Hudson Cuts 2026 Gross-Margin Target After Volume Gain
Second-quarter revenue reached $78.3 million as sales volume rose 12% and selling prices fell 6%.
Hudson Technologies (HDSN), a refrigerant reclaimer and supplier to the HVAC industry, reported second-quarter revenue of $78.3 million, up 8% from $72.8 million a year earlier. Sales volume rose 12%, the second consecutive quarter of double-digit volume growth after 20% volume growth in the first quarter. Trailing-twelve-month volume was up double digits.
Selling prices fell 6% versus the year-ago period, reversing the first quarter’s slightly higher HFC pricing. President and Chief Executive Officer Ken Gaglione said second-quarter sales revenue and volume growth exceeded expectations despite a continued trough in HFC market prices and inflationary pressures.
Gross margin was 26%, compared with 31% in the second quarter of 2025. The company said the decline reflected 6% lower refrigerant market pricing versus a year earlier, when all refrigerant prices had risen on supply-chain constraints tied to the EPA-mandated transition to HFO refrigerants, and higher operating costs, primarily fuel, from geopolitically driven inflation.
Selling, general and administrative expenses were $12.4 million, up from $9.3 million a year earlier. The company attributed the increase to costs related to optimizing the recently launched ERP system, legal expenses tied to its DLA contract, and added staffing and consulting resources for longer-term shareholder-value initiatives.
Net income was $4.9 million, or $0.12 a share, compared with $10.2 million, or $0.23 a share, a year earlier.
An Illinois facility was disrupted by tornado damage in mid-June. The company said there were no injuries, the plant was restored to pre-storm output with only minimal interruption to customers, and all costs to restore the facility and related business interruption are expected to be covered through insurance.
Following the close of the quarter, Hudson announced a preliminary agreement to partner with Icorium, an advanced separation technology company based in Kansas, to commercialize and scale patented extractive distillation technology. Gaglione said the technology complements conventional fractional distillation by increasing the ability to purify more complicated refrigerant mixtures, and that converting more recovered refrigerant into saleable product unlocks working capital and creates a competitive edge as the industry phases out conventional refrigerants.
The company revised its previously announced full-year 2026 gross margin target from mid-twenty percent to low-to-mid-twenty percent, citing continued subdued refrigerant market pricing and inflationary pressures through the close of 2026. Gaglione said the company continues to focus on revenue growth and improving quarterly operating margins in the second half of the year, while remaining committed to strategic investments in operational excellence, staffing, and diversification opportunities that reduce exposure to seasonality.
Cash and cash equivalents were $25.6 million at June 30, 2026, down from $39.5 million at December 31, 2025. The company described an unlevered balance sheet. Trade accounts receivable were $43.3 million, compared with $17.1 million at year-end 2025. Inventories were $128.1 million.
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