FUEL TECH, INC.
For the period ended Sep 30, 2025. Filed Nov 4, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 4, 2025
FTEK$1.35+1.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-06-30; filed 2025-08-05.
0001437749-25-024873
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-09-30; filed 2025-11-04.
0001437749-25-033043
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 38 previous paragraphs and 38 current paragraphs.
16 unchanged; 22 reworded; 0 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 0 previous and 0 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Reworded paragraphs (22)
Previous wording
The Company continues to execute on existing project backlog and support our legacy accounts while actively pursuing additional market opportunities. We continue to invest in development of new technologies to expand our product offerings into the water and waste-water treatment market. Our capital resources are sufficient for our immediate and longer-term needs, and we continue to enjoy the services and support of a dedicated workforce. We expect that our cost control efforts will maintain our existing levels of operating expenditures and that new business opportunities will lead to an improved financial and market outlook.
Current wording
The Company experienced a return to profitable operations during the current quarter, brought on by strong margin contributions from both the FUEL CHEM and Air Pollution Control (APC) operating segments. Improved performance from the FUEL CHEM segment was bolstered by the commercialization of a demonstration program in the second half of 2024, and the APC segment margins were positively impacted by the increase in contributions from ancillary revenues. The Company continues to execute on existing project backlog and support our legacy accounts while actively pursuing additional market opportunities. We continue to invest in development of new technologies to expand our product offerings into the water and waste-water treatment market. Our capital resources are sufficient for our immediate and longer-term needs, and we continue to enjoy the services and support of a dedicated workforce. We expect that our cost control efforts will maintain our existing levels of operating expenditures and that new business opportunities will lead to an improved financial and market outlook.
Previous wording
Our FUEL CHEM segment performance is in line with expectations in revenue and segment operating profits in the current quarter as compared to 2024. The FUEL CHEM segment continues to thrive from operational demand from our client base and the contribution of a new account added in the second half of 2024.
Current wording
Our FUEL CHEM segment experienced an increase in revenue and segment operating profits in the current quarter as compared to 2024. The FUEL CHEM segment continues to thrive from operational demand from our client base and the contribution of a new account added in the second half of 2024.
Previous wording
Our Air Pollution Control (APC) business experienced a decrease in revenue in the current quarter as compared to 2024, primarily due to timing of project execution and customer driven delays. We are encouraged by the depth of our business development activities, which reflects an increased focus on global emissions protocols across a variety of fuel sources. Our Consolidated APC backlog at June 30, 2025 was $7,811 and our global sales pipeline is in the $75 -100 million range.
Current wording
Our APC business experienced a decrease in revenue in the current quarter as compared to 2024, primarily due to timing of project execution and customer driven delays. We are encouraged by the depth of our business development activities, which reflects an increased focus on global emissions protocols across a variety of fuel sources. Our Consolidated APC backlog at September 30, 2025 was $9,472 and our global sales pipeline is in the $75 -100 million range.
Previous wording
Revenues for the three-month periods ending June 30, 2025 and 2024 were$5,558 and$7,042, respectively, representing a decrease of$1,484, or 21%, versus the same period last year. Revenues for the six-month periods ending June 30, 2025 and 2024 were consistent at $11,940 and $11,999, respectively.
Current wording
Revenues for the three-month periods ending September 30, 2025 and 2024 were$7,490 and$7,851, respectively, representing a decrease of$361, or 5%, versus the same period last year. Revenues for the nine-month periods ending September 30, 2025 and 2024 were $19,430 and $19,850, respectively, representing a decrease of $420, or 2%, versus the same period last year.
Previous wording
The APC technology segment generated revenues of $2,505 for the three-month period ended June 30, 2025, representing a decrease of$1,444, or 37%, from the prior year amount of $3,949. The APC technology segment generated revenues of $3,808 for the six-month period ended June 30, 2025, representing a decrease of $2,459, or 39%, from the prior year amount of $6,267. This decrease in APC revenue was primarily related to timing of project execution on existing contracts. Consolidated APC backlog at June 30, 2025 was $7,811 versus backlog at December 31, 2024 of $6,175. Our current backlog consists of U.S. domestic delivered projects totaling $2,833 and international delivered projects totaling $4,978.
