Hudson's Q3 Net Income Jumps 58% on Strong Revenue Growth

TL;DR

**HDSN's Q3 numbers are hot, showing strong growth and smart plays in the HFC phase-down, making it a solid long-term bet.**

AI Summary

Hudson Technologies Inc. reported a significant increase in net income for the three months ended September 30, 2025, reaching $12.374 million, up from $7.806 million in the same period of 2024, representing a 58.5% increase. Revenues also saw a healthy rise, climbing to $74.012 million from $61.943 million year-over-year, a 19.5% increase. However, for the nine months ended September 30, 2025, net income slightly decreased to $25.300 million from $26.953 million in 2024, and revenues remained relatively flat at $202.204 million compared to $202.475 million. The company's cash and cash equivalents increased to $89.681 million as of September 30, 2025, from $70.134 million at December 31, 2024. Key business changes include the June 2024 acquisition of USA Refrigerants for approximately $20.7 million, aimed at expanding customer networks and refrigerant reclamation capabilities. Risks include reliance on the United States Defense Logistics Agency (DLA) for a significant portion of revenue ($30.2 million for the nine months ended September 30, 2025) and the ongoing impact of the AIM Act's HFC phase-down, though reclamation is unrestricted. The strategic outlook emphasizes reclamation as critical for maintaining HFC supply levels and supporting the transition to lower GWP systems.

Why It Matters

Hudson's strong Q3 performance, particularly the 58.5% net income surge, signals effective navigation of the evolving refrigerant market, driven by the AIM Act. This growth, coupled with the strategic USA Refrigerants acquisition, positions Hudson to capitalize on increased demand for reclaimed refrigerants, a critical component as virgin HFCs are phased down. For investors, this indicates potential for continued profitability in a niche but essential industry. Employees and customers benefit from a stable, growing company providing environmentally sustainable solutions. Competitively, Hudson's focus on reclamation strengthens its market position against peers reliant on virgin HFCs, especially with the EPA's new Refrigerant Management Rule mandating reclaimed HFCs for certain applications.

Risk Assessment

Risk Level: medium — The company faces a medium risk level due to its significant reliance on a single customer, the United States Defense Logistics Agency (DLA), which accounted for $30.2 million in revenue for the nine months ended September 30, 2025, and $6.2 million in accounts receivable. Additionally, while the AIM Act presents opportunities, the ongoing regulatory changes and the need to secure future HFC consumption allowances (Hudson received only ~1% of total allowances for 2023 and 2024) introduce uncertainty.

Analyst Insight

Investors should consider Hudson Technologies as a potential long-term hold, given its strategic positioning in the growing refrigerant reclamation market. Monitor future EPA allowance allocations and the company's ability to diversify its customer base beyond the DLA to mitigate concentration risk.

Financial Highlights

debt To Equity

0.27

revenue

$74.012M

operating Margin

18.86%

total Assets

$338.946M

total Debt

$73.057M

net Income

$12.374M

gross Margin

31.98%

cash Position

$89.681M

revenue Growth

+19.5%

Revenue Breakdown

Key Numbers

• $74.012M — Q3 2025 Revenues (Increased from $61.943M in Q3 2024, a 19.5% rise.)
• $12.374M — Q3 2025 Net Income (Increased from $7.806M in Q3 2024, a 58.5% rise.)
• $202.204M — Nine Months 2025 Revenues (Slight decrease from $202.475M in Nine Months 2024.)
• $25.300M — Nine Months 2025 Net Income (Decreased from $26.953M in Nine Months 2024.)
• $89.681M — Cash and Cash Equivalents (As of September 30, 2025, up from $70.134M at December 31, 2024.)
• $20.7M — USA Refrigerants Acquisition Cost (Paid in cash on June 6, 2024.)
• 43,598,202 — Common Shares Outstanding (As of October 20, 2025, down from 44,284,374 at December 31, 2024.)
• $30.2M — Revenue from DLA (For the nine months ended September 30, 2025, representing a significant customer concentration.)

