Quest Resource Shows Recovery Signs Amid Difficult Market, Wins QSR Client

IRVING, TX – May 07, 2026 – Quest Resource Holding Corporation (Nasdaq: QRHC) today announced first-quarter financial results that paint a picture of a company navigating a challenging economic landscape through disciplined operational control and strategic new business. While year-over-year figures reflect persistent market headwinds, the environmental services provider demonstrated notable sequential growth and announced a significant new client win in the quick-service restaurant (QSR) industry, suggesting its turnaround strategy is gaining traction.

Quest reported Q1 2026 revenue of $61.7 million. While this represents a 9.8% decrease from the same period in 2025, it marks a 4.8% increase from the fourth quarter of 2025. This sequential uptick, driven by higher volumes from industrial customers and growth in its non-industrial portfolio, signals a potential stabilization after a difficult fiscal year 2025, which saw revenue decline by over 13%.

A Quarter of Contrasting Performance

The duality of Quest's performance is evident across its key metrics. Gross profit for the quarter was $9.7 million, up 6.1% sequentially from Q4 2025, but down 11.6% from the $10.9 million reported in Q1 2025. The company's gross margin improved slightly to 15.7% from 15.5% in the prior quarter, inching closer to the 16.0% margin from a year ago.

"Throughout the first quarter, we experienced steady improvement, which is consistent with the seasonal acceleration,” said Perry W. Moss, Quest’s Chief Executive Officer. He noted that new customer wins and expanded business with existing clients secured in late 2025 are now fully onboarded and contributing to the results.

On the bottom line, Quest reported a GAAP net loss of $2.3 million. This is a significant improvement from the $10.4 million loss in Q1 2025, a period burdened by a $4.4 million loss on asset sales and a $1.7 million impairment charge. However, the loss widened slightly from the $1.7 million reported in the fourth quarter of 2025. Adjusted EBITDA, a non-GAAP measure of operating performance, was $1.8 million, up from $1.6 million year-over-year but down from $2.1 million in the previous quarter, a dip partly attributable to a sequential increase in administrative expenses as bonus accruals resumed.

Fortifying the Financials Through Discipline

In what management calls a "difficult operating environment," Quest has turned its focus inward, executing a strategy centered on financial discipline. A standout achievement in the quarter was a roughly 26% year-over-year reduction in Selling, General, and Administrative (SG&A) expenses, a cut of approximately $3 million that came in below the company's own guidance.

This cost control is coupled with proactive balance sheet management. In March, Quest refinanced its asset-based lending (ABL) facility, entering a new $40 million agreement with Texas Capital Bank. The company immediately put the new facility to strategic use.

"The recent refinancing of our ABL credit facility allowed us to immediately swap $2.0 million of term debt for ABL debt, reducing our interest expense, which we expect will free up additional cash to allocate toward additional debt paydown," explained Brett Johnston, Quest’s Chief Financial Officer. At the end of the quarter, net notes payable stood at $63.4 million after the prepayment.

Johnston emphasized the company's multi-pronged financial strategy: "Our financial strategy remains focused on managing our cost structure, leveraging our Operational Excellence initiatives to drive cash flow, and paying down debt." These measures, he added, are designed to improve the company's cash cycle and strengthen its balance sheet, providing crucial flexibility as it navigates market uncertainties.

Tapping into the Green Economy's New Frontiers

While internal controls shore up the company's foundation, Quest's growth strategy is focused on tapping into burgeoning demand for sustainability services. The most significant recent development is the addition of a large franchisee in the quick-service restaurant industry, which was secured in April and launched in May.

This win is particularly timely. The QSR sector is under increasing pressure from consumers, investors, and regulators to adopt more sustainable practices. Major chains are setting ambitious goals for waste reduction, sustainable packaging, and energy efficiency, creating a substantial market for specialized environmental service providers like Quest. By helping large businesses manage complex waste streams and providing data-driven insights, Quest positions itself as a key partner in corporate ESG (Environmental, Social, and Governance) initiatives.

This expansion aligns with broader trends in the environmental services market, where a shift towards a circular economy and heightened corporate responsibility are fueling demand. While industry giants like Waste Management and Republic Services continue to post strong growth, Quest is carving out a niche by offering tailored, data-rich solutions to multi-location businesses.

Despite the positive signs, CEO Perry W. Moss remains pragmatic. “Our sales pipeline also remains healthy as we continue to advance meaningful opportunities for both new sales and wallet share expansions," he stated. "Overall, the operating environment remains difficult, though we are cautiously optimistic given improvements achieved in the quarter, and we remain acutely focused on elements within our control.”