Current wording
The APC technology segment generated revenues of $2,707 for the three-month period ended September 30, 2025, representing a decrease of$517, or 16%, from the prior year amount of $3,224. The APC technology segment generated revenues of $6,515 for the nine-month period ended September 30, 2025, representing a decrease of $2,976, or 31%, from the prior year amount of $9,491. This decrease in APC revenue was primarily related to timing of project execution on existing contracts. Consolidated APC backlog at September 30, 2025 was $9,472 versus backlog at December 31, 2024 of $6,175. Our current backlog consists of U.S. domestic delivered projects totaling $3,989 and international delivered projects totaling $5,483.
Previous wording
The FUEL CHEM technology segment generated revenues of $3,053 and $3,093 for the three-month periods ended June 30, 2025 and 2024, respectively. The FUEL CHEM technology segment generated revenues of $8,132 and $5,732 for the six-month periods ended June 30, 2025 and 2024, respectively, representing an increase of $2,400, or 42%. This increase in FUEL CHEM revenue for the six months ended June 30, 2025 as compared to the same period in the prior year was primarily due tooutage completions and increased operation dispatch at legacy accounts, as well as sustained business from a new customer account added midyear in 2024.
Current wording
The FUEL CHEM technology segment generated revenues of $4,783 and $4,627 for the three-month periods ended September 30, 2025 and 2024, respectively, representing an increase of $156, or 3%, versus the same period last year. The FUEL CHEM technology segment generated revenues of $12,915 and $10,359 for the nine-month periods ended September 30, 2025 and 2024, respectively, representing an increase of $2,556, or 25%. This increase in FUEL CHEM revenue for the three and nine months ended September 30, 2025 as compared to the same period in the prior year was primarily due tooutage completions and increased operation dispatch at legacy accounts, as well as sustained business from a new customer account added midyear in 2024.
Previous wording
Consolidated gross margin percentage for the three-month periods ended June 30, 2025 and 2024 was 46% and 42%, respectively. For the three-month periods ended June 30, 2025 and 2024 the FUEL CHEM operating segment gross margin was 47% and 46%, respectively. FUEL CHEM gross margin increased from the prior year primarily due to an increased volume of sales activity combined with relatively flat segment administrative expenses. APC segment gross margin increased to 44% from 39% primarily due to product and project mix.
Current wording
Consolidated gross margin percentage for the three-month periods ended September 30, 2025 and 2024 was 49% and 43%, respectively. For the three-month periods ended September 30, 2025 and 2024 the FUEL CHEM operating segment gross margin was 50% and 49%, respectively. FUEL CHEM gross margin increased from the prior year primarily due to an increased volume of sales activity combined with relatively flat segment administrative expenses. APC segment gross margin increased to 47% from 35% primarily due to product and project mix.
Previous wording
Consolidated gross margin percentage for the six-month periods ended June 30, 2025 and 2024 was 46% and 42%, respectively. For the six-month periods ended June 30, 2025 and 2024 the FUEL CHEM operating segment gross margin was 49% and 44%, respectively. FUEL CHEM gross margin increased from the prior year primarily due to an increased volume of sales activity combined with relatively flat segment administrative expenses. APC segment gross margin increased to 40% from 39% primarily due to product and project mix.
Current wording
Consolidated gross margin percentage for the nine-month periods ended September 30, 2025 and 2024 was 47% and 42%, respectively. For the nine-month periods ended September 30, 2025 and 2024 the FUEL CHEM operating segment gross margin was 49% and 47%, respectively. FUEL CHEM gross margin increased from the prior year primarily due to an increased volume of sales activity combined with relatively flat segment administrative expenses. APC segment gross margin increased to 43% from 38% primarily due to product and project mix.
