Fuel Tech, Inc. (FTEK): Business Model Canvas [Dec-2025 Updated]

You're looking to really dissect how Fuel Tech, Inc. makes its money, beyond just the stock ticker. As someone who's spent two decades in the trenches, I can tell you their model hinges on two distinct gears: big project-based Air Pollution Control (APC) system sales and sticky, recurring revenue from their FUEL CHEM chemical services. Honestly, seeing a projected $27 million in consolidated revenue for 2025, backed by a solid $33.8 million in cash as of Q3, shows a company with real assets supporting its tech. But the real story is in the mechanics-how they convert that specialized engineering into a 48.9% gross margin and manage that $9.5 million backlog. Dive below to see the full nine blocks of their business blueprint.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Key Partnerships

You're looking at the partnerships that make Fuel Tech, Inc.'s technology delivery possible, especially after a busy third quarter in 2025. These relationships are critical for both the Air Pollution Control (APC) and FUEL CHEM segments.

The most recent, concrete example of a strategic partnership move was the acquisition of complementary APC intellectual property from Wahlco, Inc. Fuel Tech, Inc. completed this transaction for a total cash consideration of exactly $350,000 subsequent to the end of Q3 2025. This was a smart, cost-effective way to expand the IP portfolio, which is key for future project execution.

The execution of international projects relies heavily on a robust global network of sales agents and representatives. While I don't have a precise count of the agents you work with, you definitely operate across several key regions to support your backlog. For instance, the consolidated APC segment backlog at September 30, 2025, was $9.5 million, which included $5.5 million recognized as foreign delivered project backlog.

Here's a snapshot of the financial context surrounding your operational segments, which these partnerships support:

For the FUEL CHEM segment, which uses chemical processes to control issues like slagging and fouling, your relationship with suppliers of chemical reagents and raw materials is non-negotiable. Management reaffirmed confidence in meeting the 2025 FUEL CHEM revenue objective of $15 million to $16 million, which directly depends on the consistent supply chain for these consumables. This means your procurement team needs tight contracts in place.

When you secure large-scale APC system installations, you depend on established engineering and construction firms. These partners are essential for translating your intellectual property into physical, operational assets for customers in the U.S., Europe, and Southeast Asia, where you announced $3.2 million of new APC awards in August 2025. The ability to execute on the current backlog, which includes expected recognition of approximately $7.1 million within the next 12 months, hinges on these field execution relationships.

You rely on a few key types of external relationships:

• Strategic IP acquirers like Wahlco, Inc.
• International sales agents covering the Americas, Europe, and the Pacific.
• Suppliers providing chemical reagents for FUEL CHEM operations.
• Engineering and construction firms for APC project deployment.

Finance: draft the 13-week cash view by Friday, focusing on working capital needs for the Q4 APC project pipeline.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Key Activities

You're looking at the core things Fuel Tech, Inc. (FTEK) actually does to make money, based on their late 2025 performance. It's all about engineering, chemicals, and environmental tech.

Advanced engineering and design of Air Pollution Control (APC) systems

The engineering and design work is heavily tied to the Air Pollution Control (APC) segment backlog, which shows what's lined up for future installation. As of September 30, 2025, the consolidated APC segment backlog stood at $9.5 million. This was an increase from $7.8 million at the end of the second quarter on June 30, 2025. The company announced $3.2 million of new APC awards during the third quarter of 2025. Management is definitely eyeing a massive new market, with a sizable data center-related pipeline for SCR (Selective Catalytic Reduction) NOx control across the U.S. estimated at 8-10 opportunities, potentially worth $80 million-$100 million. Still, they are being cautious, with 2-3 of those commercial opportunities possibly closing late 2025 or in the first quarter of 2026.

Manufacturing and installation of proprietary $\text{NO}_{\text{x}}$ reduction technologies

The physical work of manufacturing and installing these systems is reflected in the APC segment revenue, though timing can cause swings. For the three months ended September 30, 2025, the APC segment revenue was $2.7 million, down from $3.2 million in the same period last year. This revenue decline was primarily related to the timing of project execution on existing contracts. To enhance the portfolio for future installations, Fuel Tech, Inc. completed a small strategic intellectual property acquisition from Wahlco, Inc. for a total cash consideration of $350,000 subsequent to the end of the third quarter.

Research and development (R&D) of new water treatment (DGI) and APC solutions

R&D efforts are showing up in the Dissolved Gas Infusion (DGI) water treatment area, where progress continues with demonstrations and commercial outreach. Specifically, the company commenced an extended demonstration of its DGI technology in July at a fish hatchery in the Western U.S., which is expected to run until the second quarter of 2026. The acquisition of Wahlco IP also brings in technology applicable to flue gas conditioning systems and urea to ammonia conversion technologies for nitrogen oxide reduction, which will feed future APC R&D and aftermarket revenue.

