Slide 1: Q1 2025 Earnings Call
Nasdaq: ARQ Q1 2025 Earnings Call May 7, 2025
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, which provides a “safe harbor” for such statements in certain circumstances. When used in this presentation, the words “can,” “will,” “may,” “intends,” “expects,
Slide 3: Notable Q1 2025 & Recent Achievements
Notable Q1 2025 & Recent Achievements Total Revenue Gross Margin Adjusted EBITDA1 $27.2 million 36.4% $4.1 million 25% growth YoY; driven reflects sustainable vs. ($0.4) million prior year by Average Selling Price improvement in PAC period; 4 straight quarters (“ASP”) improvement & performance of po
Slide 4: Q1 2025 Financial Highlights
Q1 2025 Financial Highlights $ millions unless noted Q1 2025 Q1 2024 Revenue increase of 25% driven by higher ASP, product mix and Revenue $27.2 $21.7 volumes ASP increased ~13% YoY, marking Gross Margin 36.4% 36.9% 8th consecutive quarter of double- digit YoY increase in ASP Adjusted EBITDA(1)
Slide 5: Steady Price Increases Underpin Sustainable PAC Business Performance
Steady Price Increases Underpin Sustainable PAC Business Performance YoY ASP % Change Q1 2025 Outlook 30% o 8th consecutive quarter of o Long-term growth remains a 25% double digit % ASP YoY focus increase o Pace of pricing growth expected 20% o 13% ASP increase YoY to continue, but naturally 15% (1
Slide 6: Attractive & Consistent Growth in Gross Margin
Attractive & Consistent Growth in Gross Margin Material and consistent gross margin improvement due to ASP growth and focused cost cutting initiatives Gross Margin % o Gross margin remained strong at 36.4% in Q1 49.8% 50% 2025 45% o Actively optimizing gross margin with room for 40% 38.6% further ef
Slide 7: Red River: Driving Arq’s Corporate Transformation
Red River: Driving Arq’s Corporate Transformation What We’re Doing What it Delivers Red River Project • Adding production of GAC + expanding plant to deliver incremental 25mm pounds of GAC product Expanded products and • Entered into supply contracts for approximately 16 million pounds1 of solutio
Slide 8: Red River GAC Development Update
Red River GAC Development Update • Mechanical completion of GAC Facility construction completed in January 2025 • Small non-commercial scale volumes of GAC recently produced, but not yet at consistency necessary for commercial scale production • First commercial-scale production of on-specification
Slide 9: PFAS Regulations & Impact
PFAS Regulations & Impact EPA under new Administration remains committed to reducing and removing PFAS contamination • On April 28, 2025, EPA Administrator Lee Zeldin confirmed that “we are tackling PFAS from all of EPA’s program offices, advancing research and testing, stopping PFAS from getting in
Slide 10: Arq Benefiting from U.S. Tariffs
Arq Benefiting from U.S. Tariffs Unique position with fully integrated domestic supply chain • Only domestic producer with fully integrated activated carbon supply chain - competitive advantage further amplified under tariffs • Many competitors face headwinds due to imported feedstock dependencies •
Slide 11: Growth Beyond Activated Carbon
Growth Beyond Activated Carbon Multiple R&D programs focused on maximising the potential uses of our unique Arq Powder (highly purified, small particle hydrocarbon) and our mineral matter waste stream, both derived from coal waste Potential applications: • Asphalt – using our Arq Powder as a blendin
Slide 12: Key Near-term Priorities & Objectives
Key Near-term Priorities & Objectives 1. Continue to optimize successful turnaround of foundational (now cash generative) PAC business and reduce overall costs 2. Commence and ramp production at Red River GAC facility as next phase of Arq’s transformation 3. Successfully conclude negotiations to con
Slide 13: Financial Detail
Financial Detail
Slide 14: Consolidated Balance Sheet
Consolidated Balance Sheet1 As of (in thousands, except share data) March 31, 2025 December 31, 2024 ASSETS Current assets: Cash $ 6,336 $ 13,516 Receivables, net 15,368 14,876 Inventories, net 21,749 19,314 Prepaid expenses and other current assets 4,781 4,650 Total current assets 48,234 52,356 Res
Slide 15: Consolidated Statements of Operations
Consolidated Statements of Operations1 Three Months Ended March 31, (in thousands, except per share data) 2025 2024 Revenue $ 27,247 $ 21,740 Cost of revenue, exclusive of depreciation and amortization 17,332 13,713 Operating expenses: Selling, general and administrative 6,053 7,666 Research and dev
Slide 16: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows1 Three Months Ended March 31, (in thousands) 2025 2024 Cash flows from operating activities Net income (loss) $ 203 $ (3,419) Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: Depreciation, amortization, depletion
Slide 17: Consolidated Statements of Cash Flows - Cont.
