Hudson Technologies, Inc.

What they do

Hudson buys virgin and reclaimable HFO, HFC, HCFC and CFC refrigerants from suppliers and customers, then reclaims recovered refrigerant to AHRI standard for resale as certified EMERALD Refrigerants. It also performs RefrigerantSide Services at customer sites, mainly system decontamination to remove moisture, oils and contaminants and restore equipment capacity. Products and services are used in commercial air conditioning, industrial processing and refrigeration systems, and the company also sells industrial gases, predominantly to users in or involved with the US Military. It runs principally through wholly-owned subsidiary Hudson Technologies Company.

Revenue drivers

• Refrigerant gas sales — Sales of virgin and reclaimed refrigerants to HVACR customers; the filings state sales of refrigerants continue to represent a significant majority of revenues, though no separate dollar split is given.
• Refrigerant management / reclamation — Reclamation of recovered refrigerants restored to AHRI standard and sold as certified EMERALD Refrigerants; Hudson describes itself as one of the largest US refrigerant reclaimers.
• RefrigerantSide Services — On-site system decontamination to remove moisture, oils and other contaminants and restore systems to designed capacity; sold alongside gas sales to the same commercial and industrial customer base.
• Industrial gas sales and carbon offsets — Industrial gases sold to a variety of industry customers, predominantly US Military users, plus participation in carbon offset projects; the filings describe these as components of the business rather than separately sized segments.

Recent performance

Second quarter 2026 revenue was $78.3 million, up 8% from $72.8 million in the comparable 2025 period, on a 12% increase in sales volume partly offset by 6% lower selling prices. Gross margin fell to 26% from 31%, which management attributed to lower refrigerant market pricing versus the prior-year quarter and higher operating costs, primarily fuel. SG&A rose to $12.4 million from $9.3 million, cited to ERP optimization costs, legal expenses related to the DLA contract, and increased staffing and consulting. Net income was $4.9 million, or $0.12 per diluted share, versus $10.2 million, or $0.23, a year earlier. Full-year revenue has fallen from $325.2 million in 2022 to $246.6 million in 2025, with net income declining from $103.8 million to $16.7 million over the same period.

Strategy

Management says it is refocusing on long-term shareholder value through operational excellence, staffing, and diversification intended to reduce seasonality exposure. It announced an intention to partner with Icorium, a Kansas-based advanced separation technology company, to commercialize and scale patented extractive distillation technology that management says can purify more complicated refrigerant mixtures more productively and convert more recovered refrigerant into saleable product. Hudson is also investing in its plants to expand capacity and capability, and is optimizing a recently launched ERP system. Restoration costs at the tornado-damaged Illinois facility and related business interruption are expected to be covered by insurance.

Risks

• Refrigerant price volatility — The company ties its inventory net realizable value and margins directly to refrigerant market prices, which management says are affected by weather, seasonality, supply, government regulation and general political and economic conditions beyond its control.
• Regulatory transition risk — Hudson depends on Clean Air Act, AIM Act and state rules governing CFC, HCFC, HFC and HFO refrigerants, including the phaseout of all virgin HCFC production by 2030, and changes in those rules could affect demand and pricing.
• Customer concentration — Customer concentration is listed among the company's stated risk factors in both the 10-K and 10-Q, alongside reliance on sourcing refrigerants from suppliers and customers.
• Margin and cost pressure — Second quarter 2026 gross margin fell to 26% from 31% on lower pricing plus higher fuel and other operating costs, while SG&A rose to $12.4 million from $9.3 million.

Outlook

CEO Ken Gaglione said the second quarter exceeded expectations despite a continued trough in HFC market prices and inflationary pressure, and that trailing-twelve-month volume is up double digits. For the second half he said the focus is revenue growth and improving quarterly operating margins while continuing strategic investments. Management describes evaluating and acting on strategic diversification opportunities to strengthen competitive advantage and reduce seasonality exposure.