Chemical application services for combustion unit optimization (FUEL CHEM)

The FUEL CHEM segment is definitely driving current revenue strength. For the third quarter of 2025, FUEL CHEM segment revenue rose to $4.8 million, up from $4.6 million in the third quarter of 2024. Management raised the full-year 2025 FUEL CHEM revenue expectation to approximately $16.5 million-$17 million, up from the prior guidance of $15 million-$16 million. This segment also delivered a strong gross margin of 49.8% for the quarter, an improvement from 49.2% year-over-year. A new demonstration program for a U.S. FUEL CHEM customer, which recently commenced, has an estimated annual revenue potential of $2.5 to $3.0 million if the customer runs the program full-time.

Overall consolidated revenue for the base case 2025 expectation is approximately $27 million, which represents an 8% increase over 2024, excluding material APC data center awards. The consolidated gross margin for Q3 2025 expanded to 48.9% of revenues.

Finance: draft 13-week cash view by Friday.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Key Resources

You're looking at the core assets Fuel Tech, Inc. (FTEK) relies on to deliver value, and honestly, it's a mix of hard assets and deep know-how. The foundation is definitely their portfolio of proprietary environmental control and water treatment technologies, backed by a highly specialized engineering and technical personnel group that custom-designs solutions using advanced modeling. This expertise is what makes their core offerings work so well in the field.

Here's a quick look at the numbers defining their current financial footing and the performance metrics we see from their key tech as of late 2025.

The balance sheet strength is a major resource right now. Fuel Tech, Inc. ended Q3 2025 with $33.8 million in total cash and investments, which breaks down into $13.7 million in cash and cash equivalents and $20.2 million in short- and long-term investments. To be fair, the lack of any outstanding debt means they have significant financial flexibility to pursue growth initiatives and manage working capital, which stood at $26 million at that same quarter end.

Also, the company recently bolstered its Air Pollution Control (APC) capabilities by acquiring intellectual property from Wahlco, Inc. for $350,000 subsequent to the third quarter close. This move was strategic, aimed at enhancing their existing APC solutions portfolio. This IP acquisition, though small in dollar terms, adds to the firm's intangible assets, which are crucial in this specialized engineering space.

The proprietary technology portfolio itself is a primary asset, underpinning their service and product offerings across environmental control and water treatment. These systems are supported by deep internal modeling capabilities.

• NOxOUT: Urea-based Selective Non-Catalytic Reduction (SNCR) technology, with over 50 systems installed on units greater than 400MW.
• FUEL CHEM: Chemical additives for boiler optimization; projected full-year 2025 segment revenue is estimated between $16.5 million to $17 million.
• DGI systems: Dissolved Gas Infusion for water treatment, capable of handling 10 - 10,000 lbs of oxygen per day.
• Advanced Process Control (APC): Supported by custom Computational Fluid Dynamics (CFD) models and proprietary visualization software.

The specialized engineering and technical personnel are the human capital that designs, models, and supports every installation. Their ability to use proprietary software to generate custom process models for every product installation is a key differentiator, ensuring optimized performance for complex combustion flows and chemical injection strategies.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Value Propositions

You're looking at the core reasons customers choose Fuel Tech, Inc. (FTEK) over alternatives; these are the tangible benefits they deliver across their technology segments as of late 2025.

Emissions compliance for utility and industrial facilities (e.g., $\text{NO}_{\text{x}}$ reduction)

The primary value here is helping industrial and utility operators meet increasingly strict environmental mandates, particularly around nitrogen oxide ($\text{NO}_{\text{x}}$) emissions. Fuel Tech, Inc. has installed its $\text{NO}_{\text{x}}$ reduction and particulate control technologies on over 1,300 utility, industrial, and municipal units worldwide. This installed base provides a foundation for ongoing service and aftermarket revenue. For instance, recent Air Pollution Control (APC) orders announced in Q3 2025 totaled \$3.2 million across the US, Europe, and Southeast Asia. The APC segment backlog stood at \$9.5 million at September 30, 2025, showing a healthy pipeline of future compliance projects. Management is actively targeting a sizable data center-related pipeline, estimating 8-10 opportunities valued between \$80 million and \$100 million for Selective Catalytic Reduction (SCR) $\text{NO}_{\text{x}}$ control. This focus on high-growth areas like data centers is a key near-term opportunity.

