The following is a summary of the Hudson Technologies, Inc. (HDSN) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Hudson Technologies reported a third quarter revenue of $61.9 million in 2024, representing a 19% decrease from the previous year.

• The company's gross margin for Q3 2024 was 26%, down from 40% in the same quarter last year, largely due to lower refrigerant market prices.

• Net income for Q3 2024 was $7.8 million, or $0.17 per diluted share, compared to $13.6 million, or $0.29 per diluted share in Q3 2023.

Business Progress:

• The EPA issued the final refrigerant management rule, mandating the use of reclaimed refrigerants in certain sectors starting in 2029, which Hudson views positively.

• Hudson is enhancing its reclamation capabilities to capitalize on the expected increased demand for reclaimed refrigerants due to the HFC phaseout.

• The company is analyzing the latest EPA reclamation data to refine its market strategies and align with the ongoing industry shift towards lower GWP refrigerants.

Opportunities:

• The phasedown of HFCs and the increased regulatory mandate for the use of reclaimed refrigerants present significant opportunities for Hudson to enhance its market position.

• New state-level regulations promoting the use of reclaimed refrigerants in places like California, and potential similar laws in other states, provide additional market opportunities.

Risks:

• There is uncertainty regarding future HFC pricing and inventory levels, which could impact the financial performance if not appropriately managed.

• The slow depletion of 2023 HFC inventory levels suggests a potential delay in expected supply-demand imbalances, affecting pricing and profitability.

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