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Aqua Metals, Inc. (AQMS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was pre-revenue and operationally focused; net loss was $8.32M with diluted EPS of $(1.03), driven primarily by a $5.25M noncash impairment tied to the strategic decision to sell the Sierra ARC property .
  • Aqua Metals announced the planned sale of the Sierra ARC site to retire all debt, add cash proceeds, and lower holding costs by approximately $100,000 per month; management reiterated commitment to first commercial ARC via co-location and partner-led paths that reduce CAPEX/OPEX .
  • Technology advances highlighted: initial samples of nickel carbonate and MHP produced; bench-scale LFP recovery demonstrated, with the process blending 50% NMC/50% LFP to effectively double lithium carbonate output potential, enhancing economic viability at scale .
  • CFO transition: Judd Merrill stepped down May 16 (consulting through August); Eric West appointed CFO May 19, aiming to strengthen finance/operations alignment during commercialization and financing efforts .
  • Near-term catalysts: closing of the Sierra ARC sale (management expects completion in Q2 2025), any binding feedstock/offtake partnerships, and clarity on government support; these could materially impact liquidity, execution runway, and investor sentiment .

What Went Well and What Went Wrong

What Went Well

  • Product platform expansion and commercialization readiness: “Produced initial samples of nickel carbonate and mixed hydroxide precipitate (MHP) aligned with potential downstream partners’ requirements,” unlocking new revenue opportunities and meeting battery-grade precursor specs .
  • LFP recycling breakthrough: “Our process can take 50% NMC input and 50% LFP input and effectively double lithium carbonate output, improving the economic model,” positioning AQMS to address the fastest-growing battery chemistry .
  • Strategic capital discipline: Sale of Sierra ARC intended to retire debt and reduce monthly holding costs by ~$100,000, adding meaningful cash runway to pursue co-location/partner-based commercialization with lower CAPEX/OPEX .

What Went Wrong

  • Noncash impairment weighed on results: ~$5.25M impairment recognized in Q1 tied to the strategic shift away from the existing facility plan; net loss increased YoY largely due to this charge .
  • Cash decline and burn: Cash ended Q1 at $1.59M; management cited base cash burn of ~$500,000/month, emphasizing urgency of financing and asset actions (ATM usage, equipment/real estate disposition) .
  • Policy and commodity headwinds: Management cited suppressed lithium prices and uncertain government funding timelines; industry consolidation and partnership formation are in focus while awaiting clarity from agencies (DOE/DOD) and evolving trade/tariff dynamics .

Financial Results

P&L summary (USD Millions)

MetricQ1 2024Q3 2024Q1 2025
Net Loss ($)$(5.75) $(5.21) $(8.32)
Diluted EPS ($)$(1.05) $(0.76) $(1.03)
Total Operating Expense ($)$5.79 $5.21 $8.68
Plant Operations ($)$2.21 $1.62 $0.72
Research & Development ($)$0.59 $0.40 $0.34
Impairment Expense ($)$0.00 $0.00 $5.25
General & Administrative ($)$3.00 $2.75 $2.38

Notes:

  • Q1 2025 “Other income, net” was $0.37M (interest expense $(0.40)M; interest/other income $0.28M; change in fair value of warrants $0.49M) .
  • No revenue recognized was disclosed in Q3 2024 (product sales $0) and Q1/Q1 comparative tables omit a revenue line, indicating no recognized product sales in these periods .

Liquidity and Equity (USD Millions)

MetricQ3 2024Q4 2024Q1 2025
Cash & Equivalents ($)$2.95 $4.08 $1.59
Stockholders’ Equity ($)$20.90 $16.24 $9.53

Estimates vs Actuals (Wall Street consensus via S&P Global)

MetricQ1 2025 EstimateQ1 2025 Actual
Revenue ($)N/A (Consensus unavailable via S&P Global)N/A (no revenue recognized)
EPS ($)N/A (Consensus unavailable via S&P Global)$(1.03)

Note: Consensus estimates were unavailable in S&P Global for AQMS in Q1 2025; therefore, no beat/miss determination is possible.

KPIs/Operating Metrics

KPIStatus/ValueSource
Nickel Carbonate/MHP samplesInitial samples produced for partner specs
LFP recycling capabilityBench-scale complete; 50/50 NMC/LFP blend effectively doubles lithium carbonate output potential
Battery-grade lithium carbonate (purity)>99.5% battery-grade demonstrated at pilot; 600+ lbs produced during Dec 2024 for validation
Sierra ARC propertySale initiated; intended to retire all debt, add cash, reduce holding costs by ~$0.10M/month

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue2025None providedNone providedMaintained (no formal guidance)
Margins/EBITDA2025None providedNone providedMaintained (no formal guidance)
OpExNear termNot explicitly guidedCost discipline; plant ops down YoY via workforce reductions; holding cost reductions expected post saleImplicit improvement
Financing2025Seeking project/debt financingPursuing co-location, licensing/JV; strategic partners; asset sale to retire debt and extend runwayStrategy evolved
Tax/Dividends2025None providedNone providedMaintained (no formal guidance)