Improved boiler efficiency and reliability via FUEL CHEM chemical applications

The FUEL CHEM® business segment delivers value through process optimization and chemical applications that enhance boiler performance and reliability. This segment showed strong momentum in 2025, with Q3 revenue hitting \$4.8 million. That follows a massive 92% rise in FUEL CHEM segment revenue to \$5.1 million in the first quarter of 2025. The gross margin for this segment in Q3 2025 expanded to 49.8%, reflecting good operational leverage. A significant new value driver is a commercially-priced, six-month demonstration program that started in October 2025 at a coal-fired unit, which carries an estimated annual revenue potential of \$2.5 to \$3.0 million if the customer runs the program full-time. Management expects the full-year 2025 FUEL CHEM segment revenues to be the highest since 2022.

Cost-effective, customized solutions for complex air pollution control challenges

Fuel Tech, Inc. provides tailored engineering to tackle difficult pollution control scenarios, often making solutions more economical than alternatives. The ULTRA® process, for example, offers the safe and cost-effective on-site conversion of urea to ammonia for use in SCR systems, which avoids the logistical hazards of transporting and storing anhydrous or aqueous ammonia. To further enhance its portfolio of customized APC offerings, Fuel Tech, Inc. completed a small strategic acquisition of intellectual property from Wahlco, Inc. for a total cash consideration of \$350,000 subsequent to the third quarter of 2025. This acquisition brings in technology applicable to flue gas conditioning systems and ammonia handling equipment for various industrial applications.

New Dissolved Gas Infusion (DGI) systems for water and wastewater treatment

For water and wastewater challenges, the Dissolved Gas Infusion (DGI) systems represent a growing area of value. While financial specifics for DGI are less detailed in the latest reports, progress is noted through active commercial outreach and demonstrations. For instance, the company was preparing to showcase its DGI® technology at Aquaculture 2025 in New Orleans in March 2025, and upcoming demonstrations were anticipated at a fish hatchery, which helps build product visibility in this sector. This technology offers a distinct value proposition in the water treatment space.

Here's a quick look at some key financial and operational metrics supporting these value propositions as of late 2025:

The company ended Q3 2025 with \$33.8 million in cash and investments and no debt, which definitely provides the financial flexibility to deliver on these complex, customized solutions. If onboarding for the new data center opportunities takes longer than expected, the reliance on the steady FUEL CHEM revenue stream becomes even more critical for near-term stability.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Customer Relationships

You're looking at how Fuel Tech, Inc. (FTEK) manages its connections with customers, which heavily relies on deep technical engagement for complex engineering work and consistent supply for chemical services. This isn't a simple transaction business; it's about long-term technical partnership.

High-touch, consultative sales process for complex APC engineering projects

The Air Pollution Control (APC) segment involves selling complex engineering solutions, which necessitates a highly consultative approach. This relationship style is evidenced by the growth in their committed work pipeline. The APC segment backlog stood at $9.5 million as of September 30, 2025, a clear increase from $7.8 million at June 30, 2025. Furthermore, in August 2025, Fuel Tech, Inc. announced new APC awards totaling $3.2 million from both new and existing clients across the U.S., Europe, and Southeast Asia. For emerging opportunities, the pipeline for bids related to emissions control for AI data centers was quantified at approximately $100 million as of Q2 2025.

Long-term, recurring service contracts for FUEL CHEM chemical supply and support

The FUEL CHEM segment is the core of Fuel Tech, Inc.'s recurring revenue base, driven by ongoing chemical supply and support. For the third quarter of 2025, FUEL CHEM segment revenue reached $4.8 million. Management projects that the full-year 2025 FUEL CHEM segment revenue will reach $16.5 million to $17 million, which would be the highest level since 2022. This segment showed strong growth early in the year, with Q1 2025 revenue rising 92% to $5.1 million.

Commercially-priced demonstration programs for new customers (e.g., 6-month FUEL CHEM demo)

Fuel Tech, Inc. actively uses demonstration programs to convert prospects into long-term chemical supply customers. In October 2025, equipment was installed for a new FUEL CHEM customer in the U.S. to begin a commercially-priced demonstration program expected to last for six months. The projected annual revenue potential from this single commercial contract, assuming the customer runs the program full-time, is estimated to be approximately $2.5 to $3.0 million.

Dedicated aftermarket support for installed systems and parts

The company views its installed base as a direct driver for future revenue streams through servicing and parts. Fuel Tech, Inc. explicitly includes customer installation and aftermarket market data in its portfolio, believing this data will generate accretive aftermarket revenues.