Key Players & Entities

• HUDSON TECHNOLOGIES INC /NY (company) — registrant
• USA United Suppliers of America, Inc. (company) — acquired company
• B&B Jobber Services, Inc. (company) — acquired company
• United States Environmental Protection Agency (regulator) — regulates HFCs under AIM Act
• United States Defense Logistics Agency (company) — principal customer
• NASDAQ Capital Market (market) — exchange for common stock
• American Innovation and Manufacturing Act (regulator) — legislation impacting HFCs
• Hudson Technologies Company (company) — wholly-owned subsidiary

FAQ

Risk Factors

• Customer Concentration with DLA [high — financial]: The company relies significantly on the United States Defense Logistics Agency (DLA), which accounted for $30.2 million in revenue for the nine months ended September 30, 2025. This concentration poses a risk if DLA's demand or contract status changes.
• AIM Act HFC Phase-Down [medium — regulatory]: The company operates within an industry impacted by the AIM Act's phase-down of hydrofluorocarbons (HFCs). While refrigerant reclamation is unrestricted and benefits from this trend, changes in regulations or market acceptance of alternatives could affect demand for certain services.
• Integration of USA Refrigerants Acquisition [medium — operational]: The successful integration of the USA Refrigerants acquisition, completed in June 2024 for $20.7 million, is crucial for expanding customer networks and reclamation capabilities. Any operational challenges or failure to realize synergies could impact future performance.

Industry Context

Hudson Technologies operates in the refrigerant services sector, a critical component of the HVACR (Heating, Ventilation, Air Conditioning, and Refrigeration) industry. The sector is undergoing a significant transition driven by environmental regulations like the AIM Act, which mandates a phase-down of high Global Warming Potential (GWP) hydrofluorocarbons (HFCs). This shift creates a growing demand for refrigerant reclamation and recycling services as companies seek sustainable ways to manage existing refrigerant inventories and comply with regulations.

Regulatory Implications

The company is directly influenced by the AIM Act's HFC phase-down, which restricts the supply of new HFCs. While this creates a tailwind for Hudson's reclamation business, which is not restricted, any changes in regulatory enforcement or the pace of transition to lower-GWP alternatives could impact its long-term strategy.

What Investors Should Do

1. Monitor DLA contract status and revenue contribution.
2. Assess the impact of the USA Refrigerants acquisition.
3. Evaluate the company's ability to capitalize on HFC phase-down.
4. Analyze year-over-year trends beyond Q3.

Key Dates

• 2025-09-30: End of Q3 2025 — Reported $12.374M net income on $74.012M revenue, showing strong quarterly performance.
• 2025-09-30: Nine Months Ended Q3 2025 — Revenues flat at $202.204M, net income decreased to $25.300M, indicating a weaker year-to-date trend compared to Q3.
• 2025-09-30: Cash and Cash Equivalents — Increased to $89.681M, providing strong liquidity.
• 2024-06-06: Acquisition of USA Refrigerants — Acquired for $20.7 million to expand customer networks and refrigerant reclamation capabilities.
• 2025-10-20: Common Shares Outstanding — Decreased to 43,598,202 from 44,284,374 at year-end 2024, potentially indicating share repurchases.

Glossary

Reclamation

The process of recovering used refrigerants, purifying them to meet industry standards, and making them available for reuse. (A core business activity for Hudson, which is unrestricted by HFC phase-down regulations and supports environmental sustainability.)

AIM Act

The American Innovation and Manufacturing Act, which directs the EPA to phase down the production and consumption of hydrofluorocarbons (HFCs). (This regulation impacts the refrigerant industry, creating opportunities for reclamation services like Hudson's as virgin HFCs become scarcer.)

GWP

Global Warming Potential, a measure of how much heat a greenhouse gas traps in the atmosphere. (The industry is transitioning to lower GWP refrigerants, and Hudson's reclamation services play a role in managing the supply of existing HFCs during this transition.)

DLA

Defense Logistics Agency, a U.S. government agency responsible for providing logistical support to the U.S. military. (A significant customer for Hudson, representing a substantial portion of its revenue, which introduces customer concentration risk.)

Year-Over-Year Comparison

Compared to the prior year's nine-month period, Hudson Technologies reported flat revenues of $202.204 million versus $202.475 million, and a decrease in net income to $25.300 million from $26.953 million. However, the most recent quarter (Q3 2025) demonstrated a significant rebound with revenues up 19.5% to $74.012 million and net income soaring 58.5% to $12.374 million, suggesting a positive recent operational trend. Cash reserves have strengthened considerably, increasing from $70.134 million at year-end 2024 to $89.681 million as of September 30, 2025.

