CSP 2025 Q3 Earnings Wider Losses Despite 18% Revenue Growth

CSP Inc. (CSPI) reported mixed results for its fiscal 2025 Q3, with revenue up 18% year-over-year but losses widening. The company’s results missed strong expectations for profitability, as the net loss deepened to $264,000, or $0.03 per share, from $185,000, or $0.02 per share, in the prior-year period. The company did not issue formal guidance for the quarter or fiscal year, though management expressed optimism for improved performance in 2026.

Revenue
CSP posted total revenue of $15.45 million in Q3 2025, representing a 17.9% year-over-year increase from $13.11 million. The strong performance was driven by the Technology Solutions segment, which contributed $15.06 million to the top line. The High Performance Products segment added $384,000 to revenue, with particular focus on the AZT PROTECT cybersecurity offering, which is showing early signs of momentum and a growing deal pipeline.

Earnings/Net Income
The company’s net loss widened by 42.7% to $264,000 in Q3 2025, compared to a loss of $185,000 in the same period last year. On a per-share basis, the loss increased to $0.03 from $0.02, representing a 50% wider loss. Despite revenue growth, the earnings performance remains a significant concern for investors.

Price Action
CSP shares have seen strong short-term price action, surging 24.79% in the latest trading day, 12.52% over the past full trading week, and 4.57% month-to-date. However, the stock underperformed the broader market when held for 30 days following the earnings report, delivering only moderate returns.

Post-Earnings Price Action Review
Although CSP shares experienced notable short-term gains following the earnings report, the 30-day holding period yielded only modest returns and underperformed relative to the broader market. While the stock's recent volatility offers potential for short-term traders, the lack of consistent momentum and long-term clarity may deter more patient, value-oriented investors. The mixed price performance underscores the challenge of aligning market sentiment with the company’s strategic ambitions and financial reality.

CEO Commentary
CEO Victor J. Dellovo emphasized the momentum behind the Technology Solutions segment and the AZT PROTECT cybersecurity offering, noting a strong deal pipeline and expanding presence in niche industrial markets. He highlighted progress with key partners like Rockwell Automation and Oryx, as well as the company’s strategic expansion into sectors like steel and concrete. Dellovo also pointed to a robust cash position—over $26 million—and the recent addition to the Russell 3000 Index as signs of a strengthening business foundation.

Guidance
While no formal revenue or EPS guidance was provided for the current fiscal year, management expressed optimism about accelerating performance in 2026 as AZT PROTECT gains traction. Continued investment in marketing and R&D is expected to drive long-term returns, particularly as the product expands into industrial IoT applications and through key reseller partnerships.

Additional News
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