Consolidated Statements of Cash Flows - Cont. 1 Three Months Ended March 31, (in thousands) 2025 2024 Cash flows from investing activities Acquisition of property, plant, equipment and intangible assets, net $ (3,710) $ (9,596) Acquisition of mine development costs (43) (51) Distributions from equit
Slide 18: Adjusted EBITDA Reconciliation to Net Loss
Adjusted EBITDA (Loss) Reconciliation to Net Loss Three Months Ended March 31, (in thousands) 2025 2024 Net income (loss) $ 203 $ (3,419) Depreciation, amortization, depletion and accretion 2,181 1,716 Amortization of Upfront Customer Consideration 127 127 Interest expense, net 671 432 EBITDA (loss)
Slide 19: Appendix
Appendix
Slide 20: Company Overview
Company Overview General Applications of Our Products o Arq is a diversified, environmental technology company producing activated carbon products which reduce or reverse environmental liabilities, PFAS Remediation including PFAS or “forever chemicals”. Our products enable a cleaner and safer planet
Slide 21: What is Activated Carbon?
What is Activated Carbon? • Also known as activated charcoal • Activated carbons are largely engineered sorbent materials which purify, filter and remove pollutants from air, water and soil • When activated, able to “adsorb” a wide range of harmful compounds from air, gas & liquids • “Activation” pr
Slide 22: Products & Market Applications
Products & Market Applications GAC from bituminous coal best at remediating PFAS and forever chemicals Applications Market Focus • Potable Water • PFAS Remediation Granular Municipal water, PFAS Growth Activated remediation, soil & • Wastewater Treatment Business Carbon groundwater remediation, • Bi
Slide 23: Our Key GAC Differentiators
Our Key GAC Differentiators Activated carbon is a technical sale – our unique products, process and supply chain are key differentiators We will be the only GAC producer: …with a vertically …using bituminous …and with estimated integrated domestic coal waste feedstock, lower Scope 1 & 2 supply chain
Slide 24: Growth Beyond Red River Phase I
Growth Beyond Red River Phase I Key Triggers Needed to Pursue Phase II Illustrative Red River GAC Buildout Assumes Phases I & II are built ~1-year apart; potential of 125 million lbs. • Successful commissioning of Red River Phase I 140 • Achieving Phase I annual nameplate production levels of 25 mil
Slide 25: Biogas & Renewable Natural Gas Purification
Biogas & Renewable Natural Gas Purification • Biogas is produced when organic material • The RNG is passed directly through a GAC column to achieve decomposes in anaerobic conditions. Biogas can be this purification processed to remove impurities – such as CO2, H2S and Siloxane – to produce high-qua
Slide 26: Strong North American GAC Market Fundamentals
Strong North American GAC Market Fundamentals Data suggest demand outpacing supply – Arq anticipates a 3-5x increase in demand over next 5 years not accounting for potential incremental demand growth from other sectors (e.g., biogas) • Arq expects annual GAC market to grow ~75% to >700mm lbs1 • Woul
Slide 27: GAC Market Summary
GAC Market Summary Estimated 2025 GAC Demand by Sector 1 Pharma / chem Municipal wastewater Food • GAC demand dominated by Groundwater potable water 3% 1% 3% 6% • Smaller markets can offer higher Industrial Wastewater pricing and growth 7% • Provides potential for meaningful diversification for Arq
Slide 28: Activated Carbon Competitive Landscape
Activated Carbon (AC) Competitive Landscape Arq remains only public pure-play in activated carbon • Attractive growth market with concentrated pool of private competitors Entering GAC market at sweet-spot: providing meaningful scale while also representing a • Calgon Carbon Corporation is the viab
Slide 29: Ongoing GAC Contract Wins Validate Products and Strategy
Ongoing GAC Contract Wins Validate Products and Strategy Ongoing contract wins demonstrate Technical Robust, growing Diverse end-market Attractive Validity of strategic viability of Arq market, limited demand for GAC economics of GAC investment in high- products available supply (water, PFAS, biogas
Slide 30: Advancing GAC Technology for Enhanced PFAS Removal Efficacy
Advancing GAC Technology for Enhanced PFAS Removal Efficacy Building Market Increasing Increasing Removal Enhancing GAC Adoption Treatment Capacity Speed Purity Advancing testing scale Improving water treatment Decreasing equipment size Reducing extractable from lab to field volume up to 10x or wate
Slide 31: Arq: Key Company Highlights
Arq: Key Company Highlights Vertically Integrated The only vertically integrated domestic activated carbon supply chain 100% Domestic Our vertically integrated supply chain consumes 100% domestic feedstock, differentiating us vs. internationally dependent peers Growth-Focused Legacy PAC assets provi
Slide 32: Arq Investor Relations
Arq Investor Relations Contacts: Anthony Nathan, Arq Marc Silverberg, ICR investors@arq.com 8051 E. Maplewood Ave, Suite 210 Greenwood Village, CO 80111 Nasdaq: ARQ