Quest Resource Holding Corporation

Second-quarter revenue was $64.1 million, up 8% year over year and 4% sequentially. Gross profit was $10.4 million, down roughly 6% year over year but up 8% sequentially, and gross margin was 16.3% versus 18.5% a year ago and 15.7% in Q1. SG&A was $8.2 million, down 11% year over year. The company recorded an $11 million non-cash goodwill impairment charge. Cash flow from operations was $4.5 million, cash ended at $1 million, availability on the ABL facility was about $19.4 million, and net notes payable was about $59.4 million, down $4.6 million year to date. DSO improved to roughly 70 from the mid-70s, and working capital days fell to 5 from 12 in Q1 and 19 a year ago. For Q3, management expects sequential revenue growth and gross margin to be flat to slightly up.

Perry Moss said Q2 showed the benefits of the company’s push into non-industrial markets, wallet share expansion, and tighter operations. He described the industrial portfolio as having stabilized, though volumes at some accounts remain subdued and may be the new norm, so management is staying disciplined rather than assuming a full recovery. His tone was cautiously optimistic, emphasizing operational excellence, process standardization, and continued focus on growth, margin, cash generation, and debt reduction.

Brett Johnston highlighted that the business is now benefiting from a more diversified revenue base and a leaner cost structure. He pointed to $64.1 million of revenue, $10.4 million of gross profit, 16.3% gross margin, and $8.2 million of SG&A, plus $4.5 million of operating cash flow. He also noted $1 million of cash, about $19.4 million of ABL availability, $59.4 million of net notes payable, a $2 million voluntary early payment to Monroe Capital, and a near-term DSO target in the mid-60s; he said debt reduction remains a key priority.

Analysts focused on the size and nature of recent wallet share wins, especially the automotive customer, and whether the pipeline still includes industrial expansions. Perry said the referenced share-of-wallet opportunity is a 7-figure-plus commodities-sector deal, and that since the back half of 2025 the company has closed nine meaningful share-of-wallet opportunities, all 6- or 7-figure deals. On conversion, he said the gross profit-to-EBITDA conversion should be slightly higher than the prior 50% framework because share-of-wallet wins have lower onboarding costs and higher initial margins.