Carbonxt Group Limited (ASX: CG1) (“Carbonxt” or the “Company”) has reported a stronger financial position and important operational progress in its FY26 results, highlighted by the Company’s first positive operating cash flow.
For the year ended 30 June 2026, Carbonxt generated $0.49 million in net cash from operating activities, a significant improvement from the $4.75 million operating cash outflow recorded in FY25. Customer receipts also increased to $17.0 million, compared with $11.6 million in the previous financial year.
The result indicates that Carbonxt’s established operations funded themselves through operating cash flow for the first full year, providing an important foundation as the Company prepares to bring its Kentucky activated carbon facility into production.
Figure 1: The Kentucky facility, designed to meet the growing demand for advanced PFAS removal technology across American water utilities. [Carbonxt Group Limited]
Key FY26 highlights from the announcement included:
- $0.49 million positive operating cash flow, compared with a $4.75 million outflow in FY25.
- 5% reduction in loss before tax to $4.6 million.
- US$10.6 million revenue, up 1.4% in US dollar terms.
- $17.0 million in customer receipts, up from $11.6 million.
- Progress towards commissioning the Kentucky activated carbon facility.
- A potential A$11 million cash injection and approximately A$5 million net debt reduction through the proposed balance sheet restructure.
Revenue Remains Resilient Despite Currency Impact
Carbonxt recorded FY26 revenue of $15.7 million, representing a 3.1% decline from $16.2 million in FY25 when reported in Australian dollars. However, the underlying revenue performance remained resilient because substantially all of the Company’s revenue comes from the US market.
In US dollar terms, revenue increased 1.4% to US$10.6 million, compared with US$10.5 million in FY25. The Australian-dollar decline therefore primarily reflected the lower AUD/USD exchange rate rather than weaker underlying sales.
Carbonxt reported a gross margin of $7.4 million, equal to 47.3% of revenue. Although this was below the 52.4% margin achieved in FY25, the Company delivered a stronger 52.4% gross margin in the June 2026 quarter, suggesting improving performance towards the end of the financial year.
Operating expenses also fell 8.1% to $6.6 million, demonstrating tighter cost management across the business.
The Company’s underlying EBITDA loss increased to $1.0 million from $0.5 million in FY25, largely reflecting a full year of Kentucky-related overheads before the facility generated revenue and $0.4 million in costs associated with relocating the Minnesota pellet plant.
| Financial Metric | FY26 | FY25 |
|---|---|---|
| Revenue | $15.7m | $16.2m |
| Gross Margin | $7.4m | $8.5m |
| Operating Expenses | $6.6m | $7.2m |
| Underlying EBITDA | $(1.0)m | $(0.5)m |
| Loss Before Tax | $(4.6)m | $(6.8)m |
Kentucky Facility Moves Towards Commissioning
The Kentucky activated carbon facility remains Carbonxt’s most important operational milestone.
During FY26, the Company completed the kiln construction, installed the refractory lining and undertook heat treatment. It also completed the back-end infrastructure, including the bagging station, conveyors, additional storage silos and onsite power station. All external works have now been completed.
Carbonxt initially targeted first revenue from Kentucky in early calendar 2026 but did not meet that timetable. Early commissioning identified remediation requirements within the kiln, while further inspections identified equipment that required replacement or repair.
The kiln manufacturer agreed to replace the affected equipment at its own cost. All replacement parts have now arrived at the site and Carbonxt is individually re-testing each component before installation.
The kiln manufacturer has also been onsite since 24 August 2026 to finalise electrical works with Kentucky Carbon Processing. Carbonxt is replacing all associated wiring as a precaution.
The next milestones for Kentucky are:
- Completion of the remaining kiln construction works.
- Commissioning of the facility.
- Independent engineer certification confirming the plant is operational.
- Achievement of the initial US$1 million revenue milestone.
The significance of Kentucky extends beyond additional production capacity. Once operational, Carbonxt forecasts that the facility could increase Group sales by approximately 200% over the following two years while giving the Company entry into the liquid-phase activated carbon market, which Carbonxt says is several times larger than its existing air-phase market.
PAC and ACP Operations Provide a Growing Revenue Base
Carbonxt continued to strengthen its established Powdered Activated Carbon (PAC) and Activated Carbon Pellets (ACP) operations during FY26.
PAC accounted for 53% of Group revenue and 66% of volume, marking the first year in which powdered activated carbon represented a majority of Group revenue. Long-term contracts, including the Company’s relationship with ReWorld, underpin PAC volumes and provide a stable base of contracted revenue.
Figure 2: Carbonxt Group Limited volume and revenue breakdown from FY2022 to FY2026. The charts illustrate the steady strategic transition toward powdered products over the last five fiscal years. [Carbonxt Group Limited]
PAC sales increased 10% in the June 2026 quarter compared with the previous quarter as volumes with Carbonxt’s largest PAC customer returned to prior levels.
ACP also delivered a strong recovery during the second half. June-quarter sales rose 37% compared with the March quarter following the resolution of a maintenance outage at the Black Birch plant that had affected bagged input material for the pellet operation.
