Author: Atrium Research August 28, 2026
Ben Pirie | Equity Research Analyst | [email protected] | 647-688-9661
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What you need to know:
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BQE reported Q2 financial results including prop. revenue of $11.3M (-13% YoY) compared to our estimate of $13.1M and adjusted EBITDA of $2.4M (flat YoY, 22% margin) vs. our expected $3.3M.
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The key standout of the quarter was operations services revenue which was up 167% YoY, representing 27% of revenue.
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Management presently has a highly positive outlook for the remainder of the year, expecting growth across its segments.
Yesterday, after market close, BQE Water (BQE:TSXV, BTQNF:OTCPK) reported Q2 financial results that were below our estimates. While revenue declined 13% YoY, adjusted EBITDA and net income were flat as the recurring and high-margin operations segment showed 167% YoY growth. We are maintaining our BUY rating and target price of $108.00/share on BQE.
Key Highlights
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Q2 prop. revenue was $11.3M (-13% YoY) vs. our estimate of $13.1M. Q2/25 was an exceptionally strong quarter including a large one-time equipment sale to ERDC, making it a tough comparable and the numbers reported were solid. The decline was almost entirely attributed to this and the site became a short-term operations client in Q2/26.
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Prop. revenue was comprised of operations services revenue of $3.1M (+167% YoY, 27% of revenue), short-term operations services revenue of $4.2M (+16% YoY), advisory and design technical services revenue of $1.9M (-70% YoY), and BQE’s share of JV revenue of $2.0M (+25% YoY).
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BQE achieved multiple operational milestones this quarter such as remobilizing its operations teams at Minto, initiating its 3-year contract with Nunavik, and adding five long-term operational contracts and three short-term operations contracts YoY.
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Gross margin for the quarter was 46%, hitting our expectation of 46%. This improves from the 33% in Q2/25, with gross profit dollars up 15% YoY.
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Q2 adjusted EBITDA came in at $2.4M (22% margin) compared to $2.5M in Q2/25 and our $3.3M. This miss was driven by the lower revenue but also by G&A being up 24% QoQ and sales & development being up 23% QoQ.
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Q2 net income was $1.8M vs. our estimate of $2.4M. OCF was ($1.3M) and FCFF was ($1.4M) as A/R increased $3.4M QoQ.
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BQE ended the quarter with $16.6M in cash, $3.2M in debt (leases and interest-free loans), and $21.0M in working capital.
| Q2/26A | Atrium Est. | YoY | |
| Proportional Revenue ($M) | $11.3 | $13.1 | -13% |
| GAAP Revenue ($M) | $9.2 | $11.2 | -18% |
| Gross Margin (%) | 46% | 46% | +1323 bps |
| Adj. EBITDA ($M) | $2.4 | $3.3 | -2% |
| Adj. EBITDA Margin (%) | 22% | 25% | +234 bps |
Figure 1: Q2 Financials Summary
Outlook
The team remains positive for its outlook with the resumption of seasonal operations at Kemess as well as other strong operational services across ten sites. The operations group initiated services at five new sites in 2026, contributing $1.9M in revenue YoY. BQE’s projects group also reached increased utilization QoQ, matching the utilization from Q2/25 due to new advisory services and engineering design projects. The aquatic toxicology lab became fully operational in Q2, working on projects and investigative work; requirements for regulatory compliance is expected over the coming months.
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Atrium Research Ratings System
BUY: The stock is expected to generate returns of over 20% over the next 24 months.
HOLD: The stock is expected to generate returns of 0-20% over the next 24 months.
SELL: The stock is expected to generate negative returns over the next 24 months.
NOT RATED (N/R): Atrium does not provide research coverage on the respective company.
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