Carbonxt Group Limited (ASX: CG1) (“Carbonxt” or “the Company”) has released its half-year results for the period ended 31 December 2025, reporting revenue of $8.50 million, a 15.7% increase on HY25’s $7.35 million. The result reflects continued contracted sales coverage, an improved product mix, and tighter cost management across the business.
The headline numbers tell a steady story. Gross margins reached 54% for the half, up five percentage points from 49% in the prior corresponding period. Net cash from operating activities turned positive at $0.66 million for the period.
These figures arrive as the Company’s flagship Kentucky activated carbon facility edges closer to sustained commercial output, a milestone that management expects will materially change the scale of Carbonxt’s business.
Revenue and Margin Performance
Carbonxt reported total revenue of $8.50 million, split across two quarters: $4.50 million in Q1 FY26 and $3.83 million in Q2 FY26.
The lower Q2 figure reflects a temporary maintenance outage at the Company’s Black Birch facility in Georgia, which disrupted Activated Carbon Pellet (ACP) deliveries by approximately $0.9 million. The Company has confirmed that those deferred volumes are being recovered in Q3 FY26 under existing contracts.
Figure 1: Financial Overview [Carbonxt Group Ltd]
The swing to positive underlying EBITDA of $0.11 million, from a loss of $0.69 million in HY25, is a meaningful shift. It reflects the cumulative effect of pricing discipline, improved product mix, and cost containment measures put in place over the past 12 months.
Powdered Activated Carbon (PAC) contributed approximately 57% of revenue across the half, supported by ongoing deliveries under the long-term ReWorld contract. ACP accounted for the remaining 43%, with Q1 showing strong growth in both sales volumes and tonnes sold before the Black Birch outage weighed on Q2 output.
Kentucky: The Facility That Changes the Numbers
The Kentucky activated carbon facility is the central piece of Carbonxt’s growth story, and HY26 brought the project meaningfully closer to commercial production.
During the period:
- Kiln construction was completed, and the refractory lining was heat-treated
- Back-end infrastructure – bagging lines, conveyors, and additional storage silos – was installed and integrated
- An on-site power station was brought online to support commissioning activities
- Remediation works to support reliable commissioning and system redundancy were advanced
Once fully operational, the Kentucky plant carries an initial capacity of 10,000 tonnes per annum, with a pathway to double that to 20,000 tonnes per annum for a modest incremental investment. The Company forecasts that a fully running Kentucky facility would increase group sales by approximately 200% and open the door to the significantly larger liquid-phase activated carbon market, an area where Carbonxt currently has limited exposure.
The Company also increased its ownership interest in New Carbon Processing, LLC, the entity operating the Kentucky plant, to 46.7%, following a US$750,000 funding in October 2025 and a $600,000 placement in January 2026. Carbonxt has stated its objective of securing a 50% interest in the venture.
Figure 2: The Kentucky activated carbon facility advancing toward initial commercial output, with an initial capacity of 10,000 tonnes per annum. [Carbonxt Group]
Managing Director’s Comments
Carbonxt Managing Director Warren Murphy commented on the half-year result:
“HY26 reflects a materially improved margin profile and stronger contracted sales position compared to the prior corresponding period. While ACP deliveries were temporarily deferred in Q2 FY26 due to a maintenance outage at Black Birch, these contracted volumes are being recovered in Q3 FY26.”
Murphy noted progress on the Kentucky facility: “With back-end infrastructure installed and onsite power now operational, the facility is moving toward initial commercial output.”
He pointed to regulatory tailwinds as a continued driver: “Regulatory momentum from tightening US EPA PFAS standards continues to support demand across our core markets. The Company remains focused on commissioning, customer qualification, and conversion of contracted opportunities into sustained revenue growth.”
Figure 3: Warren Murphy, Managing Director at Carbonxt, Inc. [LinkedIn]
Balance Sheet and Corporate Activity
Cash and cash equivalents stood at $1.27 million as of 31 December 2025. The Company’s debt facility with Pure Asset Management sits at $15.0 million drawn, with a 9.5% interest rate and a maturity date of 31 May 2027.
