Arq Inc ( ARQ ) shares are surging after the company achieved positive net income for the first time in eight quarters.

The company reported fourth-quarter FY23 sales growth of 20% year-on-year to $28.104 million, beating the analyst consensus estimate of $27 million.

Gross margin for the quarter expanded by 2,440 basis points to 49.8%. The increase was driven by continued focus on profitability over volume, cost management, positive changes in product mix, and take-or-pay revenue.

Operating income was $3.1 million in the fourth quarter, compared to an operating loss of $(3.4) million last year. The operating margin was 11%.

Adjusted EBITDA was $7.2 million compared to an adjusted EBITDA loss of $(1.2) million a year ago.

The company held $45.4 million in cash and equivalents as of December 31, 2023.

The company reported a positive net income of $3.3 million in the quarter, reflecting the first positive net income quarter since the fourth quarter of 2021. EPS of $0.10 beat the consensus estimate of $(0.08).

“We delivered fourth quarter results that clearly evidence the improving profitability of our existing business,” said CEO Robert Rasmus.

Price Action: ARQ shares are trading higher by 40% at $4.859 on the last check Wednesday.