Earnings call transcript: Birchtech Corp reports Q2 2025 results, expands into water purification

Birchtech Corp (market cap: $60.74 million) reported its Q2 2025 earnings, highlighting a slight decrease in revenue to $3.3 million from $3.4 million in the previous year. Despite this, the company showed improvement in net loss, reporting a negative 2 cents per share. The company is making strides in diversifying its offerings by expanding into water purification technology, which is expected to be commercially available in 2026. The stock saw a modest increase of 3.66% following the announcement, reflecting investor optimism about the company’s strategic initiatives. According to InvestingPro analysis, the stock currently appears undervalued based on its Fair Value estimate, with strong momentum shown by a 21.24% return over the past six months.

Key Takeaways

• Revenue for Q2 2025 was $3.3 million, a slight decrease from the previous year.
• Net loss improved to negative 2 cents per share.
• Birchtech is diversifying into water purification, with commercial availability targeted for 2026.
• The company’s stock increased by 3.66% post-announcement.
• Birchtech aims to up-list to a major U.S. exchange in 2025.

Company Performance

Birchtech Corp’s Q2 2025 performance showed resilience despite a slight decline in revenue. The company is actively working to expand its market share in the coal power sector and is now venturing into water purification. This strategic shift is expected to leverage its existing technologies and open new revenue streams, aligning with industry trends towards environmental sustainability.

Financial Highlights

• Revenue: $3.3 million, down from $3.4 million YoY.
• Gross Profit: $1 million, with a margin of 29.8%.
• Net Loss: Improved to $1.5 million, or negative 2 cents per share.
• Adjusted EBITDA: Negative $1 million.
• Cash Position: $1.5 million, with no debt.

Outlook & Guidance

Looking ahead, Birchtech aims for its air business to generate $18 million in revenue in 2025, with an annualized run rate of $40 million by 2026. The company plans to up-list to a major U.S. exchange and expects to see revenue from its water business in the latter half of 2025. These initiatives are part of a broader strategy to enhance market presence and drive long-term growth.

Executive Commentary

CEO Richard McPherson expressed confidence in the company’s growth trajectory, stating, "We are on a robust growth trajectory and I believe are poised to create sustainable long-term value for my fellow shareholders." He also highlighted the company’s efforts to align with regulatory requirements, saying, "The EPA is trying to... have utilities meet these regulations... in a reasonable fashion that keeps the cost down."

Risks and Challenges

• Market Saturation: Increasing competition in the air and water purification sectors.
• Regulatory Changes: Potential impacts from changes in environmental regulations.
• Supply Chain Issues: Challenges in sourcing raw materials for new technologies.
• Patent Litigation: Ongoing legal strategies related to patent infringement.
• Economic Conditions: Broader economic factors that could affect capital availability and investment.

Q&A

During the earnings call, analysts inquired about the impact of MATS regulation changes and the company’s strategy for expanding its market share through legal settlements. CEO McPherson explained the firm’s approach to launching its water business, emphasizing the role of newly opened design centers in achieving this goal.

Full transcript - Birchtech Corp (BCHT) Q2 2025:

Conference Operator: Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to BurgeTech’s Second Quarter twenty twenty five Earnings Conference Call. During today’s presentation, all parties will be in a listen only mode. Following the presentation, the conference will be opened for questions for dial in participants.

This conference is being recorded today, 08/14/2025, and the earnings press release accompanying this conference call was issued after the market closed today. On our call today is Vertex President and CEO, Richard McPherson and CFO, Fiona Fitzmaurice. Before we get started, I will read a disclaimer about forward looking statements. This conference call may contain, in addition to historical information, forward looking statements that are made pursuant to the safe harbor provisions of The U. S.

Private Securities Litigation Reform Act of 1995 all forward looking information under applicable Canadian securities laws regarding Birkbeck. Forward looking statements include, but are not limited to statements that express the company’s intentions, beliefs, expectations, strategies, predictions, or any other statements relating to its future earnings, activities, events, or conditions. These statements are based on current expectations, estimates, and projections about the company’s business based in part on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may and are likely to differ materially from what is expressed or forecasted in the forward looking statements due to numerous factors discussed from time to time in Burjtec’s periodic filings with the U.

