Aqua Metals (NASDAQ:AQMS) used its fourth-quarter and full-year 2025 earnings call to detail progress toward commercialization of its AquaRefining platform, highlight several technical milestones in battery materials recycling, and outline how recent financing and balance sheet changes have positioned the company for expanded engineering and site development work in 2026.
Commercial strategy narrows initial ARC configuration
President and CEO Steve Cotton said 2025 was “active and milestone-filled,” emphasizing what he described as a disciplined approach to commercialization as market conditions evolved. A key decision during the year was to simplify the first commercial AquaRefining Recycling Campus (ARC) facility around two feedstock streams—NMC black mass and LFP black mass—with an initial focus on three outputs: battery-grade lithium carbonate, nickel-cobalt mixed hydroxide precipitate (MHP), and iron phosphate.
Technical milestones: lithium quality, LFP processing, and expanded feedstock testing
On product quality, Cotton said the company’s lithium carbonate achieved fluorine levels under 30 parts per million, which he said is “at or above the quality standard for any recycled lithium source globally,” adding that material produced at scale has been distributed to strategic counterparties for evaluation.
Cotton also pointed to work expanding the product slate and qualification volumes, including development of nickel carbonate “calibrated to specific downstream partner requirements.”
A major focus of the call was lithium iron phosphate (LFP) processing. Cotton described the ability to economically recycle LFP as one of the company’s most significant technical achievements, noting Aqua Metals progressed from engineering and bench-scale work to processing an entire metric ton of LFP cathode scrap at its pilot facility. He said the company recovered battery-grade lithium carbonate that was validated by OEM and third-party testing. “That is not a lab result,” Cotton said, characterizing it as a demonstration at “commercially meaningful scale.”
In the Q&A portion, Cotton added that LFP recycling economics are challenging because LFP lacks nickel and cobalt, making process efficiency critical. He said the company’s approach is designed to recover lithium while also recovering iron phosphate “into a reusable form,” and he tied the opportunity to the growing volume of LFP gigafactory scrap and the increasing share of LFP across EV and stationary storage markets.
Cotton said the company also initiated trials on sodium sulfate regeneration aimed at helping precursor cathode active material (PCAM) producers convert a waste stream into a reusable chemical input. He added that alternative feedstock testing extended to nickel refinery residue, polymetallic nodule materials, rare earth-bearing magnets, and e-waste, underscoring what he called the flexibility of the electrochemical process.
Among 2025 highlights, Cotton said Aqua Metals was central to producing “the first cathode active material made entirely from recycled nickel sourced within the United States,” and he said that material has entered qualification at a Tier 1 battery manufacturer.
ARC facility planning: flexible scale, site diligence, and “build once, build right”
Cotton said Aqua Metals advanced ARC design work to support a processing range of 10,000 to 60,000 metric tons of black mass annually, which he said is intended to allow sizing based on partner configuration and capital structure rather than a predetermined scale.
He said the company conducted structured due diligence on several potential sites, assessing feedstock proximity, offtake access, utilities, permitting, and partner alignment. Cotton said the company expects to move forward with final site selection later in 2026 as “remaining commercial conditions come together.”
In response to an online question, Cotton said the company is in active due diligence on two specific sites and aims to settle on and secure a lead site, then spend the rest of the year progressing site-specific FEL2 engineering—described as moving from concept to a defined, location-specific design with cost estimates and execution plans.
Cotton also addressed the timing of a build decision, saying the company is not going to start construction without contracted feedstock, committed offtake, and “project financing that is genuinely bankable.” He summarized the approach as: “Build once, build right.”
Partnership activity and potential Lion Energy transaction
Cotton outlined several partnerships and agreements from 2025:
- 6K Energy: A multi-year supply agreement establishing commercial terms under which Aqua Metals would deliver battery-grade nickel metal and lithium carbonate into 6K’s domestic cathode active material operations.
- Westwin Elements: A non-binding letter of intent outlining terms for potential supply of recycled nickel carbonate to support development of a domestic nickel supply chain.
- Impossible Metals: An MOU exploring applying AquaRefining to responsibly collected seafloor materials containing nickel, cobalt, copper, manganese, and rare earth elements.
- MOBY Robotics: An MOU evaluating AquaRefining for polymetallic nodules, with potential to recover rare earth elements.
Asked how these agreements fit with the core business, Cotton said they are aligned because the underlying chemistry—electrochemical refining of dissolved critical mineral streams—can apply across black mass, refinery residue, e-waste, and deep-sea nodules. He added the partnerships can extend total addressable market and provide optionality that a licensing- and partnership-oriented model could monetize “without heavy incremental capital,” while reiterating battery recycling as the primary commercial path.
Separately, Cotton said the company remains engaged in diligence with Lion Energy on a transaction structure it believes could be “highly strategic.” He said the opportunity, if completed, could provide immediate commercial revenue and expand Aqua Metals’ reach into branded energy storage systems across portable, residential, commercial, data center, and industrial applications. Cotton also highlighted Lion Energy’s equity stake in American Battery Factory (ABF) as a potential way for Aqua Metals shareholders to gain exposure to U.S. gigafactory buildout and LFP cell production.
