LiqTech International (NASDAQ:LIQT) executives told investors the company made progress in 2025 by increasing its mix of higher-value system sales, improving gross margin, and expanding several end-market initiatives, while also acknowledging that a delayed large oil and gas project caused the company to miss its original revenue expectations.
2025 results: revenue up 13% as system sales grew
CEO Fei Chen said 2025 was a “meaningful step forward,” with full-year revenue increasing 13% on a 49% increase in total systems and aftermarket revenue. The company reported that the shortfall versus its original revenue guidance was “primarily due to continued delays with a large oil and gas order that remains active” in the pipeline. Chen emphasized that the timing of large oil and gas projects is difficult to predict and said the company is working to avoid relying on “unpredictable oil” by building a more diversified systems portfolio with stronger visibility and improved margins.
- Systems and aftermarket: $8.2 million vs. $5.5 million in the prior year
- DPF and ceramic membrane sales: $4.0 million vs. $5.6 million
- Plastic components: $4.1 million vs. $3.4 million
Kowalczyk said the year-over-year increase was mainly driven by higher system deliveries—particularly pool filtration and industry systems—and higher plastic component deliveries, partly offset by decreased filter sales. He added that the delayed oil and gas system remains in the pipeline, but the company had not received a purchase order for it as of the call.
Pool systems set records and are expected to scale in 2026
Chen highlighted commercial swimming pools as a key area of predictable growth. He said the pool business delivered the strongest year in company history, with 34 pool systems sold in 2025, including 24 delivered during the year and 10 scheduled for delivery in early 2026. Pool system revenue totaled $2.6 million in 2025.
All pool systems sold in 2025 were based on the company’s proprietary QlariFlow commercial pool filtration platform. Chen said the platform is designed to address tighter operational and regulatory requirements and highlighted its automation capabilities and compact, modular form factor for retrofit installations where equipment room space is limited.
Chen also said LiqTech has made “structural improvements” to the pool system, including a newer modular design that is more standardized and cost-efficient, which management believes should improve gross margins and simplify installation. He contrasted pool systems, which he said are increasingly “repeatable off-the-shelf solutions,” with oil and gas systems that are often highly customized.
On distribution, Chen said LiqTech expanded its relationship with Boundary in the U.K. into an exclusive distribution agreement subject to minimal annual system volumes. He also said the company is seeing interest from U.S.-based pool companies and is working on final details for its first U.S. swimming pool project. Looking ahead, management reiterated its expectation for pool revenue of approximately $5 million to $6 million in 2026.
Energy and industry: disciplined approach to oil and gas, expansion in industrial wastewater
While oil and gas remains an opportunity, Chen said it continues to create timing challenges and that the company will be “disciplined” in allocating resources. He cited engagement with partners including NESR in the Middle East and ongoing trials through Razorback Direct in North America.
Chen also pointed to “encouraging and increasing tangible traction” in broader water-for-industry applications. As a proof point, he discussed the successful delivery and commissioning of an advanced membrane-based filtration system for oily wastewater at North Star BlueScope Steel. The system was designed to address filtration disruptions experienced with polymeric membranes due to high oil content and variability in wastewater quality, and Chen said LiqTech’s system has demonstrated strong performance.
To support U.S. growth, Chen said the company added dedicated sales resources and opened a service center in Texas in partnership with Halo Systems in November. The facility provides certified technicians, spare parts availability, remote and on-site support, and maintenance and repairs, which Chen said is important for scaling in the U.S. and has already contributed to business development by increasing customer confidence.
For 2026, management guided to $5 million to $8 million of revenue for water for energy and water for industry, compared with $4.1 million for that market segment in 2025. Management said the range primarily reflects the continued unpredictability of oil and gas project timing.
Marine: China joint venture investments and backlog into 2026
Chen said the marine segment is “building momentum,” particularly through the company’s joint venture in China. During 2025, LiqTech broke ground on a marine-focused R&D and sales center and localization facility in Haimen, Nantong, and completed a regional spare parts warehouse intended to strengthen service capabilities.
He said these investments are aimed at developing and localizing marine silicon carbide membrane water treatment units for dual-fuel engine vessels, with local assembly and sourcing intended to improve supply chain resilience and cost competitiveness in China. Chen said LiqTech believes silicon carbide membrane technology will gain adoption in dual-fuel vessels due to durability, chemical resistance, and energy efficiency.
The company ended 2025 with three marine orders for eight commercial vessels in backlog scheduled for delivery throughout 2026. Marine revenue, including service sales, was approximately $1.5 million in 2025, and LiqTech is targeting approximately $4 million in 2026.
Margins, EBITDA improvement, cash, and 2026 outlook
Kowalczyk said gross margin improved to 7.6% in 2025 from 1.7% in 2024. He attributed the improvement partly to higher revenue and the company’s typical contribution margins, while noting that fixed production costs remain under-absorbed at current revenue levels. He also said investments in deliveries of containerized oil and gas systems to the U.S. contributed to lower-than-usual margin, describing the effort as a strategic decision to validate the company’s value proposition and seed future growth.
Operating expenses were $9.6 million, compared to $9.7 million in the prior year. Adjusted EBITDA improved to negative $5.0 million from negative $6.1 million.
For 2026, management guided to revenue of $23 million to $27 million and said it targets a positive full-year adjusted EBITDA in the mid to high range of the revenue guidance, assuming constant currency. Chen and Kowalczyk attributed the outlook to growth across system segments—pool, marine, and industry—while noting oil and gas timing remains uncertain. Management also said it expects the combined legacy DPF, membrane, and plastics businesses to remain stable, with approximately $9 million of revenue anticipated in 2026.
On the balance sheet, Kowalczyk said the company ended the quarter with $5.1 million in cash.
During Q&A, Chen said the delayed large oil and gas order is expected to materialize in 2026, though the timing is in the customer’s hands; he said an “ideal” scenario would be finalization around the second quarter. Asked about tariffs and U.S. oil and gas competitiveness, Chen called tariffs a “moving target” and said the company has been able to have constructive discussions with customers so it does not need to absorb the full impact alone, while also focusing on cost reduction and standardization to help offset tariff pressure. He also said the company is evaluating different financial options to support its 2026 growth plan.
About LiqTech International (NASDAQ:LIQT)
LiqTech International, Inc develops and manufactures advanced ceramic filtration systems that leverage proprietary silicon carbide (SiC) membranes to remove particulates and hydrophobic contaminants from a variety of fluid streams. The company’s core products include tubular ceramic membrane modules and complete filtration skids designed for applications where high chemical resistance, thermal stability and mechanical strength are required.
Their filtration solutions are utilized across multiple industries, including municipal and industrial water treatment, desalination pretreatment, produced water management in oil and gas operations, and process water recycling in power generation and chemical processing.