S. Securities and Exchange Commission or Canadian securities regulators. In addition, such statements could be affected by risks and uncertainties related to factors beyond the company’s control that may cause actual results to differ materially from those in the forward looking statements. During today’s call, the company will discuss adjusted EBITDA, a non GAAP financial measure. Adjusted EBITDA is presented as a supplement measure of the company’s performance and exclusive of certain items that the company believes do not reflect the core operations of the company.

Such non GAAP measures should not be considered in isolation or as a substitute for GAAP financial information. Additionally, the company’s definition of these measures may differ from those used by other companies, making comparison across organizations difficult. And finally, this conference call contains time sensitive information that reflects management’s best analysis only as of the date and time of this conference call. The company does not undertake any obligation to publicly update or revise any forward looking statements to reflect future events, information, or circumstances that arise after the date of this conference call. At this time, I’d like to turn the call over to President and CEO, Richard Macpherson.

Richard, the floor is yours.

Richard McPherson, President and CEO, BurgeTech Corp: Thank you operator and thank you to everyone for joining us today. I’d like to welcome you to our second quarter twenty twenty five financial results conference call. Before diving into our financials for the quarter it’s important to reflect on BERTJTECH’s journey and mission. Established in 2008 as Midwest Energy Emissions Corp our initial focus was on developing and commercializing the sorbent enhancement additive or SEA technology. This innovative approach has been instrumental in assisting coal fired power plants across North America to effectively reduce mercury emissions ensuring compliance with environmental regulations for the country.

Birch Tech’s air business built around our patented FEA sorbent technologies that utilizes activated carbon and various halides was widely adopted across the coal fired power industry due to its proven effectiveness in capturing mercury emissions. The success of this technology led to widespread adoption but also infringement as numerous industry players began using our patented process without proper licensing or business supply. So in response, since 2019, the company has aggressively defended its patents through legal action securing significant settlements and a landmark 57,000,000 unanimous jury award. We have continued to convert unlicensed users of our technology into long term business partners, several of which have entered into license agreements or become direct supply customers. Inclusive of enhancements, interest and legal fees, our patent attorneys Caldwell Cassidy Perry have requested a final judgment of 160,000,000 which is currently pending a final decision by the court.

Now recognizing new and evolving environmental challenges we expanded our activated carbon expertise into water purification with the launch of our new patent pending water treatment technologies which are focused on contaminant removal from both potable and wastewater utilities. Spurred by the U. S. EPA regulations water treatment is a growing market and in critical need of more effective and certainly more affordable solutions. BERT STECH’s new water business is dedicated to developing new technologies that remove harmful contaminants such as PFAS or forever chemicals from portable water and industrial applications.

These strategic and highly complementary technologies leverage our industry leading expertise in activated carbons and underscores our commitment to addressing critical environmental issues through affordable and sustainable innovation. Last year to better reflect our diversified technology portfolio and our mission we rebranded as Burch Tech Corp with a new ticker BCHT. This rebranding aligns with our dedication to providing substantial and effective solutions for both air and water purification and reinforces our role as a leader in environmental technologies. Now turning to the second quarter results. Birch Tech’s air business drove healthy revenues of $3,300,000 with a strong 29.8% gross margin profile.

We also believe that The US coal industry has stabilized. And based on recent directives from the new administration could have the potential to increase due to the recent federal support for clean coal that ensures a longer operational runway for our core air quality business. On 04/08/2025, US EPA and President Donald J. Trump proclaimed their proclamation granted a two year exemption to certain coal fired power plants from compliance with the updated mercury air toxic standards introduced under the Biden Administration Clean Power Plan two point zero in 2024. Now this action allows 47 major coal plant owners, operators and more than 60 plants vital to maintaining grid stability to remain online through at least 2029 without being burdened by recent introduced regulatory add ons.

These plants have operated for approximately ten years under the original MAT’s formula contributing to improved air quality nationwide. And numerous BridgeTac customers were included in those who received exemptions to the Biden administration’s MAT’s Clean Power two point zero. They may be able to extend their operations to at least twenty twenty nine. We fully support this effort by the current administration as empowering American Clean Bowl and keeping these plants online. Our technologies continue to offer coal plants the best most effective process to produce maximum power while maintaining a true clean coal approach and power generation with the elimination of mercury emissions.

Now the strong validation of our patent rights for major industry leaders which included significant settlements in late twenty twenty three and the unanimous jury verdict in early twenty twenty four with a final judgment expected in the very near term has supported our steadfast protection of our innovative core technologies. We have continued these efforts in support of our company’s growth and to the benefit of our shareholders. During 2024 and early twenty twenty five, we filed a number of additional patent infringement lawsuits in various U. S. District courts against multiple power utilities and related entities.

