Refrigerant services company Hudson Technologies (NASDAQ: HDSN) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 7.5% year on year to $78.35 million. Its GAAP profit of $0.12 per share was 32.4% below analysts’ consensus estimates.

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Ken Gaglione, President and Chief Executive Officer of Hudson Technologies, commented, “Our selling season is underway and second quarter sales revenue and volume growth exceeded expectations despite significant headwinds in the quarter, including a continued trough in HFC market prices and inflationary pressures. We continued to deliver for our customers driving our second 2026 sequential quarter of double-digit volume growth. In fact, our trailing twelve months volume is up double-digits. We also continued our efforts towards reinvigorating our focus on long-term shareholder value creation, announcing a preliminary agreement for a major partnership for advanced separation technology and making investments in our plants that will expand capacity and capability.

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 sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Hudson Technologies grew its sales at a solid 10.2% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

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. Hudson Technologies’s recent performance shows its demand has slowed as its revenue was flat over the last two years.

This quarter, Hudson Technologies reported year-on-year revenue growth of 7.5%, and its $78.35 million of revenue exceeded Wall Street’s estimates by 5.6%.

Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months. While this projection implies its newer products and services will catalyze better top-line performance, it is still below average for the sector.

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Operating Margin

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 22.2%. This result isn’t too surprising as its gross margin gives it a favorable starting point.

Analyzing the trend in its profitability, Hudson Technologies’s operating margin decreased by 33.8 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 9.4%, down 8 percentage points year on year. Since Hudson Technologies’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Hudson Technologies’s EPS grew at 12.7% compounded annual growth rate over the last five years, higher than its 10.2% annualized revenue growth. However, this alone doesn’t tell us much about its business quality because its operating margin didn’t improve.

Diving into the nuances of Hudson Technologies’s earnings can give us a better understanding of its performance. A five-year view shows that Hudson Technologies has repurchased its stock, shrinking its share count by 9.1%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Hudson Technologies, its two-year annual EPS declines of 49% mark a reversal from its (seemingly) healthy five-year trend. We hope Hudson Technologies can return to earnings growth in the future.

In Q2, Hudson Technologies reported EPS of $0.12, down from $0.23 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term EPS growth than short-term movements. Over the next 12 months, Wall Street expects Hudson Technologies’s full-year EPS to grow 139% from $0.20 to $0.48.

Key Takeaways from Hudson Technologies’s Q2 Results

We were impressed by how significantly Hudson Technologies blew past analysts’ revenue expectations this quarter. On the other hand, its EPS missed. Overall, this quarter could have been better. The stock traded down 1.5% to $6.12 immediately after reporting.

Big picture, is Hudson Technologies a buy here and now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).