Nephros, Inc. Q3 FY2025 earnings call

• Delivered $4.8 million in revenue, the second highest quarter ever, and achieved the fifth consecutive quarter of profitability. - Reached the highest level of programmatic business in the company's history. - The filtration installation program is a growth lever, with reorder rates, engagement, and customer loyalty strengthening. - Launched the PFAS removal solution, opening new verticals beyond traditional patient care markets. - Deepened commercial traction in cross-functional coordination, expanding into dental, municipal, and government facilities. - Boasts a strong balance sheet, 0 debt, and a robust innovation pipeline.

Third quarter net revenue was $4.8 million, a 35% increase from the corresponding period in 2024. The 9-month sales ending September 30, 2025, were $14.1 million, up 37% from $10.3 million in the prior year. Gross margins in the third quarter were 61%, consistent with the third quarter of 2024. Research and development expenses in the third quarter of 2025 were $338,000 compared to $188,000 in the same period of 2024. Sales, general and administrative expenses in the third quarter of 2025 were $2.2 million versus $1.7 million in the corresponding period of 2024. Net income for the third quarter of 2025 was $337,000 compared to $183,000 in the same period last year. Adjusted EBITDA in the third quarter of 2025 was $418,000 compared to $295,000 in the same period of 2024. For the 9-month period ending September 30, 2025, gross margins improved to 63% from 61% in the prior year period. Net income for the 9-month period ended September 30, 2025, increased to $1.1 million from a net loss of $0.3 million in the prior year period. The cash balance on September 30, 2025, was $5.2 million, and the company remained debt-free.

• Optimistic about sustained growth, broadening market reach, and delivering strong value in the coming quarters. - Confident in scaling successful operations and pursuing new opportunities. - Emphasizes the importance of innovation and execution in driving future performance.

• Uncertainty in successfully marketing and selling products and services. - Variability in the rate of adoption of products and services by healthcare providers. - Impact of existing and new regulatory requirements on the business. - Tariffs affecting inventory handling expenses. - Competition and other economic factors that could influence results.

Q: Could you elaborate on the PFAS filtration solution and its impact on revenues in 2026 and Q4?

A: PFAS provides an opportunity to meet customer needs in new markets, acting as a door opener to other technologies, though commercialization is ongoing.

Q: Update on the tracking app and contribution of filter installation program to programmatic growth?

A: Tracking app is growing, expanding geographies, and enabling more touch points and customer education during installations.

Q: Thoughts on margins, especially regarding tariffs and price increases?

A: Tariffs have a small impact, manageable, and price increases can offset some effects; margins expected to remain 60-plus.

Q: Clarification on service revenue?

A: Service revenue includes initial installations and regular filter replacement services for customers.