Since our litigation efforts commenced in 2019, our primary objective has been to enter into positive mutually beneficial business relationships across the industry. And we have been successful with many of our previous defendants reaching license and or supply agreements for the continued use of our highly efficient technologies for mercury emissions capture. Now to that end, in January we secured a nonexclusive agreement with a second coal fired power utility named as a defendant in the company’s lawsuit filed in Arizona which was previously announced on 07/30/2024. Due to confidentiality agreements and ongoing litigations, the specific terms and cash infusion of this agreement cannot be publicly disclosed. We’re happy to have reached a positive business outcome with its utility which has and will continue to benefit from our patented technologies for years to come.

Our outreach across the industry to secure similar business agreements continues. We have ongoing discussions with defendants named in our recent lawsuits. We expect significant upside potential from our successful post trial outreach program converting adopters of our core technologies to licensees and or supply customers. From 2020 until close of Q2, we’ve obtained 10 new license agreements with coal fired power utilities with several who converted to direct product supply customers as well. Now looking ahead, given these tailwinds and the current administration support of coal fired generation, we believe that we’re well positioned to grow our air business revenue to at least $18,000,000 in 2025 and an annual run rate potential of $40,000,000 by the 2026.

We launched our water business with the opening of two new testing laboratory what we call design centers that are located in Grand Forks, North Dakota And State College, Pennsylvania. In these centers led by nationally recognized experts we are now offering a full service solution for water utilities to deploy smarter, more affordable activated carbon technologies in support of US EPA’s forthcoming PFAS regulations and to help utilities meet their ongoing purification needs today. In 2024 the EPA released an estimated $1,000,000,000 annual cost over the next five years for U. S. Portable water utilities to meet the recent PFAS regulations.

This is all further buoyed by recent news of the EPA to implement a series of actions aimed at preventing PFAS from entering drinking water systems showcasing clear support from the Trump administration to this important issue. And even with our strong regulatory tailwind aside, water utilities are currently facing high expense in remediation costs, underlined by a lack of supply alternatives and rising raw material costs, largely from increased demand for activated carbons. The launch of our two new design centers is a significant component in our go to market strategy and in addressing the critical concern of affordability in contaminant removal faced by these water utilities. These centers and the industry leading capabilities they will provide are the culmination of a significant investment on our part of expertise and resources that form the foundation of our water division’s entrance in clean water technologies for contaminant removal. And we are focused on forever chemicals and harmful contaminants from the drinking water.

In time, we’re evaluating both M and A and Greenfield opportunities to obtain a large scale production facility for virgin and reactivated carbons as well as entering the reactivation industry itself. Now looking ahead for our air business we expect an accelerated pace of revenue driven by new customers and license fees, strong positive momentum from our current customers under contract and multiple opportunities to scale. Growth is further supported by the stable U. S. Coal power market with increased energy demands for coal power coming out of Washington and stringent state and federal regulations for emissions control.

Supported by these tailwinds as noted earlier, our air business alone has the potential to achieve an annualized run rate of at least 40,000,000 by the 2026. And that would come by converting our present customer market share from approximately 15 to over 30% by bringing those utilities that are using our technologies independently under licenses or supply agreements through our legal activities. For our water business, alongside the sale of traditional virgin and eventually reactivated carbons, we are focused on developing a potentially superior technology offering this offering is expected to be completed in the second half of this year and commercially available in 2026. Looking ahead to this year, given the timing shift as legal proceedings and prospective customer existing contract expiration timeframes continue to extend And an unfortunate fact of life when working with the court system which I no way believe changes our eventual outcome, we expect revenues at least $18,000,000 in 2025 excluding any revenue from judgments in defense of our IP, as well as potential revenues from our water business. So I’m incredibly proud of our team’s accomplishments and believe there is significant value add potential to come for our shareholders as we expand into the water business.

With that, I’d like to turn the call over to Fiona Fitzmaurice, our Chief Financial Officer to walk through some key financial details from the 2025. Fiona?