The HY26 report includes a going concern disclosure, arising from covenant breaches under the Pure Asset Management facility. The breaches occurred after the Group’s cash balance dipped below the minimum threshold and it was unable to satisfy a Net Debt to EBITDA ratio, primarily because the Kentucky facility is not yet generating revenue.
The lender has provided a formal waiver of those breaches until September 2026. Carbonxt’s board and management are progressing with the commissioning of the Kentucky plant as the primary resolution pathway.
During the half, the Company completed several corporate actions to shore up its capital position:
- Raised $587,769 via an underwritten non-renounceable entitlement offer issuing 58.8 million Loyalty Options
- Issued 11.0 million Loyalty Options to directors in lieu of $110,000 in fees
- Raised $600,000 via a placement of 8.0 million shares at $0.075 per share to major shareholder Phelbe Pty Ltd
- Issued 400,000 convertible notes at $1.00 each, convertible into 5.0 million shares at $0.08 per share
- Raised a further $600,000 via a share placement at $0.09 per share, with proceeds directed to working capital and investment in New Carbon Processing, LLC
Why the Regulatory Backdrop Matters
Carbonxt operates in a market shaped by government policy, and the regulatory environment is becoming more demanding, not less.
The global activated carbon market is estimated at USD 4.16 billion in 2026, forecast to reach USD 5.47 billion by 2031, expanding at a compound annual growth rate of 5.62%. The US EPA’s PFAS drinking water standards, which set parts-per-trillion limits for six PFAS compounds, are forcing hundreds of utilities to lock in multi-year activated carbon supply contracts. Reporting obligations under the TSCA PFAS Reporting Rule are now expected to run from April through October 2026, intensifying compliance activity across the industry.
Figure 4: The global activated carbon market is forecast to expand at a CAGR of 5.62% through 2031, driven by tightening PFAS standards and mercury control mandates. [Mordor Intelligence]
The US EPA’s PFAS rule has prompted a wave of granular activated carbon retrofits across hundreds of utilities. This trend directly supports Carbonxt’s PAC and ACP product lines and underpins the strategic rationale for the Kentucky facility’s entry into the liquid-phase activated carbon segment.
The global PFAS filtration market is projected to reach USD 3.22 billion by 2030 from USD 2.28 billion in 2025, growing at a CAGR of 7.18%. Activated carbon remains the leading treatment technology for PFAS remediation, owing to its adsorption capacity, scalability, and relative operational simplicity. Carbonxt is positioned within this space through its ReWorld contract and growing industrial client base.
Operational Highlights at a Glance
- ACP Sales: Up 11.0% in Q1 FY26 with tonnes sold increasing by 6.9%. Q2 ACP sales declined 29.4% due to the Black Birch maintenance outage, with deferred volumes contracted for recovery in Q3 FY26
- PAC Sales: Remained steady and supported by the multi-year ReWorld contract
- Gross Margin: 54% for the half, the highest reported margin in recent periods
- Operating Cash Flow: Positive $0.66 million for the half-year, compared to a net outflow in the prior period
- Kentucky Ownership: Increased to 46.7%, progressing toward the stated 50% target
Investor’s Outlook
As of 27 February 2026, Carbonxt Group Limited (ASX: CG1) shares are trading at approximately $0.087 per share. The stock has delivered a gain of approximately 45% over the past year, reflecting improving operational momentum and growing market interest in cleantech companies exposed to regulatory-driven demand.
Key Market Data:
- Current Price: $0.087 per share
- 52-Week Range: $0.043 – $0.115 per share
- Market Capitalisation: Approximately $38.56 million
Figure 5: CG1 Price Chart [ASX]
The Company’s near-term outlook hinges on two variables: the successful commissioning of the Kentucky facility and the recovery of deferred ACP volumes in Q3 FY26. Management has confirmed both are on track. With the lender waiver extending to September 2026, the Company has the runway to convert operational progress into financial results.
The Kentucky plant, once operational, represents a step-change in the scale of Carbonxt’s business. Its 200% revenue uplift forecast and access to the liquid-phase carbon market position the facility as the primary catalyst for the next phase of growth.
