Quest Resource’s third quarter was defined by meaningful sequential improvements, with management crediting internal operational changes and cost reductions for the company’s progress despite a difficult operating backdrop. CEO Perry Moss described the period as one of “strong sequential improvement in our financial performance,” underpinned by a revamped sales approach and disciplined cost management. The year-over-year revenue decline was primarily attributed to the divestiture of lower-margin mall-related business and continued softness in industrial customer volumes.
Is now the time to buy QRHC? Find out in our full research report (it’s free for active Edge members).
Quest Resource (QRHC) Q3 CY2025 Highlights:
- Revenue: $63.34 million vs analyst estimates of $59.83 million (13% year-on-year decline, 5.9% beat)
- Adjusted EPS: -$0.02 vs analyst estimates of -$0.01 ($0.01 miss)
- Adjusted EBITDA: $2.94 million vs analyst estimates of $2.35 million (4.6% margin, relatively in line)
- Operating Margin: 1.5%, up from -1.3% in the same quarter last year
- Market Capitalization: $34.44 million
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Quest Resource’s Q3 Earnings Call
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Gerry Sweeney (ROTH Capital): asked about stabilization in industrial markets and efforts to diversify end markets. CEO Perry Moss responded that while industrial volumes remain challenged, markets like retail and grocery are expected to ramp in Q4, and Quest is focused on expanding wallet share.
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Aaron Spychalla (Craig Hallum): inquired about the size and competitive dynamics of a new food sector win. Moss confirmed it was a competitive win, representing 20% of the client’s portfolio and offering further expansion opportunities.
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Owen Rickert (Northland Capital Markets): questioned the drivers behind stronger-than-expected gross profit and vendor management progress. CFO Brett Johnston cited improved operational efficiencies and more stable industrial client volumes as key factors.
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Greg Kitt (Pinnacle Family): probed the company's operational and commercial execution since Moss joined as CEO, and future potential for improvement. Moss rated current execution at six to seven out of ten, citing room for further optimization.
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Andrew Heffer (Pinnacle Capital): asked about debt reduction priorities and operational leverage targets for 2026. Johnston indicated aggressive debt paydown remains a goal, with flexibility constrained by current banking agreements until after Q1 next year.
Catalysts in Upcoming Quarters
In the upcoming quarters, the StockStory team will be monitoring (1) the pace and breadth of share of wallet gains with existing and new clients, (2) the impact of ongoing operational improvements and automation on margins and cash flow, and (3) diversification efforts into less cyclical markets such as retail and hospitality. Continued progress in vendor relationships and data monetization will also be important markers of strategic execution.
Quest Resource currently trades at $1.63, up from $1.39 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free for active Edge members).
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