Fiona Fitzmaurice, Chief Financial Officer, BurgeTech Corp: Thank you Rick. I will constrain my section to a concise review of the financial results for the second quarter. For a full breakdown of our financial results please view our regulatory filings. Revenues totaled $3,300,000 in the second quarter as compared to $3,400,000 in the same year ago quarter. The decrease in revenues from the prior year was primarily due to the mix of plants running unexpected customer forced outages and products sold.

Gross profit decreased 8.7% to 1,000,000 or 29.8% of total revenues in the 2025, as compared to $1,100,000 or 31.6% of total revenues in the same year ago quarter. The change in gross margin was primarily attributable to decreased revenues in the second quarter. Operating expenses consisted of selling, general and administrative expenses, and research and development expenses in 2025 and SG and A in 2024. SG and A expenses were approximately $1,700,000 and $4,600,000 for the three months ended June 3025 and 2024 respectively. Total SG and A expenses decreased in the 2025 compared to the prior year period as a result of variances in individual categories.

Total R and D expenses were approximately $500,000 and nil for the three months ended 06/30/2025 and 2024 respectively. R and D expenses related to research conducted to develop water treatment products utilizing new sorbent technologies and increased in the 2025 compared to the prior year period as the company had not incurred any research related costs during the year ago quarter. Net loss for the 2025 improved to 1,500,000.0 or negative 2¢ per basic and diluted share as compared to a net loss of 6,200,000.0 or negative 7¢ per basic and diluted share in the same year ago quarter. Adjusted EBITDA, a non GAAP measure totaled negative $1,000,000 in the 2025 as compared to negative $3,300,000 in the same year ago quarter. Cash as of 06/30/2025 totaled $1,500,000 with no debt as compared to $3,500,000 with no debt as of 12/31/2024.

I’d also like to briefly discuss the classification of our project share liability as current liability on our balance sheet. This is a non recourse liability that will not be repaid from cash on hand and is only to be paid from mitigation proceeds, including any potential future proceeds of our $57,000,000 patent infringement verdict from which we requested $160,000,000 from the court inclusive of enhancements, interest, legal fees and other items. Under GAAP accounting rules the profit share liability is classified as a current liability as the company expects the proceeds from this project are likely to be received and the profit share from those proceeds repaid over the next twelve months. So, ironically, the positive news of us believing receipt of these funds is likely over the next twelve months causes the profit share to be classified as a current liability, while at the same time not allowing us to reflect in our current financial statements the expected revenue from the judgment. This completes my prepared comments.

Now, before we begin our questioning and mid answer session, I’d like to turn the call back to Rick for some closing remarks. Rick?

Richard McPherson, President and CEO, BurgeTech Corp: Thank you Fiona. Looking ahead our focus is to protect the validity of our patents in clean air technologies laying the foundation for our strategic growth into highly innovative water purification technologies which we currently have under development. For our core air business we expect an accelerated pace of revenue growth, continued IP wins and associated cash receipts and strong positive momentum from our current customers under contract. For our new water business we see multiple opportunities to scale as we work to launch in the near term and build the infrastructure to support the future of this business. Taken together we’re on a robust growth trajectory and I believe are poised to create sustainable long term value for my fellow shareholders for years to come.

We are on track with the necessary parties engaged to move forward with our plan up listing to a major U. S. Exchange in the 2025. And with that operator, let’s open the line for questions.

Conference Operator: Thank you, sir. We will now begin the question and answer session for telephone participants. If you have a question, please press the star followed by the one on your touch tone phone. If you would like to withdraw your question, please press the star followed by the two. Again, that is the star followed by the one if you have a question.

If you are using speaker equipment, you will need to lift the handset before making a selection. I will now pause as we assemble the queue. The first question comes from the line of Rob Brown from Lake Street Capital. Please go ahead.

Rob Brown, Analyst, Lake Street Capital: Good afternoon. First question is on the change in the MATS regulations. Just wanted to get a sense from you on what that sort of means for your business. Assume it means it extends the ultimate duration of the air business. But does it also step up some of the revenue run rates, or is it really a duration of the current customer base?

Richard McPherson, President and CEO, BurgeTech Corp: Just to establish that the current match would stay status quo And the new regulations that President Biden had proposed have been pushed off a number of years. What that means to us as an operating company is that a number of plans, including a number of our clients that we’re looking at possible closures have forgone those closures. They won’t be closing. And indeed even some of the plants that had recently closed are now considering reopening. So, with the lessening of those additional what we call two point zero match regulations.

By those going away, it’s actually improved the outlook for about 47 different power plant operators.