During analyst questions, Cotton said the company has been deep in due diligence across financial, legal, operational, and commercial workstreams and expects to conclude the process “in the near term.” He described a strategic rationale for integrating battery materials and energy storage, pointing to potential circularity and cost synergies and framing the concept as similar to integrated models used in China.
On ABF, Cotton said ABF is planning a first gigafactory in Tucson, Arizona and has secured land of about 270 acres. He said Aqua Metals is considering that area as a potential ARC site and referenced an existing MOU under which Aqua Metals would take scrap from the gigafactory as recycling input and return lithium carbonate. Cotton said ABF is seeking final-phase financing to begin the gigafactory later in 2026, describing gigafactory projects as involving “hundreds of millions of dollars” of project financing.
Financial results: cash, debt reduction, losses, and burn rate
Chief Financial Officer Eric West said Aqua Metals ended 2025 with approximately $10.8 million in cash and cash equivalents. He said the company raised about $20 million during 2025, including a $13 million institutional investment in October and about $7 million via ATM and equity line programs, which he said provides “multiple quarters of operating runway” to advance engineering, permitting, and site selection.
West also highlighted that Aqua Metals ended the year with no long-term debt, attributing the change to financial management actions including completion of the Sierra ARC asset sale in the second quarter and retirement of a $3 million Summit building loan.
For full-year 2025, West reported total operating expense of approximately $23.3 million versus approximately $23.8 million in 2024. He noted 2025 included about $9.1 million of impairment and loss on disposal charges compared with about $3.1 million in 2024, describing the impairment charges as non-routine and non-cash. Excluding those items, he said underlying operating expenses declined year over year, reflecting cost discipline and benefits from workforce reductions implemented in prior periods.
General and administrative expenses were approximately $10.5 million for 2025, down from approximately $12.0 million in 2024, which West attributed primarily to lower payroll-related costs, reduced professional fees, and overhead efficiencies. Fourth-quarter G&A was about $3.8 million. Research and development expense totaled approximately $1.3 million for 2025, with fourth-quarter R&D at about $0.4 million.
West said full-year 2025 net loss was approximately $22.6 million, or negative $15.15 per basic and diluted share, compared with a net loss of approximately $24.6 million, or negative $38.20 per share, for 2024. Fourth-quarter net loss was approximately $4.4 million, or negative $2.97 per share. He said results included non-cash items such as warrant liability remeasurement and impairment-related charges.
Net cash used in operating activities was approximately $10.3 million in 2025, compared with approximately $13.6 million in 2024. West characterized that as a more than 24.8% year-over-year reduction, reflecting overhead management and a lower cost structure.
West also noted that in December 2025 the company provided approximately $2.1 million of short-term financing to Lion Energy, which remained outstanding as a note receivable at year-end. He added that subsequent to year-end, in February 2026, Aqua Metals entered into a non-binding term sheet contemplating a potential acquisition of Lion Energy and contributed the outstanding note, along with an additional $2 million, to acquire a subordinated position interest in Lion’s senior secured credit facility as part of evaluating the potential transaction.
Looking ahead, West said the company anticipates a measured increase in cash usage as it ramps engineering, process optimization, and site readiness work, while continuing to manage spending with “rigorous discipline.”
In Q&A, Cotton also addressed feedstock market conditions, saying that “effectively, all of the black mass produced” in the U.S. and North America is being exported because domestic commercial-scale refining options are limited. He said Aqua Metals believes its process can be competitive given potential CapEx and OpEx advantages. Cotton also said refining economics have improved over the past year, noting that industry projects slowed when lithium carbonate prices fell to around $8,000 per ton in 2024, and that prices have recovered to “roughly the $20,000 plus or minus range per ton.”
On industry dynamics, Cotton said consolidation in battery recycling is a net positive for Aqua Metals, arguing that the 2024 lithium price collapse highlighted which business models were resilient. He also contrasted AquaRefining with chemical-intensive hydrometallurgical approaches, stating Aqua Metals’ process has lower chemical intensity and produces “zero sodium sulfate waste stream,” which he said could be better suited to North American permitting and operating realities.
About Aqua Metals (NASDAQ:AQMS)
Aqua Metals Inc (NASDAQ: AQMS) is a technology-driven environmental company pioneering sustainable battery recycling solutions. The company’s core offering, branded as AquaRefining, utilizes an electrochemical process to recover lead, silver, and plastic components from spent lead-acid batteries without the need for high-temperature smelting. This water-based approach aims to eliminate air emissions and reduce energy consumption compared to conventional recycling methods.
Based in Reno, Nevada, Aqua Metals develops, manufactures, and licenses its proprietary modular recycling systems to industrial battery recyclers and battery manufacturers.
