LiqTech International (NASDAQ:LIQT) reported higher third-quarter revenue as marine water treatment and diesel particulate filter sales grew, but its loss widened from a year earlier as gross margin declined and operating expenses rose.
The filtration technology company maintained its 2026 revenue guidance of $20 million to $23 million, leaving it reliant on a stronger fourth quarter to meet that range. Chief Executive Officer Fei Chen said existing orders and backlog provide visibility, but meeting the forecast depends on completing production, securing customer acceptance and delivering systems on schedule.
LiqTech also said its current pipeline supports the potential for 30% to 40% revenue growth in 2027. Chen described that outlook as preliminary, not formal guidance, and cautioned that converting opportunities into revenue will depend on customer decisions and execution.
Margins Improve Sequentially but Fall From a Year Ago
Third-quarter revenue rose 15.5% to $4.4 million from $3.8 million a year earlier and was essentially unchanged from the second quarter. Marine and diesel particulate filter, or DPF, sales drove the year-over-year increase, while commercial aquatics and plastics revenue declined.
Gross margin improved to 12.3% from 8.4% in the second quarter but fell from 19.6% a year earlier. Chief Financial and Operating Officer David Kowalczyk said the annual decline reflected a shift toward system sales and away from aftermarket services, as well as lower manufacturing capacity utilization.
The company reported a net loss of $1.8 million, compared with $1.5 million a year earlier and $3.1 million in the second quarter. Adjusted EBITDA was negative $1.1 million, versus negative $0.5 million a year earlier and negative $1.6 million in the prior quarter. Operating expenses rose 12.2% year over year to $2.3 million but declined 13.4% sequentially.
Fourth-Quarter Deliveries Are Key to Guidance
With $12.9 million in revenue reported through September, LiqTech needs approximately $7.1 million in the fourth quarter to reach the low end of its annual guidance and $10.1 million to reach the high end, Kowalczyk said. Existing orders and backlog, particularly in industrial water, marine and DPF, support a substantial portion of the lower end, he said.
Reaching the upper end would depend on additional material orders or the timing of project execution, including potential water-for-energy opportunities, Kowalczyk said. The company did not disclose the size of its backlog or sales pipeline.
Asked about operating leverage at quarterly sales of $8 million to $10 million, Kowalczyk said the company sees EBITDA breakeven in that range. It could occur in the fourth quarter, he said, depending on the final customer mix.
Orders Span Industrial Water, Marine and Filters
A $2.1 million follow-on order from a U.S. steel manufacturer covers four additional QureFlow wastewater systems. Chen said the systems are expected to be substantially completed by year-end, with revenue recognized based on percentage of completion. A separate QureFlow system for Water Works Industrial Services in Freeport, Texas, is expected to be delivered in the fourth quarter.
Marine revenue rose to approximately $0.9 million from $0.5 million a year earlier. LiqTech delivered its third iCER water treatment system during the quarter, while two completed scrubber systems moved into the fourth-quarter delivery schedule after the timing of customer acceptance testing shifted. In October, an existing customer ordered two additional iCER systems.
DPF revenue rose to $1.1 million from $0.8 million a year earlier. Chen said DPF sales orders from January 1 through November 1 increased 30% from the same period in 2025. A raw material availability issue that affected second-quarter production has been resolved, and the company expects fourth-quarter DPF revenue to exceed the third-quarter level.
Commercial aquatics revenue fell to $0.8 million from $1.1 million, while plastics revenue declined to approximately $0.7 million from $1 million. Chen attributed the softer aquatics quarter largely to project timing and said orders and expected project activity support a stronger fourth-quarter contribution.
Cash Position and Finance Transition
Cash and restricted cash totaled $13.9 million at the end of September, down from $15.7 million at the end of June but above $5.1 million at the end of 2025. Kowalczyk said financing completed in June provides flexibility for working capital and growth priorities.
Chen also noted Kowalczyk’s planned departure on November 30. Michael Schrøder was appointed interim chief financial officer effective November 1.
About LiqTech International (NASDAQ:LIQT)
LiqTech International, Inc. (NASDAQ: LIQT) is a clean-technology company that develops and manufactures filtration products based on silicon carbide (SiC) ceramic materials. Its technology is designed to provide high-efficiency filtration for demanding industrial and environmental applications. The company’s water-filtration business supplies SiC membrane products and filtration systems for applications including industrial wastewater treatment, water reuse, produced-water treatment and other challenging liquid-filtration processes.
