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Earnings analysis · 10-Q

HDSN earnings analysis

Filed November 5, 2026 · Our reading of the company's report

The latest report

Hudson’s Q3 results weakened substantially, with revenue down 19.7% year over year, gross margin down 710 basis points to 24.9%, and diluted EPS declining to $0.05 from $0.27. Management cited a 9% volume decline, 17%…

Read full summary

Hudson’s Q3 results weakened substantially, with revenue down 19.7% year over year, gross margin down 710 basis points to 24.9%, and diluted EPS declining to $0.05 from $0.27. Management cited a 9% volume decline, 17% lower selling prices, muted customer demand and adequate channel inventories, while SG&A increased to $10.809 million. The DLA contract re-award and debt-free balance sheet are important positives, but operating cash flow fell to $4.193 million for the first nine months and refrigerant pricing pressure remains material.

Read the original on SEC.gov

Gross and operating margin

How much of each revenue dollar the business keeps.

26% Gross margin Operating margin May 2026 Nov 2026

One point per quarterly or annual filing. Both margins are shares of that report's revenue.

From revenue to operating profit

Where each $100 of revenue went in this report.

Of every $100 of revenue Cost of sales $75 Operating expenses $19 Left as operating profit $6

Cost of sales, operating expenses, and what remained. Figures are rounded to whole dollars.

How we read each report

Our analysis across the last few reports.

Read as bullish Read as bearish May 2026 Nov 2026

Our model's reading of each filing, not the share price or the market's reaction. Annual and quarterly reports each occupy one position.

Reported figures

Earnings per share
$0.05
Segment
Single reportable segment: total revenue of $59.422 million in Q3 2026, including Product and related sales of $57.487 million and RefrigerantSide Services revenue of $1.935 million.

What stood out

  • Revenue Declined on Volume and Pricing

    Q3 revenue fell to $59.422 million from $74.012 million, a 19.7% year-over-year decline and a 23.8% sequential decline from $78.0 million in Q2 2026. Management attributed the year-over-year decrease to a 9% volume decline and a 17% decline in selling prices.

  • Margins Compressed Materially

    Gross margin decreased to 24.9% from 32.0% in Q3 2025, while operating margin fell to 5.5% from 18.9%. Selling, general and administrative expense increased to $10.809 million from $8.883 million due to ERP investment, staffing and consulting.

  • Earnings Fell Sharply

    Diluted EPS declined to $0.05 from $0.27 in Q3 2025 and from $0.12 in Q2 2026. Net income was $2.040 million versus $12.374 million in the prior-year quarter.

  • DLA Contract Re-Awarded

    The DLA re-awarded Hudson a contract on August 4, 2026, with an initial term through August 4, 2031 and a five-year extension option through July 31, 2036. DLA revenue totaled $26.4 million for the first nine months of 2026.

  • Debt-Free Balance Sheet Maintained

    The company had $35.262 million of cash and no revolver borrowings at September 30, 2026, with approximately $37.8 million of borrowing availability. Working capital increased to $153.7 million from $146.2 million at December 31, 2025.

  • Cash Generation Deteriorated

    Nine-month operating cash flow declined to $4.193 million from $29.381 million, while capital expenditures were $2.125 million. Implied nine-month free cash flow was approximately $2.068 million, versus $25.439 million in the prior-year period.

What to watch

  • Refrigerant Pricing Pressure

    Lower pricing and demand remain the primary earnings risk: Q3 selling prices declined 17% year over year, revenue decreased to $59.422 million from $74.012 million, and gross margin fell to 24.9% from 32.0%.

  • Weak Cash Conversion and Working Capital

    Operating cash flow fell to $4.193 million from $29.381 million for the first nine months, while trade receivables increased $12.688 million to $29.786 million and inventory remained high at $131.513 million.

  • Customer and Refinancing Concentration

    DLA represented more than 10% of revenue, with $26.4 million of nine-month revenue and $5.1 million of receivables at September 30, 2026. The company also disclosed that its $40 million secured facility expires on March 2, 2027, creating refinancing and customer-concentration exposure.

Management's outlook

The 10-Q does not provide numeric revenue or EPS guidance. The prior outlook, as described in the October 28, 2026 earnings update, maintained full-year 2026 gross margin guidance in the low-to-mid-twenty-percent range; the filing states that future working-capital needs are expected to be met through operating cash flow and available credit-facility funds.

Earlier filings 2

10-Q · August 7, 2026

Hudson delivered Q2 revenue of $78.345 million, up 8% year over year and above the provided consensus estimate, but profitability weakened materially: gross margin fell to 26.4% from 31.3%, operating margin fell to 9.4%…

10-Q · May 11, 2026

Hudson Technologies reported Q1 2026 results with revenue of $60.2 million, up 9% year-over-year, and EPS of $0.01, below the analyst estimate of $0.05. Increased sales volumes offset a decline in gross margin due to…

This is our reading of a public filing, not the filing itself. Analysis can contain errors; check the source document for full context.