Key Financial Figures

• $0.01 — nge on which registered Common stock, $0.01 par value HDSN NASDAQ Capital Marke

Filing Documents

• hdsn-20250930x10q.htm (10-Q) — 1433KB
• hdsn-20250930xex31d1.htm (EX-31.1) — 12KB
• hdsn-20250930xex31d2.htm (EX-31.2) — 12KB
• hdsn-20250930xex32d1.htm (EX-32.1) — 6KB
• hdsn-20250930xex32d2.htm (EX-32.2) — 6KB
• 0001104659-25-108471.txt ( ) — 7059KB
• hdsn-20250930.xsd (EX-101.SCH) — 45KB
• hdsn-20250930_cal.xml (EX-101.CAL) — 56KB
• hdsn-20250930_def.xml (EX-101.DEF) — 176KB
• hdsn-20250930_lab.xml (EX-101.LAB) — 376KB
• hdsn-20250930_pre.xml (EX-101.PRE) — 312KB
• hdsn-20250930x10q_htm.xml (XML) — 1295KB

Signatures

Signatures 32 2 Table of Contents

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

- Financial Statements

Item 1 - Financial Statements Hudson Technologies, Inc. and Subsidiaries Consolidated Balance Sheets (Amounts in thousands, except for share and par value amounts) September 30, December 31, 2025 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 89,681 $ 70,134 Trade accounts receivable – net of allowance for credit losses of $ 977 and $ 1,079 , respectively 25,366 13,629 Inventories 97,414 96,247 Income tax receivable 4,284 6,284 Prepaid expenses and other current assets 17,614 9,218 Total current assets 234,359 195,512 Property, plant and equipment, less accumulated depreciation 22,781 21,554 Goodwill 62,280 62,280 Intangible assets, less accumulated amortization 11,632 14,100 Right of use asset 5,537 6,878 Other assets 2,357 2,328 Total Assets $ 338,946 $ 302,652 Liabilities and Stockholders' Equity Current liabilities: Trade accounts payable $ 19,994 $ 8,692 Accrued expenses and other current liabilities 42,202 33,813 Accrued payroll 1,837 3,704 Other short-term liabilities — 1,600 Total current liabilities 64,033 47,809 Deferred tax liability 5,536 4,076 Long-term lease liabilities 3,488 4,917 Total Liabilities 73,057 56,802 Commitments and contingencies Stockholders' equity: Preferred stock, shares authorized 5,000,000 : Series A Convertible preferred stock, $ 0.01 par value ($ 100 liquidation preference value); shares authorized 150,000 ; none issued or outstanding — — Common stock, $ 0.01 par value; shares authorized 100,000,000 ; issued and outstanding: 43,598,202 and 44,284,374 , respectively 436 443 Additional paid-in capital 105,538 110,792 Retained earnings 159,915 134,615 Total Stockholders' Equity 265,889 245,850 Total Liabilities and Stockholders' Equity $ 338,946 $ 302,652 See Accompanying Notes to the Consolidated Financial Statements. 3 Table of Contents Hu

Business

Business Hudson Technologies, Inc. ("Hudson" or the "Company"), incorporated under the laws of New York on January 11, 1991, is a refrigerant services company providing innovative solutions to recurring problems within the refrigeration industry. Hudson provides environmentally sustainable solutions from initial sale of refrigerant gas through recovery, reclamation and reuse, peak operating performance of equipment through energy efficiency and emergency air conditioning and refrigeration system repair, to final refrigerant disposal and carbon credit trading. The Company's operations consist of one reportable segment. The Company's products and services are primarily used in commercial air conditioning, industrial processing and refrigeration systems, and include refrigerant and industrial gas sales, refrigerant management services consisting primarily of reclamation of refrigerants and RefrigerantSide Services performed at a customer's site. RefrigerantSide Services consist of system decontamination to remove moisture, oils and other contaminants intended to restore systems to designed capacity. As a component of the Company's products and services, the Company also participates in the generation of carbon offset projects. The Company operates principally through its wholly-owned subsidiary, Hudson Technologies Company. Unless the context requires otherwise, references to the "Company", "Hudson", "we", "us", "our", or similar pronouns refer to Hudson Technologies, Inc. and its subsidiaries. In preparing the accompanying consolidated financial statements, and in accordance with Accounting Standards Codification ("ASC") 855-10 "Subsequent Events", the Company's management has evaluated subsequent events through the date that the financial statements were filed. The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial statements and with the instructions of Reg

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