Previous wording
Selling, general and administrative expenses (SG&A) were$3,347 and$3,245 for the three-month periods ended June 30, 2025 and 2024, respectively. For the three-month period ended June 30, 2025, the increase of $102 is primarily the result of increases in professional service fees of $54, increases in international and domestic administrative expenses of $33 and $32, respectively, and increases in employee related expenses of $8, offset by a decrease in travel expenses of $24. For the three-month periods ending June 30, 2025 and 2024, SG&A as a percentage of revenues increased to 60% from 46%. The increase versus the comparable period is primarily due to the decrease in revenues compared to prior quarter.
Current wording
Selling, general and administrative expenses (SG&A) were$3,207 and$3,225 for the three-month periods ended September 30, 2025 and 2024, respectively. For the three-month period ended September 30, 2025, the decrease of $18 is primarily the result of a decrease in administrative expenses. For the three-month periods ending September 30, 2025 and 2024, SG&A as a percentage of revenues increased to 43% from 41%. The increase versus the comparable period is primarily due to the decrease in revenues compared to prior quarter.
Previous wording
Selling, general and administrative expenses (SG&A) were $6,688 and $6,590 for the six-month periods ended June 30, 2025 and 2024, respectively. For the six-month period ended June 30, 2025, the increase of $98 is primarily the result of increases in professional service fees of $80 and an increase in employee related costs of $61, offset by a decrease in travel expenses of $43. For the six-month periods ending June 30, 2025 and 2024, SG&A as a percentage of revenues remained relatively flat.
Current wording
Selling, general and administrative expenses (SG&A) were $9,895 and $9,815 for the nine-month periods ended September 30, 2025 and 2024, respectively. For the nine-month period ended September 30, 2025, the increase of $80 is primarily the result of an increase in domestic and international administrative expenses. For the nine-month periods ending September 30, 2025 and 2024, SG&A as a percentage of revenues increased to 51% from 49%. The increase versus the comparable period is primarily due to the decrease in revenues compared to prior year.
Previous wording
Research and development expenses were$490 and$422 for the three-month periods ended June 30, 2025 and 2024, respectively. Research and development expenses were $1,060 and $798 for the six-month periods ended June 30, 2025 and 2024, respectively. The expenditures in our research and development expenses are focused on new product development efforts in the pursuit of commercial applications for technologies outside of our traditional markets, and in the development and analysis of new technologies that could represent incremental market opportunities. This includes water treatment technologies and more specifically, our DGI® Dissolved Gas Infusion Systems, an innovative alternative to current aeration technology. This infusion process has a variety of applications in the water and wastewater industries, including remediation, treatment, biological activity, and wastewater odor management. DGI® technology benefits include reduced energy consumption, installation costs, and operating costs, while improving treatment performance.
Current wording
Research and development expenses were$450 and$361 for the three-month periods ended September 30, 2025 and 2024, respectively. Research and development expenses were $1,510 and $1,159 for the nine-month periods ended September 30, 2025 and 2024, respectively. The expenditures in our research and development expenses are focused on new product development efforts in the pursuit of commercial applications for technologies outside of our traditional markets, and in the development and analysis of new technologies that could represent incremental market opportunities. This includes water treatment technologies and more specifically, our DGI® Dissolved Gas Infusion Systems, an innovative alternative to current aeration technology. This infusion process has a variety of applications in the water and wastewater industries, including remediation, treatment, biological activity, and wastewater odor management. DGI® technology benefits include reduced energy consumption, installation costs, and operating costs, while improving treatment performance.
Previous wording
Interest income was$537 for the three-month period ended June 30, 2025 compared to$334 for the same period in 2024. Interest income for the three-month period ended June 30, 2025 included $257 in interest income related to collection of our ERC benefit. Interest income was $816 for the six-month period ended June 30, 2025 compared to $645 for the same period in 2024. Interest income primarily relates to interest received on the held-to-maturity debt securities and money market funds.
