Environmental waste treatment and services provider Perma-Fix (NASDAQ: PESI) met Wall Street’s revenue expectations in Q2 CY2026, but sales fell by 11.7% year on year to $12.89 million. Its GAAP loss of $0.32 per share was 3.2% below analysts’ consensus estimates.
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Perma-Fix (PESI) Q2 CY2026 Highlights:
- Revenue: $12.89 million vs analyst estimates of $12.9 million (11.7% year-on-year decline, in line)
- EPS (GAAP): -$0.32 vs analyst expectations of -$0.31 (3.2% miss)
- Adjusted EBITDA: -$5.89 million (-45.7% margin, 156% year-on-year decline)
- Adjusted EBITDA Margin: -45.7%, down from -15.8% in the same quarter last year
- Market Capitalization: $412 million
Mark Duff, President and Chief Executive Officer of Perma-Fix, commented, “The second quarter did not deliver the financial results we expected, but it did deliver several key operational milestones we have been working toward for years. Our Perma-Fix Northwest (PFNW) facility began receiving Hanford-related waste streams as forecast, driving a 29% increase in treatment backlog to approximately $15.7 million at June 30, 2026, from $12.2 million at the end of the first quarter. In early July, PFNW began receiving liquid effluent wastes from the Direct-Feed Low-Activity Waste (DFLAW) facility — a major milestone for the Company and the culmination of years of permitting, capital investment and operational preparation. We have since begun receiving additional waste streams from DFLAW operations, and we expect those volumes to increase.
Company Overview
Tackling hazardous waste challenges since 1990, Perma-Fix (NASDAQ: PESI) provides environmental waste treatment services.
Revenue Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Over the last five years, Perma-Fix’s demand was weak and its revenue declined by 10.2% per year. This was below our standards and suggests it’s a low quality business.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Perma-Fix’s annualized revenue declines of 11% over the last two years align with its five-year trend, suggesting its demand has consistently shrunk. 
This quarter, Perma-Fix reported a rather uninspiring 11.7% year-on-year revenue decline to $12.89 million of revenue, in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 66.7% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will fuel better top-line performance.
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Operating Margin
Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.
Perma-Fix’s high expenses have contributed to an average operating margin of negative 14.6% over the last five years. Unprofitable industrials companies require extra attention because they could get caught swimming naked when the tide goes out. It’s hard to trust that the business can endure a full cycle.
Analyzing the trend in its profitability, Perma-Fix’s operating margin decreased by 24.1 percentage points over the last five years. Perma-Fix’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.
This quarter, Perma-Fix generated a negative 50.5% operating margin. The company’s consistent lack of profits raises a flag.
Cash Is King
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Perma-Fix’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 13.3%, meaning it lit $13.32 of cash on fire for every $100 in revenue.
Taking a step back, we can see that Perma-Fix’s margin dropped by 15.5 percentage points during that time. Almost any movement in the wrong direction is undesirable because it is already burning cash. If the trend continues, it could signal it’s in the middle of a big investment cycle.
Key Takeaways from Perma-Fix’s Q2 Results
We struggled to find many positives in these results. Its EBITDA missed and its EPS fell short of Wall Street’s estimates. Overall, this quarter could have been better. Still, the stock traded up 7.8% to $20.93 immediately following the results.
Big picture, is Perma-Fix a buy here and now? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).
