CVD Equipment Corp (CVV) Q2 2025 Earnings Call Highlights: Navigating Challenges with Strategic ...
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
CVD Equipment Corp (NASDAQ:CVV) reported a year-to-date revenue increase of 19.2% compared to the prior year period.
Strong demand in the SDC segment for gas delivery equipment contributed to orders of $4.5 million in the second quarter.
The company shipped its first CBD 4,000 silicon carbide coating reactor system to an industrial customer, with plans to ship two more systems over the next 12 months.
CVD Equipment Corp (NASDAQ:CVV) is exploring new opportunities in the electric vehicle market for its power code systems.
The company is committed to maintaining expense management to support its goal of achieving sustained profitability and cash flow.
Negative Points
Second quarter 2025 revenue decreased by 19.4% from the prior year period and by 38.5% compared to the first quarter of 2025.
Orders for the first six months of 2025 were significantly lower at $7.3 million compared to $16.9 million for the same period in 2024.
Gross profit decreased to $1.1 million with a gross margin of 21%, down from $1.5 million or 24.3% in the second quarter of 2024.
The company reported an operating loss of $1.1 million for the second quarter of 2025, compared to a loss of $0.9 million in the same period of 2024.
Cash and cash equivalents decreased to $7 million as of June 30, 2025, from $12.6 million at the end of 2024, primarily due to net losses and increased accounts receivable.
Q & A Highlights
Warning! GuruFocus has detected 1 Warning Sign with CVV.
Q: Can you specify if the NDAs you have are with domestic or international clients, especially considering the current tariff environment? A: The facility is located in the United States, and our clients with NDAs can be both domestic and international, including North America, Europe, and Asia. However, the majority of the orders we are discussing are U.S.-based, which minimizes tariff issues. There are some inflationary pressures due to tariffs on components from Europe and Asia, but we are managing through that. - Emmanuel Lachios, President and CEO
Q: Will the delivery made in early July be recorded in the third quarter? A: We recognize our revenue using the overtime concept, meaning we recognize revenue proportionally as we manufacture the equipment. Therefore, a significant portion of that revenue has already been recognized during the manufacturing process. - Richard Catalano, Executive Vice President and CFO
Q: How are tariffs affecting your business, particularly regarding the cost of goods sold? A: Tariffs impact the cost of goods sold, especially for components like pumps sourced from Europe or Asia. This results in some inflationary pressure, but we are actively managing these costs. - Emmanuel Lachios, President and CEO
Q: What factors are influencing your return to profitability? A: Our return to profitability depends on receiving new equipment orders, mitigating inflationary pressures, and managing planned capital expenditures and operating expenses. Revenue and orders historically fluctuate due to changes in order rates and manufacturing process factors. - Richard Catalano, Executive Vice President and CFO
Q: Can you elaborate on the impact of reduced U.S. government funding for universities on your business? A: Reduced U.S. government funding for universities is one of several factors affecting our bookings and revenue. We are actively monitoring customer demand and the geopolitical landscape to manage our operating expenses effectively. - Emmanuel Lachios, President and CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
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