Current wording
Interest income was$311 for the three-month period ended September 30, 2025 compared to$323 for the same period in 2024. Interest income was $1,127 for the nine-month period ended September 30, 2025 compared to $968 for the same period in 2024. Interest income primarily relates to interest received on the held-to-maturity debt securities and money market funds. Interest income for the nine-month period ended September 30, 2025 included $263 in interest income related to collection of our ERC benefit.
Previous wording
Other income, net was$86 for the three-month period ended June 30, 2025 compared to Other expense, net of$34 for the same period in 2024. Other income, net was $20 for the six-month period ended June 30, 2025 compared to Other income, net of $1,639 for the same period in 2024. Other income in 2025 and Other expense for the three-month period ended June 30, 2024 was mainly due to transactional foreign exchange gains and losses recognized from repayment of intercompany balances. Other income for the six-month period ended June 30, 2024 primarily relates to the employee retention credit of $1,677 recorded in the first quarter of 2024.
Current wording
Other expense, net was$5 for the three-month period ended September 30, 2025 compared to Other expense, net of$63 for the same period in 2024. Other income, net was $15 for the nine-month period ended September 30, 2025 compared to Other income, net of $1,576 for the same period in 2024. Other income and expense in 2025 and Other expense for the three-month period ended September 30, 2024 was mainly due to transactional foreign exchange gains and losses recognized from repayment of intercompany balances. Other income for the nine-month period ended September 30, 2024 primarily relates to the employee retention credit of $1,677 recorded in the first quarter of 2024.
Previous wording
We have losses from operations during thesix-month period ended June 30, 2025 totaling$2,260. Our cash provided by operations for this same period totaled$1,487.
Current wording
We have losses from operations during thenine-month period ended September 30, 2025 totaling$2,256. Our cash provided by operations for this same period totaled$4,583.
Previous wording
Our cash and cash equivalent balance as of June 30, 2025 totaled $10,589, which includes $1,791 of cash equivalents, and our working capital totaled $25,685. We have no outstanding debt other than our outstanding letters of credit, under our Investment Collateral Security agreement with BMO Harris Bank, N.A. (the Investment Collateral Security agreement), which does not have any financial covenants. We expect to continue operating under this arrangement for the foreseeable future.
Current wording
Our cash and cash equivalent balance as of September 30, 2025 totaled $13,677, which includes $2,221 of cash equivalents, and our working capital totaled $26,043. We have no outstanding debt other than our outstanding letters of credit, under our Investment Collateral Security agreement with BMO Harris Bank, N.A. (the Investment Collateral Security agreement), which does not have any financial covenants. We expect to continue operating under this arrangement for the foreseeable future.
Previous wording
Operating activities provided cash of$1,487 for thesix-month period ended June 30, 2025, primarily due to a decrease in accounts receivable of $1,987, collections of the ERC receivable of $1,232, an increase in accrued liabilities and other noncurrent liabilities of $203, and removals of non-cash items from our net loss from continuing operations of depreciation and amortization of $345 and stock-based compensation, net of forfeitures of $212, offset by a decrease in accounts payable of $833 and an increase in inventory of $218.
Current wording
Operating activities provided cash of$4,583 for thenine-month period ended September 30, 2025, primarily due to a decrease in accounts receivable of $3,082, collections of the ERC receivable of $1,677, an increase in accrued liabilities and other noncurrent liabilities of $516, a decrease in prepaid expenses, other current assets, and other non-current assets of $302, and removals of non-cash items from our net loss from continuing operations of depreciation and amortization of $517 and stock-based compensation, net of forfeitures of $269, offset by a decrease in accounts payable of $560.
Previous wording
Operating activities used cash of $2,664 for thesix-month period ended June 30, 2024, primarily due to an increase in accounts receivable of $1,928 (including the impact of the employee retention credit receivable) and a decrease in accrued expenses and other current liabilities of $1,728, offset by an increase in accounts payable of $524 and removals of non-cash items from our net income from continuing operations for depreciation and amortization of $192 and stock-based compensation of $228.
