Perma-Fix Environmental Services NASDAQ: PESI reported second-quarter results that fell below management’s expectations, as delayed processing of Hanford-related waste pushed associated revenue into the second half of the year.
Revenue for the quarter was $12.9 million, down from $14.6 million a year earlier, while the company recorded a net loss of $6.2 million, or $0.32 per share. That compared with a net loss of $2.7 million, or $0.15 per share, in the prior-year quarter.
“Our second quarter financial results were below expectations,” President and CEO Mark Duff said. “Revenue was at $12.9 million, and we reported a net loss of $6.2 million. That is not the quarter we wanted to deliver.”
Processing Delays Weighed on Treatment Results
Chief Financial Officer Ben Naccarato said treatment-segment revenue declined by about $3.1 million from the prior year, reflecting lower processing volumes, an unfavorable waste mix, higher variable costs and lower gross profit.
According to Duff, the company received the Hanford-related waste streams it expected during the quarter, but a customer-directed change to treatment protocols delayed processing. The revisions were made to accommodate a change in disposal facilities, allowing Perma-Fix to receive waste for solidification but delaying processing and revenue recognition.
The company had already added personnel and incurred operating expenses to handle the expected waste volumes, creating a mismatch between second-quarter costs and revenue expected later in the year. Duff said Perma-Fix expects to begin processing the delayed waste shortly and to be caught up by the end of the third quarter.
Several new services projects also began later than anticipated, while the company processed lower-margin stored waste inventory that compressed treatment margins. Duff said that work is now substantially complete and has freed capacity ahead of anticipated tank-waste receipts.
Despite the lower treatment revenue, new waste receipts increased by $4.1 million from the first quarter. Treatment backlog rose 29% sequentially to $15.7 million at June 30, from $12.2 million at March 31. Naccarato said the backlog represented an indicator of customer demand and future processing activity.
Hanford Subcontract Creates Long-Term Opportunity
Management focused much of the call on a newly announced master subcontract related to tank-waste operations and closure work at the U.S. Department of Energy’s Hanford site.
Hanford Tank Contractor H2C awarded master subcontracts to Perma-Fix Northwest and two other companies for grouting and disposal work supporting the tank retrieval and disposition mission. The broader master indefinite-delivery, indefinite-quantity contract has a maximum value of approximately $4.4 billion, with task orders eligible to be issued from 2027 through 2041.
Duck emphasized that the contract ceiling is shared among subcontractors and does not represent an awarded or committed amount for Perma-Fix. Specific work will depend on task orders issued by H2C.
Perma-Fix Northwest is located about one mile from the Hanford site and is currently permitted to grout up to 1.2 million gallons annually. The company has submitted a permit-modification request to Washington State’s Department of Ecology to expand capacity to levels it says can support DOE objectives for both Hanford’s east and west tank areas.
Management said facility upgrades, including treatment equipment, infrastructure work and expanded mixing capacity, are in design and procurement. Duff said the company expects the expanded capability to be operating around the third quarter of 2027, subject to regulatory approvals and project execution.
DOE has publicly outlined a “dual glass-plus-grout” strategy that combines vitrification with grouting. Duff said DOE estimates about 60,000 gallons per month could be available for grouting beginning as early as the fourth quarter of 2026, increasing to approximately 130,000 gallons monthly by 2028 as its advanced modular pretreatment system reaches operation.
Management also cited DOE goals calling for up to 9 million gallons of pretreated waste to be grouted annually across Hanford’s east and west tank areas by 2030. Duff said Perma-Fix is preparing to meet that potential demand, though he noted that task orders have not yet been issued.
DFLAW Receipts Begin; Services Revenue Rises
In early July, subsequent to the quarter’s end, Perma-Fix began receiving liquid effluent waste from Hanford’s Direct-Feed Low-Activity Waste, or DFLAW, facility. The company has also begun receiving dry waste generated by DFLAW operations for processing and disposal at the local Hanford landfill.
DFLAW remains in a ramp-up phase. Duff said the facility had been operating at roughly 10,000 gallons per month on average, though he said management was told it processed 35,000 gallons in July and expected a higher volume in August.
Meanwhile, the company’s Nuclear Services segment posted revenue of $4.6 million, up 44% from $3.2 million a year earlier. Naccarato said growth was driven by several new project awards, partly offset by completion of projects that contributed revenue in the prior year.
Perma-Fix said its services backlog exceeds $17 million over the next 18 months, including work following a previously announced approximately $24 million Lawrence Livermore Master Task Agreement. Duff said services work can also generate material that subsequently flows through the company’s treatment facilities.
Liquidity Improved Following Equity Raise
Perma-Fix ended the quarter with $20.5 million in cash, compared with $11.8 million at the end of 2025, following a May public offering that generated approximately $21 million in net proceeds. Working capital totaled $18.4 million, and total debt stood at approximately $2.1 million.
The company used $8.8 million of cash in operating activities during the first half, primarily due to operating losses and working-capital requirements. It invested $2.9 million in capital expenditures and other investing activities, including about $2.7 million for strategic projects intended to support growth and operating capability.
Naccarato addressed a going-concern disclosure in the company’s Form 10-Q, saying it was included because forecasts rely on government-directed waste shipments and project activity that are not guaranteed. However, he said management expects existing liquidity, anticipated operating cash flow and borrowing availability to fund operations for at least the next 12 months. The company also amended its PNC Bank credit agreement after quarter-end, extending its maturity from May 2027 to May 2030.
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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