Carbonxt Group Limited (ASX: CG1) (Carbonxt or the Company) has delivered a solid December 2025 quarter, recording customer receipts of $3.8 million and advancing its transformational Kentucky activated carbon facility toward commissioning. The Company reported a 72% increase in revenue compared to the same quarter of FY25, reflecting growing demand for its Powdered Activated Carbon (PAC) products amid tightening U.S. environmental regulations.
The quarter was characterised by operational consistency despite temporary production challenges, with the Company maintaining positive monthly EBITDA across the period. Carbonxt’s strategic focus on high-margin contracts and its expanding footprint in the U.S. critical minerals market positions the business for material growth in calendar 2026.
Figure 1: Carbonxt’s Kentucky activated carbon facility nearing completion, set to increase group capacity by approximately 200% once operational. [Carbonxt Group]
Financial Performance Reflects Strengthening Market Position
Carbonxt reported quarterly customer receipts of $3.8 million, up from $2.2 million in the September quarter. This represents a 72% increase on the prior comparative period, demonstrating strong underlying demand for the Company’s environmental products.
Operating cash outflow for the quarter was $177k, compared to positive cash flow of $583k in the prior quarter. The Company noted this was primarily due to approximately $900k in Activated Carbon Pellet (ACP) sales being deferred into the March quarter following a maintenance outage at the Black Birch facility. All deferred contracted sales are expected to be delivered in the current quarter.
Key financial highlights include:
- Customer receipts: $3.8 million (up 72% YoY)
- Gross margins: 58.8% in the December quarter
- Cash position: $1.27 million as at 31 December 2025
- Positive monthly EBITDA throughout the quarter (unaudited management accounts)
- Full year profitability expected for FY26
PAC sales remained robust, supported by deliveries under the multi-year ReWorld contract secured earlier in 2025. The $24 million, four-year agreement continues to underpin consistent revenue streams for the Company’s Georgia-based operations.
Figure 2: Carbonxt’s customer receipts trending upward with 72% year-on-year growth in December quarter 2025 [Carbonxt Group]
Kentucky Facility Advances Toward Commercial Production
Carbonxt continued to progress its strategic investment in New Carbon Processing, LLC during the quarter, bringing its ownership stake to 46.7% following a $600k placement completed in January 2026. The Company is advancing toward its stated objective of securing a 50% interest in the facility.
Construction milestones achieved include:
- Completion of kiln construction with enhanced thermal insulation
- Installation of refractory lining and initial heat treatment
- Commissioning of back-end infrastructure, including bagging lines and storage silos
- On-site power station brought online to support operations
- Additional steam capacityis being installed for operational flexibility
The Kentucky facility represents a transformational asset for Carbonxt. Once operational, it is forecast to increase group sales by approximately 200% and provide entry into the liquid-phase activated carbon market, which is several times larger than the Company’s traditional air-phase segment.
Managing Director Warren Murphy commented: “The Company and its joint venture partners are looking forward to the start-up of the state-of-the-art Kentucky facility. The overall Activated Carbon market remains strong with significant industry tailwinds in place.”
As commissioning activities progress, the Company is focused on producing qualification samples for customer testing and advancing toward initial commercial output. First revenues from the Kentucky facility are targeted for early 2026.
Figure 3: Kiln construction completed at the Kentucky facility, with remediation works underway to support reliable commissioning campaigns. [Carbonxt Group]
PFAS Regulations Provide Sustained Market Tailwinds
Carbonxt’s operational momentum coincides with strengthening regulatory drivers across the U.S. water treatment sector. In May 2025, the U.S. Environmental Protection Agency (EPA) confirmed it will retain strict Maximum Contaminant Levels (MCLs) for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) at 4 parts per trillion (ppt).
While the EPA proposed extending compliance deadlines from 2029 to 2031, the regulatory framework continues to drive long-term capital investment by U.S. water utilities. Public water systems must complete initial PFAS monitoring by 2027, creating sustained procurement activity for activated carbon solutions well into the next decade.
Market dynamics are compelling:
- The global activated carbon market is projected to grow from USD $5.86 billion in 2025 to USD $11.09 billion by 2033, representing a CAGR of 8.3%
- The water treatment segment accounts for approximately 42.5% of global demand, driven by PFAS and emerging contaminant regulations
- The PFAS filtration market alone is expected to expand from USD $2.28 billion in 2025 to USD $3.22 billion by 2030, at a CAGR of 7.18%
- North America represents approximately 25.7% of the global activated carbon market, supported by stringent EPA regulations
Granular Activated Carbon (GAC) has been designated as Best Available Technology under EPA guidelines, with validated removal efficiencies surpassing 99% for PFOA and PFOS. PAC products like those manufactured by Carbonxt remain critical for mercury emission control and provide rapid deployment capabilities for municipal water systems.