Here's a quick look at the key financial metrics underpinning these customer relationships as of late 2025:

The FUEL CHEM segment's gross margin in Q3 2025 was 49.8%, reflecting the increased volume of sales activity. The company's overall consolidated gross margin for Q3 2025 expanded to 48.9% of revenues, up from 43.4% in Q3 2024.

• New APC awards announced in August 2025: $3.2 million.
• New FUEL CHEM demonstration program duration: six months.
• FUEL CHEM Q1 2025 revenue growth: 92%.
• APC segment backlog growth from end of 2024 to Q3 2025: From $6.2 million to $9.5 million.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Channels

The channels Fuel Tech, Inc. (FTEK) uses to reach its customer segments are multifaceted, blending direct engagement for large projects with established chemical sales routes.

Direct sales force for major utility and industrial contracts in the U.S.

• Direct engagement supports the Air Pollution Control (APC) business, which saw new awards announced in August totaling $3.2 million from U.S. and international customers.
• A demonstration program for a new FUEL CHEM customer in the U.S. recently commenced in October, with an expected annual revenue potential of $2.5 to $3.0 million based on full-time running.
• The company is pursuing opportunities in the power generation sector, with multiple bids outstanding for its SCR technology.

International sales offices and representatives in Europe and Southeast Asia

Fuel Tech, Inc. (FTEK) maintains a physical presence to support its global customer base, alongside utilizing representatives.

Direct engagement with power generation companies for data center projects

This represents a key growth vector for the APC segment, leveraging existing technology for new power demands.

• Fuel Tech, Inc. (FTEK) is actively pursuing opportunities in emissions control for AI data centers.
• The current bid pipeline for these data center-related opportunities is approximately $100 million.
• The company revised its full-year 2025 revenue guidance to a range of $28,000,000 to $29,000,000, which excludes material contributions from data center contract awards.

Aftermarket sales channel for spare parts and chemical refills

The aftermarket channel is supported by the FUEL CHEM® segment, which is expected to have a strong year.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Fuel Tech, Inc. (FTEK) as of late 2025, which is split between their Air Pollution Control (APC) and FUEL CHEM® segments, plus emerging opportunities with their DGI® water treatment technology. The company is focused on expanding relationships across these groups, which is reflected in their backlog growth.

The consolidated APC segment backlog stood at $9.5 million as of September 30, 2025, up from $7.8 million at the end of the second quarter. This backlog growth is key because it represents future revenue from these customer types, even though APC segment revenue declined quarter-over-quarter to $2.7 million in Q3 2025 due to project timing.

Domestic and international electric utility companies

Electric utility companies are a primary target for the APC segment, particularly for nitrogen oxide (NOx) reduction systems. The company has installed its NOxOUT technology on over 1,300 units worldwide.

The customer base includes international utility players, as evidenced by an order from Japan for an ULTRA® system on a natural gas-fired Combined Cycle utility plant.

Industrial facilities with combustion sources (e.g., refineries, cement plants)

Industrial facilities rely on the FUEL CHEM® segment to improve combustion unit efficiency, tackling issues like slagging and corrosion. This segment is the steady performer right now. FUEL CHEM® segment revenue for the third quarter of 2025 reached $4.8 million, up from $4.6 million in the prior year period. Management projects the full-year 2025 FUEL CHEM® segment revenue to be between $16.5 million and $17 million, which would be the highest level since 2022.

New business development in Q3 2025 included announcing $3.2 million of new APC awards from new and existing clients across the U.S., Europe, and Southeast Asia.

Power generation facilities supporting new data centers and public utilities

This is a significant near-term growth vector for Fuel Tech, Inc. The company is actively pursuing new contract opportunities in the power generation sector specifically to support the rising demand from data centers. They have multiple bids outstanding for their Selective Catalytic Reduction (SCR) technology to address the emissions control requirements for AI-related data centers planned for the U.S..

The overall projected full-year 2025 consolidated revenue for Fuel Tech, Inc. is approximately $27 million, representing an 8% increase over 2024, which is contingent on securing these strategic awards.

Municipal and industrial water/wastewater treatment plants (for DGI technology)

The DGI® Dissolved Gas Infusion Systems target water treatment applications beyond traditional utility and industrial combustion control. The technology is being showcased for its potential in municipal and industrial wastewater, food and beverage, petrochemical, and landfill leachate treatment.

A concrete example of this segment engagement is the extended demonstration of DGI technology selected by a state government agency at a Midwest U.S. fish hatchery. This demonstration is scheduled to last up to 12 months, starting in Q1 2025.

