CPS Technologies Corporation Q3 FY2025 earnings call

• Delivered record revenue of $8.8 million for the third consecutive quarter, driven by increased customer demand and shipping volumes. • Announced a $15.5 million order for power module components. • Completed fifth and sixth federally funded research contracts in 2025, executing 3 Phase 2 SBIR programs. • Completed a secondary offering raising over $9.5 million, with management team and board members purchasing shares. • Plan to move to a larger manufacturing facility to accommodate growth, anticipating nearly double the usable floor space and completion in 2026. • Expanded technical team with a manufacturing engineer and a PhD in R&D. • Fulfilled first commercial order for ALMAX and made progress on radiation shielding solutions.

The third quarter saw CPS report total revenue of $8.8 million, a new record, more than doubling year-over-year from $4.2 million in Q3 2024. Gross profit was $1.5 million (approximately 17.1% of sales) compared to a gross loss of $0.5 million last year. Operating profit was about $276,000, and net income was just over $200,000. Cash and marketable securities ended the quarter at $3.2 million and $1.1 million respectively, with a recent secondary offering raising over $9.5 million in net proceeds.

• Q4 results unlikely to be record due to holidays, vendor/customer shutdowns. • Fiscal 2026 expected to remain strong. • Margins anticipated to improve with the $15.5 million power module contract. • Outlook for future growth remains positive with new contracts and expansion plans.

• Uncertainties including ongoing conflict in Ukraine, geopolitical events, economic conditions (including government shutdown), market demands, and competitive factors. • Near-term uncertainty for armor orders due to the federal government shutdown. • Potential impact of government shutdown on new proposal activity and research topic publication.

Q: Can you expand on potential other players in the power module space and how you plan the move to larger capacity?

A: Growth across board with large, medium, and small customers ordering more. Plans include detailed move plans with inventory built up to mitigate disruption, outfitting new facility, and sequential move of work cells during 2026.

Q: How will revenue from the $15.5 million contract be recognized and impact of moving to larger facility?

A: Revenue should be relatively stable throughout the contract term. Inventories will be built up to avoid customer impact from the move, and weekly quantities will accelerate once new facility is online.

Q: How has the federal government shutdown affected SBIR process, procurement, and receivables?

A: Billing has been smooth with recent invoices paid promptly. Funded contracts underway have minimal disruption as technical team is executing research work. Risk related to new proposal activity and research topic publication due to shutdown.