Carbonxt also extended a principal ACP customer contract for three years on improved pricing and payment terms. The Company expects annual revenue from that contract to increase by more than 30%, while indicated volume increases could contribute approximately $2.0 million of additional FY27 revenue.
The Company also received its first purchase order from a new customer for a new ACP product entering a new market segment. The product performed well, and discussions are progressing towards a potential long-term supply agreement.
Figure 3: A graphic illustrating Carbonxt’s two established product categories, PAC and ACP, with their principal applications.
Minnesota Relocation to Reduce Operating Costs
Carbonxt has also moved to improve the economics of its Minnesota pellet operations.
The Company agreed to relocate the Minnesota pellet plant to a new site, with the move expected to reduce monthly operating costs by more than US$10,000. The new location will also support future expansion at a significantly lower cost.
Carbonxt expects to complete the relocation during the September 2026 quarter.
Balance Sheet Restructure Could Strengthen the Company
Carbonxt has also progressed a two-stage balance sheet restructure with Phelbe Pty Ltd and Pure Asset Management.
Stage 1 was completed on 3 July 2026 and comprised A$3.5 million of new convertible notes, including A$2.0 million in new cash from Phelbe and A$1.5 million from Pure, which was set off against senior debt and accrued interest.
Stage 2 remains subject to shareholder approval and several conditions, including Carbonxt’s share price closing at or above $0.09 for five consecutive trading days before 31 December 2026 and the commencement of Kentucky operations.
If those conditions are satisfied, Pure’s approximately A$5.0 million proceeds would reduce the senior facility from A$15.0 million to approximately A$10.0 million, with the plan targeting a total cash injection of up to A$11 million and a net debt reduction of approximately A$5 million.
An Extraordinary General Meeting is expected in late September 2026.
US PFAS Market Supports Long-Term Demand
Carbonxt continues to operate against a supportive regulatory backdrop in the US.
In May 2026, the US Environmental Protection Agency proposed maintaining Maximum Contaminant Levels for PFOA and PFOS at four parts per trillion, alongside an application-based two-year extension to the compliance deadline. The Company noted that neither proposal was final and that the PFOA and PFOS standards underpinning its addressable market remained unchanged.
The EPA also released nearly US$1 billion in additional grant funding for states addressing PFAS in drinking water. Carbonxt highlighted that activated carbon remains the most widely adopted technology for removing PFOA and PFOS at scale, while activated carbon demand is projected to grow at a 5–9% compound annual growth rate through 2030.
These market conditions provide Carbonxt with a potentially substantial long-term demand opportunity, particularly as the Kentucky facility would enable the Company to participate in the larger liquid-phase activated carbon market.
FY27 Priorities and Investors’ Outlook
Carbonxt enters FY27 with several important catalysts ahead. Its immediate focus remains on completing and commissioning the Kentucky facility, securing independent engineer certification and reaching the initial US$1 million revenue milestone.
The Company has identified five key priorities for FY27:
- Kentucky: Complete kiln construction, commissioning and independent certification.
- Balance sheet: Complete Stage 2 of the restructure and target senior debt of approximately A$10 million.
- ACP growth: Convert the new purchase order into a long-term supply agreement and deliver indicated volume increases.
- Minnesota: Complete the pellet plant relocation during the September 2026 quarter.
- Cash generation: Maintain the operational discipline that delivered positive operating cash flow in FY26.
Carbonxt Share Price Activity
| Metric | Performance |
|---|---|
| Last Price | $0.082 |
| 1 Week | +15.49% |
| 1 Year | +26.15% |
| vs ASX 200 (1yr) | +25.32% |
| Market Capitalisation | $35.53 million |
Carbonxt’s share price performance reflects growing market attention as the Company approaches several key operational and financing milestones. At $0.082, the stock remains below the $0.09 share price condition attached to Stage 2 of the balance sheet restructure, making the Kentucky commissioning timeline and subsequent operational delivery particularly important developments for investors.
The Company enters FY27 with several potential value drivers, including the Kentucky facility, stronger ACP volumes, an expanded customer contract, the proposed balance sheet restructuring and continued demand for activated carbon in PFAS treatment.
FY26 represented an important transition year for Carbonxt. The move into positive operating cash flow provides a stronger base, while Kentucky could materially expand the Company’s production capacity and addressable market once operational. The coming months therefore represent a critical period as Carbonxt seeks to convert its operational progress and financing initiatives into sustained growth.
Disclaimer
This article has been prepared by Colitco in collaboration with Carbonxt Group Limited as part of a commercial content and investor communications arrangement. Colitco may receive compensation for the production and distribution of this content. This article is intended for informational purposes only and does not constitute financial product advice, investment advice, or a recommendation to buy or sell any securities. The content reflects information available at the time of publication and may not be updated. All figures, data and statements have been sourced from Carbonxt Group Limited’s official ASX announcements and publicly available sources. Readers should conduct their own independent research and seek professional financial advice before making any investment decisions. Past performance is not a reliable indicator of future results. Forward-looking statements are subject to risks and uncertainties, and actual results may differ materially from expectations.
Luke Carlino is a seasoned Copywriter, Content Strategist, and Social Media Manager specialising in Mining, Finance, and Business journalism. With more than a decade of industry experience, he brings rigorous editorial standards and commercial acuity to every project.
