Quest Resource Holding Corporation Reports Mixed Q3 Results with Revenue Growth and Increased Losses

Quest Resource Holding Corporation (QRHC) reported its financial results for the third quarter and the nine months ended September 30, 2024, highlighting a mixed performance in revenue and profitability compared to the previous fiscal period.

For the three months ended September 30, 2024, QRHC generated revenue of $72.8 million, reflecting a 3.3% increase from $70.4 million in the same period of 2023. This growth was attributed to newly added customers and strong demand, which contributed approximately $16 million, offset by a $13 million decline due to lost customers and soft market conditions. However, for the nine months ended September 30, 2024, total revenue decreased slightly to $218.6 million from $219.0 million in 2023, primarily due to lower volumes from lost customers.

Gross profit for the third quarter of 2024 was $11.7 million, down from $12.4 million in the prior year, resulting in a gross profit margin of 16.1%, compared to 17.7% in Q3 2023. For the nine-month period, gross profit increased to $39.3 million from $38.6 million, with a slight improvement in gross profit margin to 18.0% from 17.6%. Operating expenses rose to $12.6 million in Q3 2024 from $12.0 million in Q3 2023, driven by increased labor-related costs.

The company reported an operating loss of $940,315 for the third quarter of 2024, a significant decline from an operating income of $468,538 in Q3 2023. For the nine months, operating income decreased to $2.7 million from $3.1 million. The net loss for the third quarter was $3.4 million, compared to a loss of $2.1 million in the same quarter of 2023. For the nine months, the net loss increased to $5.6 million from $5.0 million in the prior year.

Cash and cash equivalents as of September 30, 2024, stood at $1.1 million, a notable increase from $0.3 million at the end of 2023. The company reported net cash used in operating activities of $1.3 million for the nine months, a stark contrast to net cash provided of $6.7 million in the same period of 2023. Additionally, QRHC made significant investments in property and equipment, totaling $4.3 million, compared to $0.2 million in the prior year.

Strategically, QRHC has been active in financing, with proceeds from credit facilities amounting to $81.5 million for the nine months ended September 30, 2024, compared to $63.7 million in 2023. The company also reported an increase in total notes payable to $74.8 million as of September 30, 2024, from $67.8 million at the end of 2023.

Overall, QRHC's financial results indicate a challenging environment with increased losses and operational costs, despite some revenue growth in the third quarter.