LiqTech International (NASDAQ:LIQT) reported a first-quarter revenue decline from a year earlier, but management said the results were in line with expectations as the company shifts toward more repeatable opportunities in commercial pools, marine systems and component sales.
Chief Executive Officer Fei Chen said the quarter represented “a continued step forward” in the company’s transition toward a more balanced and profitable business. The year-over-year comparison was affected by a significant water-for-energy delivery in the first quarter of 2025 that did not repeat in the latest period, as well as the timing of order conversion.
The company reiterated its full-year 2026 revenue outlook of DKK 23 million to DKK 27 million, which Chief Financial and Operating Officer David Kowalczyk said would represent growth of approximately 39% to 64% compared with fiscal 2025.
Pool and Marine Systems Drive Management’s Growth Outlook
Chen said LiqTech is focusing on markets where its silicon carbide membrane technology can be deployed in standardized, repeatable platforms and supported through partners and service infrastructure. Commercial pools remain a key part of that strategy.
Pool revenue totaled DKK 0.8 million in the first quarter, compared with DKK 0.3 million a year earlier. Chen said the company expects a record quarter for commercial swimming pool revenue in the second quarter based on its order book.
Recent pool orders include the company’s first U.S. pool system order, consisting of three systems for the Weston County School District No. 1 Aquatic Center in Newcastle, Wyoming. Chen called entry into the U.S. market an important objective because of the size of the market, aging infrastructure and demand for automated, space-efficient filtration solutions.
The company also cited international orders with Lotec for a commercial pool project in Den Helder, Netherlands, and with Waterco Limited for 10 systems at the Plumpton Aquatic and Leisure Centre in Fraser Rise, Victoria, Australia. In response to a question on the call, Chen said LiqTech is pursuing both retrofit and new-build pool projects, noting that the company’s distributor base has expanded beyond its earlier retrofit focus.
Marine revenue also increased, totaling DKK 0.8 million in the first quarter compared with DKK 0.2 million a year earlier. LiqTech delivered two systems for marine dual-fuel engine water treatment for LNG vessels during the quarter and expects to deliver two more systems in the second quarter. Chen said the company’s joint venture in China is expected to support more sustainable order flow during 2026.
Water-for-Energy Pipeline Remains Active but Timing Uncertain
Management said water-for-energy and industrial applications remain opportunities, but emphasized that the timing of larger projects is difficult to predict. Chen said LiqTech is not basing its operating plan on any single large oil and gas project.
During the quarter, the company began a pilot program in West Texas for produced water stream treatment with an energy services and solutions company. Chen said field activity allows customers to validate the company’s technology in demanding operating conditions before making investment decisions for larger commercial projects.
In the question-and-answer session, Chen said the company did not receive much contribution from water-for-energy or water-for-industry in the first quarter, but said the pipeline includes “some very interesting projects with high probabilities.” He said growth for the remainder of the year is expected to come from commercial pools, marine, DPF and membrane activity, and potential conversions in water-for-energy and industrial markets.
Margins Improve Despite Lower Revenue
Kowalczyk said systems and aftermarket revenue was DKK 1.8 million, down from DKK 2.7 million a year earlier, reflecting the non-repeat of the prior-year water-for-energy delivery. DPF and membrane sales increased to DKK 1.3 million from DKK 1.0 million, while plastic components revenue was approximately DKK 1.0 million, roughly in line with the year-earlier period.
Gross profit was DKK 0.4 million, representing a gross margin of 9.5%, compared with gross profit of DKK 0.1 million and a gross margin of 2.7% in the first quarter of 2025. Kowalczyk attributed the improvement to system sales mix, better manufacturing capacity utilization, procurement efforts and lower depreciation expense.
During the Q&A session, management said project-level margins are currently being realized in a range of 30% to 50%, with an average of about 40%. With higher volume, the company said it should move closer to a steady-state margin of 40%, with potential additional benefits from scaling effects that could lower production costs for systems and membranes.
Expenses Rise as Company Invests in Sales and Marine Capabilities
Total operating expenses were DKK 2.7 million, up from DKK 2.3 million in the first quarter of 2025. Kowalczyk said approximately 60% of the increase was related to foreign exchange development.
- Selling expenses were DKK 1.0 million, compared with DKK 0.7 million a year earlier, reflecting hires in the Chinese joint venture and continued sales investments in the United States and Europe.
- General and administrative expenses were DKK 1.4 million, flat with the prior-year quarter.
- Research and development expenses were DKK 0.3 million, up from DKK 0.2 million, primarily tied to membrane development and marine systems work.
Other expenses were DKK 0.4 million, compared with DKK 0.2 million a year earlier, driven by foreign exchange transaction losses, lower interest income and accrued interest on the senior promissory note, partly offset by lower amortization of debt discount and lower net interest expense.
LiqTech reported a net loss of DKK 2.7 million for the quarter, compared with a net loss of DKK 2.4 million in the first quarter of 2025. Adjusted EBITDA was negative DKK 1.5 million, compared with negative DKK 1.4 million a year earlier.
The company ended the quarter with cash, including restricted cash, of DKK 2.7 million as of March 31, 2026. Kowalczyk said LiqTech remains focused on disciplined cash management and aligning spending with verticals that can support repeatable growth, improved margins and better revenue visibility.
Management said revenue is expected to ramp gradually through the year, with the second quarter already expected to improve from the first quarter. Chen said the commercial pool order book in particular provides visibility into a stronger second quarter, while Kowalczyk cautioned that quarterly revenue cadence will continue to be influenced by system delivery timing.
About LiqTech International (NASDAQ:LIQT)
LiqTech International, Inc develops and manufactures advanced ceramic filtration systems that leverage proprietary silicon carbide (SiC) membranes to remove particulates and hydrophobic contaminants from a variety of fluid streams. The company’s core products include tubular ceramic membrane modules and complete filtration skids designed for applications where high chemical resistance, thermal stability and mechanical strength are required.
Their filtration solutions are utilized across multiple industries, including municipal and industrial water treatment, desalination pretreatment, produced water management in oil and gas operations, and process water recycling in power generation and chemical processing.