The customer base for APC technologies also includes municipal clients, as seen by a domestic order received from an existing municipal waste unit customer in the Northeast for an Advanced Selective Non-Catalytic Reduction (ASNCR) system.

The company's overall financial health supports pursuing these segments, ending Q3 2025 with nearly $34 million in cash and investments and no long-term debt.

• APC segment backlog growth in Q3 2025 was over 20% from June 30, 2025.
• New APC awards announced in Q3 2025 totaled $3.2 million.
• A new FUEL CHEM® demonstration has an estimated annual revenue potential of $2.5 million to $3.0 million if adopted full-time.
• The DGI demonstration at the hatchery is scheduled to last up to 12 months.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Cost Structure

You're looking at the core expenses that drive Fuel Tech, Inc. (FTEK)'s operations as of late 2025. Understanding these costs is key to seeing how they turn revenue into profit.

The primary variable cost is the Cost of Goods Sold (COGS), which covers the direct costs associated with producing the Air Pollution Control (APC) equipment and the FUEL CHEM chemicals. Based on the third quarter of 2025 performance, the COGS was approximately $3,832,500, derived from the reported $7.5 million in consolidated revenues and the resulting 48.9% gross margin for the period. This margin reflects strong profitability on the delivered products and services for APC equipment and FUEL CHEM chemicals.

Fixed and semi-fixed operating costs are broken down into two main buckets. Selling, General, and Administrative (SG&A) expenses were reported at $3.2 million for Q3 2025. Honestly, this figure was consistent with the prior year period, but as a percentage of the lower Q3 2025 revenue, it represented about 43% of that quarter's sales.

Investment in future offerings, specifically Research and Development (R&D), is a critical cost area. For the third quarter of 2025, R&D expenses rose to $450,000. This spending reflects an ongoing commitment to advancing technologies like the Dissolved Gas Infusion (DGI) systems.

Personnel costs are embedded within both SG&A and R&D, but they represent a significant component of the overall cost structure, especially given the nature of Fuel Tech, Inc.'s business. You need specialized talent for this work.

• Personnel costs include specialized engineers for complex APC system design.
• Field service technicians are essential for FUEL CHEM dispatch and equipment maintenance.
• R&D spending directly funds the technical teams developing new water and wastewater treatment solutions.

Here's a quick look at the key Q3 2025 cost structure components:

What this estimate hides, of course, is the exact split of personnel costs between the operating expense categories, but the total R&D and SG&A give you the overhead picture. Finance: draft 13-week cash view by Friday.

Fuel Tech, Inc. (FTEK) - Canvas Business Model: Revenue Streams

You're looking at the hard numbers that drive Fuel Tech, Inc. (FTEK) right now, specifically how the money comes in across their two main segments as of late 2025. It's all about project execution timing and recurring chemical sales.

The revenue streams are clearly segmented between Air Pollution Control (APC) and FUEL CHEM technologies. Here's the breakdown from the third quarter ended September 30, 2025:

• APC segment revenue from project-based system sales and installation was $\mathbf{\$2.7 \text{ million}}$ in Q3 2025.
• FUEL CHEM segment revenue from recurring chemical sales and service contracts hit $\mathbf{\$4.8 \text{ million}}$ in Q3 2025.

Consolidated revenue for the third quarter was $\mathbf{\$7.5 \text{ million}}$.

The APC segment's future revenue visibility is captured in the backlog, which is a key indicator for project-based work. You want to see that pipeline converting.

• Revenue from new APC awards, with a backlog of $\mathbf{\$9.5 \text{ million}}$ as of September 30, 2025.
• The company announced $\mathbf{\$3.2 \text{ million}}$ of new APC awards during August.

Here's a quick look at how that backlog breaks down as of September 30, 2025:

The FUEL CHEM segment is showing strength in recurring revenue, with management raising full-year expectations. Also, new commercial programs offer a clear upside potential. This is where the recurring nature of the business helps smooth out the lumpiness of APC projects.

Potential revenue from new commercial demonstration programs is estimated at $\mathbf{\$2.5 \text{ million}}$ to $\mathbf{\$3.0 \text{ million}}$ annual potential.

Looking at the full-year 2025 projections based on Q3 results, the revenue picture is clearer:

• FUEL CHEM segment revenues for full-year 2025 are expected to reach $\mathbf{\$16.5 \text{ million}}$ to $\mathbf{\$17 \text{ million}}$.
• The base case for consolidated 2025 revenue is approximately $\mathbf{\$27 \text{ million}}$.

Finance: draft 13-week cash view by Friday.