Hudson Technologies (NASDAQ:HDSN) Surprises With Q2 Sales, Stock Soars

Refrigerant services company Hudson Technologies (NASDAQ:HDSN) reported Q2 CY2025 results topping the market’s revenue expectations, but sales fell by 3.2% year on year to $72.85 million. Its GAAP profit of $0.23 per share was 35.3% above analysts’ consensus estimates.

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Company Overview

Founded in 1991, Hudson Technologies (NASDAQ:HDSN) specializes in refrigerant services and solutions, providing refrigerant sales, reclamation, and recycling.

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, Hudson Technologies grew its sales at a decent 7.7% compounded annual growth rate. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Hudson Technologies’s recent performance marks a sharp pivot from its five-year trend as its revenue has shown annualized declines of 14.1% over the last two years.

This quarter, Hudson Technologies’s revenue fell by 3.2% year on year to $72.85 million but beat Wall Street’s estimates by 1.7%.

Looking ahead, sell-side analysts expect revenue to grow 10.4% over the next 12 months, an improvement versus the last two years. This projection is commendable 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.

Hudson Technologies has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 24.1%. This result isn’t surprising as its high gross margin gives it a favorable starting point.

Looking at the trend in its profitability, Hudson Technologies’s operating margin decreased by 1.6 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Hudson Technologies generated an operating margin profit margin of 17.5%, in line with the same quarter last year. This indicates the company’s cost structure has recently been stable.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Hudson Technologies’s full-year EPS flipped from negative to positive over the last five years. This is encouraging and shows it’s at a critical moment in its life.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

Sadly for Hudson Technologies, its EPS declined by more than its revenue over the last two years, dropping 47.8%. This tells us the company struggled to adjust to shrinking demand.

We can take a deeper look into Hudson Technologies’s earnings to better understand the drivers of its performance. While we mentioned earlier that Hudson Technologies’s operating margin was flat this quarter, a two-year view shows its margin has declined by 13.1 percentage points. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

In Q2, Hudson Technologies reported EPS at $0.23, up from $0.20 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Hudson Technologies’s full-year EPS of $0.40 to grow 43.8%.

Key Takeaways from Hudson Technologies’s Q2 Results

We were impressed by how significantly Hudson Technologies blew past analysts’ EPS expectations this quarter on the back of a revenue beat. Zooming out, we think this was a solid print. The stock traded up 7% to $8.89 immediately after reporting.

Hudson Technologies may have had a good quarter, but does that mean you should invest right now? If you’re making that decision, you should consider the bigger picture of valuation, business qualities, as well as the latest earnings. We cover that in our actionable full research report which you can read here, it’s free.