“The PFAS drinking water standards have reaffirmed planning and procurement activity across the U.S. water sector, underpinning sustained demand for high-performance activated carbon solutions,” the Company stated in its quarterly report.
Figure 4: Global activated carbon market projections [Grand View Research]
Strategic Advantages as Domestic U.S. Producer
Carbonxt’s U.S.-based manufacturing operations provide significant competitive advantages as trade policy discussions intensify. As a domestic producer, the Company is well-positioned to supply utilities and industrial clients seeking tariff-free, reliable supply chains.
Industry estimates suggest that 20-25% of annual U.S. activated carbon demand, equivalent to approximately 70,000-80,000 tonnes, is currently met through imports from China, India, and Sri Lanka. A shift toward expanded tariffs or strengthened “Buy American” policies would be highly favourable for domestic producers like Carbonxt.
The Company noted: “Carbonxt’s U.S.-based manufacturing operations position the Company to benefit from potential changes in trade policy, including proposed tariff expansions on imported activated carbon products.”
Post-Quarter Funding Strengthens Balance Sheet
Following the quarter end, Carbonxt completed a $600k placement to major shareholder Phelbe Pty Ltd and several high net-worth investors at $0.09 per share. Proceeds are being applied to working capital and a further US$250k investment in New Carbon Processing, LLC.
This followed an October 2025 capital raising that secured $1 million through a combination of convertible notes and share placement. Collectively, these funding initiatives strengthen Carbonxt’s balance sheet and support continued progress toward commercial production at the Kentucky facility.
As at 31 December 2025, Carbonxt held $1.27 million in cash and cash equivalents, with no corporate debt. The Company maintains a $15 million secured loan facility with Pure Asset Management, carrying a 9.5% interest rate and maturing on 31 May 2027.
Industry Insights: Activated Carbon Market Fundamentals
The activated carbon market continues to exhibit strong fundamentals, with operators and industry analysts estimating a 5-9% compound annual growth rate (CAGR) through 2030. Key drivers include:
- Regulatory Momentum: Tightening EPA standards for PFAS, mercury, and volatile organic compounds (VOCs) are creating multi-billion dollar investment cycles for municipal and industrial water systems.
- Technology Adoption: Activated carbon’s proven effectiveness, rapid deployment capabilities, and compatibility with existing infrastructure make it the preferred first-line treatment for emerging contaminants.
- Supply Chain Dynamics: Growing preference for domestic sourcing amid geopolitical uncertainties is benefiting U.S. producers with established manufacturing footprints.
The water treatment segment held 42.5% market share in 2024, driven by escalating global concerns over access to clean drinking water. Governments and regulatory bodies have introduced stricter discharge and potable water standards, accelerating deployment of activated carbon technologies across municipal utilities and industrial facilities.
Carbonxt’s product portfolio addresses both air-phase and liquid-phase applications, positioning the Company to capture demand across multiple high-growth market segments once the Kentucky facility achieves sustained production.
Figure 5: PFAS filtration and treatment media market projected to reach $8.2 billion by 2036, with granular activated carbon holding 32% market share. [Fact.MR]
Investor’s Outlook
Carbonxt Group Limited (ASX: CG1) continues to demonstrate operational progress and strategic positioning in a market characterised by strong regulatory tailwinds and growing environmental awareness.
Figure 6: CG1 Price Chart [ASX]
Stock Performance (as at 30 January 2026):
- Current Price: $0.090 per share
- 52-Week Range: $0.043 – $0.115
- Market Capitalisation: Approximately $38.99 million
The Company’s share price has outperformed the ASX All Ordinaries Index by approximately 43.72% over the past year, reflecting growing investor confidence in the activated carbon sector and Carbonxt’s strategic positioning.
With the Kentucky facility approaching commissioning, sustained PAC contract revenues, and favourable market conditions driven by PFAS regulations, Carbonxt is advancing toward a transformational period for the business. The Company’s lean cost structure, strengthened balance sheet, and expanding production capacity provide a platform for material revenue growth as the Kentucky facility transitions to commercial operations.
Warren Murphy added: “Another solid and consistent quarter reflected the much-improved cost base and contracted sales position of the Company compared to FY25. The Company and its joint venture partners are looking forward to the start-up of the state-of-the-art Kentucky facility. The overall Activated Carbon market remains strong with significant industry tailwinds in place.”
As PFAS compliance deadlines approach and U.S. water utilities accelerate infrastructure investments, Carbonxt’s strategic position as a domestic producer of high-performance activated carbon products continues to strengthen. The coming quarters will be critical as the Company progresses toward sustained production at Kentucky and capitalises on the expanding North American market opportunity.
