CSPi reports 18% revenue growth in FY23 Q3, technology solutions up 20%.

• CSPi reports 18% revenue growth in Q3 FY 2025 • Revenue up from prior fiscal year 2024 quarter • Technology Solutions revenue grows 20% in Q3 FY 2025 • AZT PROTECT sales channels penetration continues • Managed services and cloud-based businesses maintain growth trajectories

CSPi Inc. (NASDAQ: CSPI) has reported a significant 18% increase in total revenue for the third quarter of fiscal year 2025, compared to the same period in fiscal year 2024. The company's Technology Solutions segment, which includes cloud-based services and maritime customers, contributed to the growth, with a 20% increase in revenue. The company's product revenue also saw a substantial 29% increase, reaching $10.2 million.

Despite the revenue growth, CSPi reported a net loss of $0.3 million, or $0.03 per share, compared to a net loss of $0.2 million, or $0.02 per share, in the same period last year. This net loss is primarily due to the company's strategic focus on expanding the AZT PROTECT™ solution, which has led to a shift in revenue mix towards lower-margin product sales. Gross margin contracted from 34% to 29%, resulting in a gross profit of $4.5 million, which was lower than the $4.6 million reported in the previous year.

The company's balance sheet remains robust, with $26.3 million in cash as of June 30, 2025. CSPi declared a quarterly dividend of $0.03 per share and repurchased over 19,000 shares for a total cost of $0.3 million. The inclusion of CSPi in the Russell 3000® Index represents an opportunity for increased institutional awareness and potential valuation.

Management remains optimistic about the AZT PROTECT™ pipeline, which continues to gain traction in the steel, concrete, and lumber industries. The company's strategic channel expansion efforts have led to new customer acquisitions in these verticals, including a follow-up order from a South African cell tower company.

For the nine months ended June 30, 2025, CSPi's revenue increased to $44.3 million, while net income plummeted to $0.1 million, or $0.01 per share, compared to $1.3 million, or $0.13 per share, in the same period last year. This significant profit decline, despite a 5% revenue increase, underscores the company's margin deterioration.

CSPi's Q3 FY 2025 results indicate a company in transition, with strong top-line growth but concerning margin compression. The company's strategic focus on cloud services and maritime customers is yielding top-line results, but the shifting revenue mix towards lower-margin product sales is diluting profitability. Management's optimism about the AZT PROTECT™ pipeline needs to translate into improved bottom-line results for investors to see meaningful long-term value creation.

References:
[1] https://www.stocktitan.net/news/CSPI/cs-pi-generates-18-revenue-growth-during-fy-2025-third-00ctwmfm7lai.html