Quest Resource Turns the Corner: From Industrial Headwinds to a Debt-Focused Comeback
After two years of decline, the waste-management outsourcer returns to revenue growth, banks $4.5M in operating cash flow, and accelerates debt paydown.
QRHC · Earnings Call · 2026-08-06
A Timely Inflection
Quest Resource Holding Corp. (QRHC) finally delivered the long-awaited reversal. Revenue in Q2 2026 grew 8% year-over-year and 4% sequentially to $64.1 million, and management called out a return to top-line and adjusted EBITDA growth after several quarters of contraction. “Quest delivered a solid quarter of results as the sequential improvements in momentum we experienced in the first quarter carried forward into the second period.” — Perry Moss, CEO · 2026-08-06 The drivers were twofold: stabilizing volumes from key industrial customers and a growing contribution from new non-industrial wins, including a food products company, a large restaurant chain, a retailer, and one of the largest QSR franchisees. Notably, management cautioned that the industrial rebound may be less robust than the pre-2024 norm. “volumes still remain subdued relative to a few years ago at a few select accounts and are likely the new norm.” — Perry Moss, CEO · 2026-08-06 This tone of pragmatic optimism is consistent with the company's recent narrative of industrial portfolio stabilization rather than a full-blown cyclical recovery.The Share-of-Wallet Engine
The more compelling story is the deliberate diversification away from industrial dependence. Perry Moss noted that over the past four quarters the company has successfully onboarded several new customers, many outside the industrial sector, and has closed nine meaningful share-of-wallet wins since mid-2025. The latest quarter brought four more wins, including a significant one with a large national automotive parts retailer. This is squarely in line with the strategy discussed in prior calls, where the company prioritizes existing relationships that are easier to land and accretive to margins. “share of wallet opportunity that I referenced in the call is similar to a target for a new business account, so 7-figure plus. It's a little niche solution... they help to drive incremental GP.” — Perry Moss, CEO · 2026-08-06 The share of wallet opportunity is becoming a more reliable growth lever than new logo acquisition, especially given the elongated sales cycle in this macro environment.Operational Excellence Meets the Balance Sheet
Beyond top-line momentum, QRHC demonstrated tangible improvements in efficiency. SG&A fell 11% year-over-year despite 8% revenue growth, and the company delivered $4.5 million of operating cash flow in the quarter. CFO Brett Johnston credited higher revenues, cost discipline, and better billing and collections processes. DSOs improved to roughly 70 days from mid-70s, and working capital days dropped to 5 from 12 last quarter. The company used the cash to make another voluntary $2 million early payment on its term debt, reducing year-to-date debt by over $4 million. “First, we returned to top-line and adjusted EBITDA growth, which came from parts of the portfolio we have been deliberately building.” — Brett Johnston, CFO · 2026-08-06 He also noted a non-cash goodwill impairment of $11 million, which does not affect liquidity or covenants.The operational progress is visible in the Total Revenue trajectory. While still below the 2024 peak, the sequential expansion and improved mix are encouraging. debt reduction remains a key priority, and the company expects continued cash generation to fund further early payments.Taken together, we are building a more diversified revenue base with a leaner cost structure and a healthier balance sheet.