Hudson Technologies (NASDAQ:HDSN) executives highlighted a return to revenue growth in the seasonally slow fourth quarter of 2025, outlined investment priorities aimed at supporting the refrigerant transition, and discussed updates on both inventory positioning and a Defense Logistics Agency (DLA) contract protest during the company’s year-end earnings call.
Strategy: infrastructure, inventory, ERP, services, and M&A
Chief Executive Officer Ken Gaglione, who returned to the company as CEO in November, said his near-term focus is aligned with Hudson’s capital allocation strategy and concentrated on “infrastructure, inventory, and ERP.” He said the company is investing in separation technology and automation to prepare for “new, more complex HFO refrigerant blends,” while also building inventory after entering 2025 “somewhat light” and missing some orders during the selling season. Gaglione said that inventory situation was corrected in the fourth quarter and that Hudson remains committed to stocking levels that support its service reputation.
Beyond operational investments, Gaglione discussed an organic and strategic push to expand service capabilities in the commercial market, describing opportunities that extend beyond traditional contractor services. In the Q&A, management referenced proactive monitoring and measurement of chiller performance and services related to handling and balancing more complicated A2L and HFO refrigerant blends. Management said it is still early to provide targets for revenue contribution from services but is developing internal goals to reduce dependency on a handful of dominant refrigerants and lessen seasonality.
Gaglione also reiterated a disciplined approach to acquisitions and alliances, pointing to the company’s recent acquisition of Refrigerants, Inc. to strengthen presence in the western U.S. for recovered refrigerant supply and distribution. He added that Hudson plans to continue returning capital via opportunistic share repurchases after buying back $20 million of stock in 2025.
Q4 2025: revenue up on volume, but profitability pressured by inventory costs and severance
Hudson reported fourth-quarter 2025 revenue of $44.4 million, up 28% year over year, which management attributed primarily to increased sales volume. Senior Vice President of Sales and Marketing Kate Houghton said execution in the back half of 2025 helped offset what had been a late start to the nine-month cooling season.
Gross profit in the quarter was $3.5 million versus $5.8 million in the prior-year quarter, reflecting $4.2 million of inventory-related costs, including a lower-of-cost-or-market adjustment associated with the fourth-quarter inventory build. SG&A expenses rose to $13.9 million from $8.0 million, including $4.0 million of executive severance costs. Excluding severance, non-GAAP adjusted SG&A was $9.9 million, which Bertaux said reflected increased staffing.
The company posted an operating loss of $11.2 million compared with an operating loss of $3.2 million a year earlier. Net loss was $8.6 million, or $0.20 per diluted share, versus a net loss of $2.6 million, or $0.06 per share, in the fourth quarter of 2024. On a non-GAAP basis excluding the after-tax impact of severance, Hudson reported an adjusted net loss of $5.4 million, or $0.13 per share.
Full-year 2025: modest revenue growth, lower margin, higher SG&A
For full-year 2025, Hudson reported revenue of $246.6 million, a 4% increase from 2024. Bertaux said the increase was driven primarily by a 6% increase in sales volume, partially offset by slightly lower pricing. Gross margin was 25.2%, down from 27.7% in 2024, reflecting slightly lower refrigerant market prices and higher freight costs.
SG&A was $40.2 million, up from $33.0 million. Non-GAAP adjusted SG&A was $36.2 million compared with $32.6 million, with management attributing the increase (excluding severance) to higher staffing, including a mid-2024 sales staff expansion.
Operating income was $18.6 million versus $29.3 million in 2024, while non-GAAP adjusted operating income was $22.6 million compared with $29.7 million. Net income was $16.7 million, or $0.37 per diluted share, compared with $24.4 million, or $0.52 per share, in 2024. Non-GAAP adjusted net income was $19.7 million, or $0.44 per diluted share, compared with $24.7 million, or $0.52 per share, a year earlier.
Management said the balance sheet remained unlevered, ending 2025 with $39.5 million of cash. Bertaux added that in the fourth quarter Hudson restocked inventory, completed the Refrigerants, Inc. acquisition, and repurchased $14 million of stock. The company ended 2025 having repurchased $20 million of common stock and said it expects to pursue additional buybacks in 2026 under a $20 million authorization.
Reclamation growth and pilot programs
Gaglione and Houghton emphasized the role of refrigerant recovery in supporting reclamation volumes. Management said 2025 marked the second consecutive year of an 18% increase in reclamation volume, which they linked to contractor-level engagement as well as expanded recovery capabilities stemming from acquisitions of USA Refrigerants and Refrigerants, Inc.
Houghton also detailed two reclaim-focused pilot programs launched during 2025:
- Washington, D.C. pilot with DC Sustainable Energy Utility (DCSEU): Hudson provides contractor training on recovery best practices, supplies storage containers, covers shipping and logistics, and offers financial incentives. Houghton said early results show participating contractors avoided 600,000 pounds of CO2e emissions by reclaiming refrigerants with Hudson, and the program is slated to expand to additional contractors.
- California Air Resources Board (CARB) REFRESH pilot: Hudson was selected to support CARB’s first program incentivizing refrigerant recovery and reclamation. Hudson will partner with contractors in the California Energy Commission’s Equitable Building Decarbonization Direct Install program to provide training and purchase recovered HFCs and HCFCs for reclamation.
Market and regulatory commentary: pricing, HFO timing, and DLA protest
Heading into the 2026 cooling season, Houghton said Hudson currently sees supply and demand as balanced with “some slight refrigerant price appreciation.” She said the average price of HFCs was slightly below $6 per pound at the end of 2025 and was slightly above $6 per pound at the time of the call. In response to analyst questions, management said it was not seeing indications of last year’s market disruptions and expected some continued upward price movement, while noting it is still early in the year.
On next-generation refrigerants, management said Hudson expects meaningful aftermarket demand for HFOs later than some OEM commentary suggests, with Gaglione stating the company does not anticipate “real significant” increases in HFO service demand until early 2027, even as Hudson already handles and rebalances such products.
Hudson also addressed EPA-related news around rescinding an endangerment finding used under the Clean Air Act. Houghton said Hudson does not believe this will affect the AIM Act’s independent authority for the HFC phasedown, adding that OEMs and producers are already advancing lower-GWP alternatives and that Hudson expects continued HFC demand as existing equipment remains in service.
On government business, Gaglione said Hudson recorded $38 million of DLA revenue in 2025 and had announced a contract renewal award in the fourth quarter. However, in late January 2026, Hudson was notified of a competitor bid protest, and the award was rescinded while the DLA reviews its internal processes. Management said Hudson will continue supporting the DLA under its existing contract, which runs through 2026. In the Q&A, management said it was fair to assume a similar run rate for 2026 under the existing agreement, though it declined to comment on the protest timeline.
Looking ahead, Bertaux said Hudson expects first-quarter 2026 revenue to increase by a low- to mid-single-digit percentage compared with the first quarter of 2025, despite ERP-related inefficiencies. Management said it plans to provide an update when it reports first-quarter results in May.
About Hudson Technologies (NASDAQ:HDSN)
Hudson Technologies, Inc is a U.S.-based provider of refrigerant management and sustainability solutions, specializing in the recovery, reclamation and recycling of refrigerant gases. The company’s core business centers on collecting used refrigerants—such as CFCs, HCFCs and HFCs—from industrial, commercial and institutional customers, processing them in certified reclamation facilities and returning material that meets industry purity standards.
Headquartered in Purchase, New York, Hudson Technologies operates a network of reclamation centers across the continental United States.