Rob Brown, Analyst, Lake Street Capital: Okay, thank you. And then on the kind of the group of remaining plants that are potential licensees and commercial customers, I think you said that was sort of a market share increase that you could see and give some numbers on the ultimate run rates there. But is that sort of fully the potential available market there or are there further opportunities within that group that maybe could grow that revenue level as well?

Richard McPherson, President and CEO, BurgeTech Corp: No, that’s what I would expect to be a reasonable estimate of the growth potential. There are some others but they’re not significant in size. And so, what we’re referring to here is the folks that are now defending themselves against the claims we’ve made. Should we be successful as we expect, then the potential additional business that could come from those accounts through a legal win would generate that additional revenue that we expect. And I think beyond that would be a stretch.

Rob Brown, Analyst, Lake Street Capital: Okay, great. Good. And then kind of switching to the water business ramp. I think you said commercial availability in ’26 and with the design centers in place that you’re on track for that. What’s sort of the launching of how does that progress?

Do you have customers working in the design centers this year and then they start to ramp kind of order activity next year? What’s just the sort of cadence there of the launch work on that business?

Richard McPherson, President and CEO, BurgeTech Corp: Yeah. So we’re starting now and are engaged with water utilities in testing their water and providing our services and know how for them to be able to make the best choices as to how they’re going to meet the new regulations. We’re also working with them how to improve their present operations before those regulations come in. But on a parallel track, we are moving forward to develop a couple of significant facilities of our own. And we hope to bring material news to the market on that in the coming months.

We would expect that we would be able to make significant inroads in as a key operator in the water business by the ’26. And we are also at this point expecting to be able to generate real water revenues from the water market this year as well. So it’s a combination of building the relationships in the utility business through our research and design centers, but simultaneously with our newly acquired sales force selling various products into the water market as well and thereby establishing solid customer relationships with a number of different utilities. And that will begin has begun and will be reported in the latter half of this year.

Rob Brown, Analyst, Lake Street Capital: Great, thank you. And I guess last question here quickly on the EPA. You talked briefly about how they were still quite active Are there sort of new regulations they’re developing or are they really enforcing the existing thinking and now that there’s technologies available that they’re really being more active in insisting that those are deployed?

Richard McPherson, President and CEO, BurgeTech Corp: I don’t see that they’re being more active. I think that what they’ve done is maybe put the brakes on a little bit with regards to the actual timing of implementation of the final regulations in order to be able to make sure that the regulations are affordable and reasonable in their attainment. And that’s really driven our approach to the market by and that’s why we’ve stepped back two steps built out the analytical and design center side of our business so that we’d be able to create and work with utilities and EPA to be able to create new more effective approaches to purifying water, PFOPFOS and bringing a more affordable route to the market, which is what our plan is, what our expectation to be able to do is. And I think as we get into the coming months, as our strategy is laid out to the market and people see what we’re trying to do, think we should be or could be very successful in that effort. And I think that’s really what the EPA is trying to do is not only have the utilities meet these regulations and have a better water supply, but to do so in a reasonable fashion that keeps the cost down and makes it effective and available not just to the major cities, but to the thousands of small communities around the country.

And we’re focused on that broader reach and appeal for the country.

Rob Brown, Analyst, Lake Street Capital: Okay, thank you. That’s very helpful. I’ll turn it over.

Richard McPherson, President and CEO, BurgeTech Corp: Thank you.

Conference Operator: Thank you. Ladies and gentlemen, this concludes our question and answer session. I will now hand the call back to Chairman and CEO, Richard MacPherson for his closing remarks.

Richard McPherson, President and CEO, BurgeTech Corp: Well, folks, I want to thank you very much for joining us today. As we move forward with our efforts to join a main exchange this year, of which the attorneys have been hired to see that project through in the 2025. That will come on the heels of some very significant growth announcements from us starting in September. And we’ll be following through with growth announcements on not just the air side, but the water side. There’s been a lot going on in the firm that is coming to fruition in the 2025.

And I very much look forward to bringing the news to the community as we go forward. And we’ll be doing so on a timely basis. So thank you very much. I very much appreciate your interest. And we’ll be back bringing our updated story to the market starting in September.

Thank you.

Conference Operator: Thank you. Ladies and gentlemen, this does conclude today’s teleconference. Thank you for your participation. You may now disconnect your lines.

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