Perma-Fix Environmental Services (NASDAQ:PESI) outlined a fourth-quarter revenue increase, improved full-year loss metrics, and what management described as a widening set of growth catalysts tied to Department of Energy (DOE) cleanup programs—particularly at Hanford—during its fourth quarter and fiscal 2025 business update call.
FY2025 results: revenue rose as treatment offset softer services
President and CEO Mark Duff said 2025 was focused on “strengthening our operational foundation” and preparing for increased waste volumes expected as the DOE’s Direct-Feed Low-Activity Waste (DFLAW) program transitions into operations. For the full year, the company reported revenue of approximately $61.7 million.
Naccarato attributed the annual improvement primarily to treatment, with treatment segment revenue up $10.1 million for the year, while the services segment declined $7.6 million due to the timing of project startups and awards.
Fourth-quarter gross profit was $1.2 million compared with $594,000 in the prior-year quarter. For the full year, gross profit increased by $6.0 million, driven largely by higher treatment revenue and improved margins, partially offset by increased fixed plant costs, Naccarato said.
SG&A rose to $4.2 million in the fourth quarter from $3.9 million a year earlier, and to $16.4 million for the full year from $14.4 million in 2024, which Naccarato said reflected higher payroll, trade show, and legal expenses.
Net loss for the fourth quarter was $5.7 million compared with a net loss of $3.5 million in Q4 2024. Naccarato noted the quarter included a $2.7 million adjustment tied to a discontinued operation remediation cleanup, equating to $0.15 per share. For 2025, net loss improved to $13.8 million versus $20.0 million in 2024; he also highlighted that 2024 included roughly $8.2 million of income tax expense related to a valuation allowance on U.S. deferred tax assets.
EBITDA from continuing operations was a loss of $2.7 million in the fourth quarter, compared with a $3.0 million loss in the year-ago period. For the full year, EBITDA loss narrowed to $9.7 million from $13.8 million in 2024.
Hanford and DFLAW: permit renewal expands capacity, receipts expected to begin in Q2
A central theme of the call was Hanford-related work. Duff highlighted the renewal of the permit for the Perma-Fix Northwest facility, which he said expands permitted capacity to approximately 1.2 million gallons of liquid mixed waste annually and authorizes macroencapsulation of up to 175,000 tons annually.
Management discussed DOE’s decision to extend DFLAW hot commissioning, but Duff said waste is expected to be received at Perma-Fix Northwest beginning in April for dry waste and May for liquid waste. Duff also said DOE described anticipated waste streams that could grow above original estimates by as much as 20% due to process-flow changes that include grouting a portion of effluent rather than using vitrification as originally designed.
On the call, Duff cited DOE planning documents indicating DFLAW hot commissioning began in October 2025, with DOE planning to reach an operational phase at roughly 40% capacity within 12 to 18 months, and then increase toward 80% as additional systems come online, within three years under the Tri-Party Agreement. Duff said initial estimates for revenue potential remained “about $1 million-$2 million per month” beginning in Q2 and ramping through the year, while emphasizing that timing depends on DOE execution and site operating conditions.
In the Q&A session, Duff provided additional detail on several expected Q2 contributors at Northwest, including:
- A brine waste stream from Hanford surface water settling pond runoff, expected to begin around April 1, which Duff said could represent about $1.5 million per month in revenue and be a “very sustainable waste stream.”
- DFLAW “blowdown water” (described as scrubber water used for effluent requirements), which Duff said could begin shipping after a supplemental analysis clears public comment (mid- to late April), with shipments potentially starting in May.
- A transuranic (TRU) waste program that Duff said doubled in size, moving from one shift to two shifts, adding about $750,000 to $1.0 million per month.
Near-term cadence: softer Q1 expected, “inflection point” in Q2
While the company said it does not typically provide formal guidance, Duff set expectations for a softer first quarter due to DFLAW receipt delays, seasonal weakness in January and February field activity, and efforts at Perma-Fix Northwest to process stored waste ahead of expected Hanford-related increases.
Duff said first-quarter losses will “likely exceed $4 million in negative EBITDA” on about $13 million of revenue, though he added that activity strengthened in March and the company expects Q2 to be an inflection point.
He also said a revenue recognition timing issue will shift approximately $2 million of revenue generated at Perma-Fix Northwest from Q1 into Q2, even though it is processed in Q1.
Backlog and international activity: treatment backlog increased; services backlog wins cited
Duff said the treatment segment showed improvement in 2025 due to higher volumes, improved throughput, and a stronger waste mix, with treatment revenue up approximately 29% year-over-year. He also said treatment backlog increased about 51% year-over-year to approximately $11.9 million in revenue; Naccarato also cited waste treatment backlog of $11.9 million at year-end 2025 versus $7.9 million the year before.
Duff also pointed to international growth, saying revenue from foreign entities increased about 163% year over year to approximately $6.4 million. In Q&A, Duff said additional Canada work is expected to begin mid-April and run through the summer, with other Canadian projects potentially beginning in Q3, continued waste from Germany, and a project in Italy where Perma-Fix’s role is expected to start later (with waste potentially not arriving until 2027). He said international revenue in 2026 may be “close” to 2025 but could be 25% to 30% lower, with a stronger 2027 expected.
In services, Duff said revenue declined due to project mobilization timing and procurement cycles, including delays linked to the transition to a new administration and a partial federal government shutdown in October. Despite the 2025 decline, he said the company won “over $30 million in new services backlog” and submitted “over $40 million in new bids just during Q1.”
PFAS destruction platform: Gen 2 system targeted for late April/early May testing
Management also discussed development of its PFAS destruction platform. Duff said the company completed construction and installation work on a Generation 2.0 PFAS destruction system at Oak Ridge designed to increase destruction capacity by up to three times and incorporate improvements intended to reduce operating costs and improve reliability.
In Q&A, Duff said the Gen 2 system was delayed a couple of months due to supply chain issues, but equipment is on-site and the company expects to start testing in late April or early May. He said once online, total capacity could reach about 3,000 gallons per day when combined with the existing unit.
Duff said the existing system operates commercially at about 650 gallons per day and runs about four days per week on average. He also discussed pricing, stating that for larger volumes the company can treat PFAS between $11 and $15 per gallon, while smaller quantities can be above $30 per gallon. Duff added the company’s target is 60% to 70% incremental margins on average, in line with its treatment margins.
When asked about capital costs, Duff said the second system’s CapEx was in the $4 million to $5 million range. Naccarato added that net property and equipment increased $3.5 million year over year, largely due to capital spending including construction of PFAS reactors.
On the balance sheet, Naccarato said cash was $11.8 million at year-end 2025, down from $29.0 million a year earlier. He said unbilled receivables increased by $3.8 million due primarily to the timing of waste shipments in the treatment segment, and total debt at quarter-end was $2.0 million, mostly owed to PNC Bank. Asked about cash flow expectations and future investments, management said it remained comfortable with the balance sheet as of Dec. 31 while evaluating capital needs as opportunities develop.
About Perma-Fix Environmental Services (NASDAQ:PESI)
Perma-Fix Environmental Services, Inc (NASDAQ: PESI) is a specialized provider of environmental and nuclear waste management solutions. The company offers a comprehensive suite of services, including treatment, recycling, processing, volume reduction and disposal of hazardous, radioactive and mixed wastes. Its capabilities span thermal, chemical and physical treatment technologies, supported by a network of licensed facilities designed to handle complex waste streams.
Founded in 1994 and headquartered in Atlanta, Georgia, Perma-Fix has grown both organically and through strategic acquisitions.
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