Earnings Call Themes & Trends

TopicPrior Mentions (Q3 2024)Prior Mentions (Q4 2024)Current Period (Q1 2025)Trend
Commercialization pathCommissioning Sierra ARC 2–3 quarters post-financing; active term sheets; 3k→10k tonnes plan Flexible models: co-location, tolling, licensing; financing with improved plant economics Pivot to sell Sierra ARC; co-location focus; still committed to first ARC; partner-led approach Shift to lower CAPEX/OPEX, partner-centric
Product suite (LC/MHP)Battery-grade LC >99.5%; 24-hour pilot ops; offtaker sampling Prioritizing LC and MHP for higher margin/throughput Nickel carbonate & MHP samples produced; purity refinements ongoing Execution progress
LFP recoveryLimited prior detail–Bench-scale LFP recovery with 50/50 NMC/LFP blend doubling LC output potential New emphasis; positive
FinancingTerm sheets; strategic capital needed Project/debt finance focus; enhanced economics; insider support Near-term: asset sale, ATM; long-term: debt/project finance; partnerships Active; multi-pronged
Government/policyDOE/DoD/EPA visits; grants possible; not selected in latest round ACME-REVIVE selection; state tax abatement; executive order urgency noted Ongoing agency engagement; timeline still uncertain; tariff/macro reshaping domestic demand Watching policy tailwinds
Cost disciplineBase monthly cash needs $0.5–$0.6M; RIF in Aug-24 Lower 2025 expenses expected; impairment of deposits Plant ops down ~67% YoY; holding costs to fall post sale; impairment in Q1 Improving base burn

Management Commentary

  • “We’re building what we believe to be the most adaptable, forward-looking battery recycling platform in the country…preparing to meet demand with flexible, high-performance solutions.” — Steve Cotton, CEO .
  • “Our process can handle a blend of 50% NMC and 50% LFP input, effectively doubling our lithium carbonate output and improving project economics.” — Steve Cotton, CEO .
  • “The Sierra ARC sale…retire all debt, generate meaningful cash reserves and reduce holding costs by approximately $100,000 per month.” — Steve Cotton, CEO .
  • “Plant operations decreased…67.2%…driven by workforce reductions…and lower professional fees and materials/overhead.” — Judd Merrill, CFO .
  • “We remain fully committed to building our first commercial ARC…actively engaged with supply, offtake and funding partners to determine the best path forward.” — Steve Cotton, CEO .

Q&A Highlights

  • Sierra ARC sale economics/runway: Company owes ~$3M; sale proceeds expected to exceed debt and extend runway; base burn around ~$500k/month; innovation center operations continue .
  • Customer inbounds and macro impacts: Tariff/public policy uncertainty and low lithium prices spur consolidation; partnerships across large/medium/small players increasing markedly .
  • Partner testing and time-to-revenue: Samples being tested by potential offtakers; co-location/brownfield options could accelerate commissioning; AQMS can enable partners via licensing/JVs .
  • Financing clarity: Near-term focus on debt retirement via sale and judicious ATM; long-term project/debt financing aligned with feedstock/offtake to make ARC bankable .
  • Government engagement: Active with DOD/DOE; expecting clarity in coming months; aligned with domestic supply chain goals .

Estimates Context

  • S&P Global consensus EPS and revenue estimates for AQMS Q1 2025 were unavailable; as such, a beat/miss assessment cannot be made against Wall Street consensus. Actual Q1 2025 EPS was $(1.03); no product sales were recognized .
  • Forward estimate revisions likely hinge on closure of Sierra ARC sale, visibility on co-location or licensing deals, and any binding offtake/feedstock agreements; absent these, near-term models may continue to assume pre-revenue with negative EPS.

Key Takeaways for Investors

  • Strategic pivot reduces leverage and fixed costs: The planned Sierra ARC sale retires all debt and cuts ~$0.10M/month in holding costs, extending runway for commercialization via co-location/licensing .
  • Commercial pipeline credibility: Nickel carbonate/MHP samples and battery-grade LC validation underpin offtake discussions; LFP capability broadens addressable feedstock and doubles LC output potential at scale .
  • Cost actions visible in P&L: Plant operations down ~67% YoY; however, Q1 loss reflects a one-time ~$5.25M impairment; base burn remains ~$0.5M/month until asset sale closes .
  • Financing roadmap: Near-term liquidity actions (asset sale, ATM) plus long-term project/debt financing tied to feedstock/offtake; watch for binding agreements to de-risk execution .
  • Policy tailwinds potential: DOE/DOD engagement and domestic-sourcing push could support ARC economics and partner demand; timeline remains uncertain, but sector consolidation increases chances of strategic partnerships .
  • Trading implications: Stock may react to discrete catalysts—property sale closing, CFO transition completion, any announced offtake/feedstock deals, or government support; conversely, delays in financing or policy clarity could pressure shares .
  • Medium-term thesis: If AQMS converts its validated technology and partner interest into bankable ARC build(s) via co-location/licensing, its low-waste, lower-cost AquaRefining platform and LFP adaptability could yield attractive plant-level EBITDA even in subdued commodity price environments .