What you need to know: • BQE reported Q1 financial results that largely smashed our estimates across the board due to rapid growth in its technical services segment. • Q1 proportional revenue came in at $7.9M (+133% YoY), beating our estimate of $3.9M. Adjusted EBITDA was $1.9M (24% margin) compared to our estimate of breakeven (0% margin). • Management is expecting continued strong financial results over the next two quarters due to good visibility into the operations and technical services segments. Yesterday after market close, BQE Water (BQE:TSXV, BTQNF:OTC) reported Q1 financials that largely beat our expected numbers due to strong performance from its technical services segment. The quarter was BQE’s best Q1 in its history. As such, BQE remains one of our highest-conviction ideas in our coverage universe with potential for the trifecta of earnings growth multiple expansion, and strategic capital allocation. We are maintaining our BUY rating and $80.00/share target price on BQE Water. Key Highlights • Q1 proportional revenue came in at $7.9M (+133% YoY) vs. our estimate of $3.9M. This was comprised of $2.0M in operations services revenue (+10% YoY), $5.5M in technical services revenue (+663% YoY), and $0.5M in BQE’s share of JV revenue (-44% YoY). • As for the operations services segment, no new operations were added to the existing portfolio of plants. • The projects contributing to the major growth in technical services included the design and construction of the Valley Tailings plant in the Yukon, advisory and treatment services for the Eagle Gold Mine, detailed design of a sulphate removal plant that will go into construction in B.C., and the detailed design of a cyanide removal plant in the U.S. • Gross margin was 43% vs. our estimate of 44% and 44% in Q1/24. • Adjusted EBITDA for the quarter was $1.9M vs. our estimate of ($0.0M). This represents a 24% margin compared to (4%) in Q1/24. • BQE’s share of JV net income was $0.1M, compared to $0.3M in Q1/24. • Net income was $1.7M vs. our estimate of ($0.3M) and ($0.5M) in Q1/24. • The Company ended the quarter with $11.1M in cash after generating $1.7M in OCF (before WC). BQE ended the quarter with $2.2M in debt.