related to those rollbacks which are not going to impact Fuel Tech, Inc. business opportunities. Longer term, those rollbacks, they could indeed have the impact of possibly extending the useful lives of some facilities. Sameer S. Joshi: Got it. Moving to FUEL CHEM, it is nice to see the six-month sort of trial order and likely because they are seeing the results likely to convert. Are there more such potential customers that you have in the pipeline or are at least talking to in terms of getting because each additional customer could bring two plus million or almost four plus million in orders annual recurring revenues? Vincent J. Arnone: So at this point in time, yes, we are very optimistic about converting this demonstration to a commercial contract. Hopefully, that will bode well for us here in 2026. But incrementally, as I have said on prior conference calls, the coal-fired base-loaded unit, just call it phenomenon, it is not as robust as it used to be a decade or fifteen years ago. So many coal-fired plants being shut down. We are looking for these pockets of opportunity whereby we can, on an incremental basis, add these one-off opportunities for us. Sameer S. Joshi: Okay. Vincent J. Arnone: And we need to be a little bit careful about saying that each unit is going to be between $2,000,000 and $3,000,000 per opportunity in revenue, because it does vary by unit size and the specific runtime of that unit. I just wanted to qualify that. So to specifically answer your question, we do not have anything of what I would call specifically that we are looking for imminent demonstration, but we are looking at some other opportunities that could be for us, and perhaps with the same body of plants that we are doing business with today, to add another unit or two at plant sites. So there is opportunity there, but again, as I have said previously, we have not looked at FUEL CHEM as being what I would call a material growth opportunity for the past several years. What we are seeing here in the recent term, we are very, very pleased with. We finished 2025 at just under $18,000,000 revenue, which if you would have asked me that question five years ago, I would have said it would not have been possible. So we are very pleased with where we are. And there is some, I will call it, moderate upside opportunity. Opportunity, but it is moderate. Sameer S. Joshi: I am guessing this outlook for 2026 where FUEL CHEM is expected to be at same level as 2025 does not include this incremental opportunity that may convert into, like, from trial to full time. Vincent J. Arnone: Yes. We are looking at it right now very, very conservatively, Sameer, without knowing exactly what the outcome is going to be as we sit here today. We will have more information to share in early May when we have our first quarter conference call. Sameer S. Joshi: Yes. That is fair. And just squeezing in one last one on DGI. It seems this municipal wastewater is working well as well as the fishery seems to be working well. Should we expect revenues from DGI during 2026? Because on the outlook, you did not mention any of that. Vincent J. Arnone: Right. So we are going to recognize, hey, a small dollar value of revenue from the rental of the system at the municipality. That is only $10,000 per month. As we look at the remainder of the year, we are hoping to have a system sale between now and the 2026 of one of our DGI units. It is not going to be material to our overall results. But what is important regarding that activity is it sets the platform for us to be able to further and go ahead and discuss a success story specifically with the end markets that we are looking to chase. And we have not had the opportunity to do that yet. So that moment is extremely critical for us as we look to further develop and commercialize DGI. Sameer S. Joshi: Thanks, Vince, for taking my questions. Congrats on a strong year and good luck. Vincent J. Arnone: Thanks, Sameer. Operator: Our next question comes from Adam Waldo with Lismore Partners. Your line is now live. Adam Waldo: Good day, Vince. I hope you can hear me okay. Your stock trades at $1.20 to $1.25 a share. You have about a dollar a share in cash on your balance sheet. You have reasonable prospect of being cash flow positive in 2026, and you articulate a sizable new business pipeline in the data center area. I would argue that with your stock trading where it is, the market does not believe you are going to close any of that pipeline. You are very optimistic that you can. Over the balance of 2026, and you were optimistic in the 2025 as well. The timing of these projects is very hard to predict. What gives you so much confidence and optimism that you are going to close, you know, a sizable number of data center projects over the next twelve to eighteen months. Vincent J. Arnone: Adam, thanks very much for the question. Yes, you are correct. I mean, we are in a position whereby, yes, we are trading just a little bit above cash value today. We as a company have not been able to go ahead and bring to the table any material award as of yet as to the data center opportunity. So in response to your question, my level of confidence lies in a couple of areas. First of all, as we have seen this opportunity develop, and literally over the past nine to twelve months because it is still what I would call a new opportunity and it is one that we do not believe for Fuel Tech, Inc. is a short-term opportunity, it is one that is going to develop over the next five to ten years. But what we have seen over this past nine to twelve months is more and more players, if you will—players defined as data center integrators, parties that have access to power generation equipment in the form of turbines or engines—and just then the OEMs of those turbines or engines themselves. There have been more inquiries come our way literally over this past three months than we saw come our way over the initial six to nine months, relative to parties seeking to take advantage of the opportunity to provide a power generation solution to the data centers that are going to be built out. Okay. So point number one is just the volume of activity, the different types of parties and players that are coming to the table, and also what I would call the caliber of the parties that we are dealing with as well, in terms of them being in some cases multinational organizations with scale and capability, that give us the confidence that at some point in time here, just given the demand, that Fuel Tech, Inc.'s products and solutions are going to be pulled into this ultimate data center solution. Okay. So number one, the volume of activity gives me a very high level of confidence. Point number two is my confidence in the Fuel Tech, Inc. team to be able to go ahead and basically assimilate all of the inquiries that have been coming our way and determine our best path with these data center integrators and/or engine or turbine suppliers to be able to position us well with those organizations and give these organizations the confidence that we, as Fuel Tech, Inc., can deliver on our air pollution control solution for them. So it is twofold. And yes, I am optimistic. I mean, the level of inquiry is indeed extraordinary. And so it is up to us to capitalize on it, and we are doing everything that we can to do so at this point in time. I hope that answers your question. Adam Waldo: Thank you very much. Vincent J. Arnone: Thank you, Adam. Operator: We have reached the end of the question-and-answer session. I would now like to turn the call back over to Vincent J. Arnone for closing comments. Vincent J. Arnone: Thank you, operator. In closing, I want to thank, obviously, our Fuel Tech, Inc. team for their continued support and dedication. Thanks to all of our stakeholders, again, for your patience. We are doing what we can to create shareholder value. And we have an opportunity landscape in front of us today that we know we need to capitalize on, and we are going to do everything that we can. Thanks to our Board for support as well. With that, I want to wish everyone a good day, and thanks for participating in the conference call. Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation. Before you buy stock in Fuel Tech, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Fuel Tech wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Fuel Tech (FTEK) Q4 2025 Earnings Call Transcript was originally published by The Motley Fool