Hudson Technologies, Inc.

Hudson reported second-quarter 2026 revenue of $78.3 million, up 8% year over year, driven by 12% sales volume growth, partially offset by a 6% decline in average refrigerant sales price. Gross margin was 26% versus 31% in the prior-year quarter. Net income was $4.9 million, or $0.12 per diluted share, versus $10.2 million, or $0.23 per diluted share last year. SG&A was $12.4 million, up $3.1 million. The company ended the quarter with $26 million in cash and no debt, with cash up $6 million sequentially. For 2026, management lowered its full-year gross margin target from mid-20% to low-to-mid-20%. They also said second-half SG&A should increase versus 2025, though by less than in the first half.

Ken Gaglione framed the quarter as strong operationally but pressured by a weak HFC pricing environment and inflationary costs. He emphasized a strategic shift toward less cyclical, more diversified revenue streams, including recovery services, predictive modeling, and future data center opportunities. He also pointed to recovered refrigerant growth, the small recovery truck pilot, and the Icorium technology partnership as ways Hudson is building longer-term capability and capacity.

Brian Bertaux said revenue increased to $78.3 million on stronger volume, but gross margin fell to 26% from 31% because of weaker refrigerant pricing and higher operating costs, especially freight. SG&A rose to $12.4 million due to ERP optimization costs, legal expenses tied to the DLA contract reaward, and higher staffing and consulting for longer-term initiatives. He noted $26 million in cash, no debt, and no share repurchases in the quarter, though Hudson has bought $2.5 million of stock year to date. He also revised the full-year gross margin target down to low-to-mid-20% and said second-half SG&A will remain above 2025 levels, but less so than in the first half.

Analysts focused on ERP implementation costs, HFC pricing trends, illegal imports, the economics of the Icorium technology, and the rationale for higher staffing. Management said ERP optimization has gone better in Q2, with over $1 million invested in the first half and lower costs expected in the second half. On pricing, they said 410A looks to be stabilizing around $6 per pound, but illegal imports remain a significant issue in the millions of pounds and could pressure the market through year-end. They also said the DLA contract was reawarded during the call, and that staffing is being added to support predictive modeling, small-truck recovery, services, and other future initiatives.