Birchtech’s Long Patent Battle Ends — Now the Hard Part: Converting Litigation Wins into Recurring Water Revenue
Q2 2026 caps a seven-year IPR saga; the company now pivots to scaling its water business, backed by a $78M judgment and a refreshed product pipeline.
BCHTD · Earnings Call · 2026-08-13
Birchtech’s Long Patent Battle Ends — Now the Hard Part: Converting Litigation Wins into Recurring Water Revenue
Birchtech (ticker BCHTD) reported Q2 2026 earnings on August 13. The quarter itself was financially modest — revenue of $3.8M, a net loss of $3M — but it marked the end of a seven-year legal saga. Every remaining challenge to the company's patented SEA mercury-control technologies under inter partes review has been dismissed, removed, or resolved. As CEO Richard MacPherson put it: “After 7 years of disciplined enforcement, our patent estate stands well protected, an outcome that validates the business-first approach we've taken since 2019.” — Richard MacPherson · 2026-08-13 That closes the highest-profile risk to the air business and clears the path for what is now the core growth story: water treatment.Patent Protection and the $78M Judgment
The IPR victory is not just symbolic. It underpins a $78+ million final judgment entered in Delaware in December 2025. Defendants have appealed without posting a bond, so post-judgment interest continues to accrue. The appeal process is now the only remaining step before enforcement. Management expects a ruling this year and remains confident. For a company that has collected roughly $37M in licensing and settlements since 2019, the judgment — if collected — could transform the balance sheet. The company ended the quarter with $11.8M in cash and no debt.Q2 Financials: Sand in the Hourglass
Revenue rose to $3.8M from $3.3M, but gross margin compressed because the mix shifted away from high-margin licensing revenue toward product sales. Gross profit was flat at $1M. Operating expenses climbed, driven by professional fees, R&D, and one-time license and settlement fees. Net loss widened to $3M ($0.11 per share) from $1.5M, and adjusted EBITDA loss was $1.9M. The company is intentionally burning cash to position the water division.Water: The Long Game Begins
The water platform is now generating initial revenue, and the product portfolio is expanding. Birchtech recently launched a nuclear-grade ion exchange resin line (SEA-IX) targeting a $200M+ addressable market, and has now added two more lines for boron and heavy metal removal. MacPherson noted: “We have recently expanded upon this product portfolio by adding 2 additional lines focused on removing specific contaminants, boron and heavy metals.” — Richard MacPherson · 2026-08-13 The company is also building a pipeline of offtake agreements for a carbon rejuvenation facility, with updates expected as early as September. On the commercial readiness front, the company's data-first approach — RSSCT testing at design centers — is being adopted by engineering firms, and management expects to announce "some significant decisions" on water partnerships in Q3. “We are getting close to some significant decisions on that front through the work that we've been doing over these past few months.” — Richard MacPherson · 2026-08-13 That kind of commercial readiness is exactly what investors want to see before the regulatory wave of PFAS and other contaminant rules forces utilities into action.Air Business: From Litigation to Supply
The air segment remains the self-funding engine. Management expects a significant increase in product supply revenue in 2026 as licensed utilities transition to direct purchases when existing contracts expire. The supply opportunity tied to the plants that have already licensed Birchtech's SEA technology is "quite significant," per MacPherson: “So the opportunity, given the capacity factor of the plants that we've signed licenses with, is quite significant.” — Richard MacPherson · 2026-08-13 This is a launch readiness story for a new revenue stream that will benefit from AI-driven power demand supporting coal plant longevity.Leadership and Outlook
New CFO Mike Mioska joined in May and COO Jim Trettel was promoted. The management team is now built for scale. The plan for the rest of 2026 is narrow: convert more licensed utilities into recurring customers, sign offtake agreements for the rejuvenation facility, and deepen water market penetration. The market is beginning to price in the optionality. Given the small-cap nature and the binary nature of the $78M judgment, the stock is likely to be volatile.Prior quarters have consistently highlighted the water ramp. Back in March 2026 (Q4 2025 call), MacPherson said: “We have yet to sign any actual offtake agreements, but we're in some great discussions right now and continuing to move forward to present that option to a number of different new utilities as well.” — Richard MacPherson, Chairman and CEO · 2026-03-31 And in May 2026 (Q1 2026 call), he mentioned: “At least 3 significant utility opportunities that we're in the midst of working on now.” — Richard MacPherson, CEO · 2026-05-13 The current call suggests these are converging towards signing. The biggest change this quarter is not the numbers — it's the de-risking of the patent estate and the acceleration of water. The company is moving from a litigation-driven story to an operational growth story. That transition is rare and worth watching.Our design centers will become significant profit centers, establishing our credibility and creating a strong market position for our products, services and highly effective technologies.