Current wording
Operating activities used cash of $1,785 for thenine-month period ended September 30, 2024, primarily due to an increase in accounts receivable of $2,522 (including the impact of $1,677 for the employee retention credit receivable) and a decrease in accrued expenses and other current liabilities of $1,215, offset by an increase in accounts payable of $842, a decrease in prepaid expenses, other current assets and other non-current assets of $655, and removals of non-cash items from our net income from continuing operations of stock-based compensation of $337, depreciation and amortization of $290, and interest income on held-to-maturity securities of $108.
Previous wording
Investing activities provided cash of $700 and used cash of $4,311 for thesix-month periods ended June 30, 2025 and 2024, respectively. Investing activities for thesix-month periods ended June 30, 2025 and 2024 primarily consisted of purchases of debt securities as investments of $4,949 and $11,107, respectively. Investing activities for thesix-month periods ended June 30, 2025 and 2024 were funded by the maturities of debt securities of $5,750 and $7,000, respectively.
Current wording
Investing activities provided cash of $765 and used cash of $3,388 for thenine-month periods ended September 30, 2025 and 2024, respectively. Investing activities for thenine-month periods ended September 30, 2025 and 2024 primarily consisted of purchases of debt securities as investments of $10,004 and $14,072, respectively. Investing activities for thenine-month periods ended September 30, 2025 and 2024 were funded by the maturities of debt securities of $11,000 in both periods.
Previous wording
Financing activities used cash of $222 and $95, respectively, for the six months ended June 30, 2025 and 2024 due to taxes paid on behalf of the equity award participants on the vesting of restricted stock units.
Current wording
Financing activities used cash of $222 and $95, respectively, for the nine months ended September 30, 2025 and 2024 due to taxes paid on behalf of the equity award participants on the vesting of restricted stock units.
Previous wording
We expect additional capital expenditures in 2025 for the DGI business, maintenance of field equipment, computer and systems, and general office equipment. We expect to fund our capital expenditures with cash from operations or cash on hand.
Current wording
We expect additional capital expenditures during the fourth quarter of 2025 for the DGI business, maintenance of field equipment, computer and systems, and general office equipment. We expect to fund our capital expenditures with cash from operations or cash on hand.
Previous wording
The Company's Investment Collateral Security agreement is used for the sole purpose of issuing standby letters of credit and requires us to pledge our investments as collateral for 150% of the aggregate face amount of outstanding standby letters of credit. The Company pays 250 basis points on the face values of outstanding letters of credit. There are no financial covenants set forth in the Investment Collateral Security agreement. At June 30, 2025, the Company had outstanding standby letters of credit totaling approximately $2,923 under the Investment Collateral Security agreement. At June 30, 2025, the investments held as collateral totaled $4,385. Fuel Tech is committed to reimbursing the issuing bank for any payments made by the bank under these instruments.
Current wording
The Company's Investment Collateral Security agreement is used for the sole purpose of issuing standby letters of credit and requires us to pledge our investments as collateral for 150% of the aggregate face amount of outstanding standby letters of credit. The Company pays 250 basis points on the face values of outstanding letters of credit. There are no financial covenants set forth in the Investment Collateral Security agreement. At September 30, 2025, the Company had outstanding standby letters of credit totaling approximately $3,141 under the Investment Collateral Security agreement. At September 30, 2025, the investments held as collateral totaled $4,711. Fuel Tech is committed to reimbursing the issuing bank for any payments made by the bank under these instruments.
Previous wording
Fuel Tech issues a standard product warranty with the sale of its products to customers as discussed in Note 13. There was no change in the warranty liability balance during the six months ended June 30, 2025.
Current wording
Fuel Tech issues a standard product warranty with the sale of its products to customers as discussed in Note 13. There was no change in the warranty liability balance during the nine months ended September 30, 2025.