CSP Inc.'s Q2 2025 Earnings Call: Key Contradictions in AZT Sales Strategy, Revenue Growth, and Integration Plans

AZT sales channels and international market access, AZT revenue growth expectations, opportunities with cell tower companies, integration of AZT PROTECT into Forescout platform, and recurring revenue growth goals are the key contradictions discussed in CSP Inc.'s latest 2025Q2 earnings call.



Revenue Performance and AZT PROTECT Traction:
- CSP Inc. reported revenue of $13.1 million for Q2 2025, meeting internal budgets and expectations despite an unusual operating environment.
- The growth was driven by a slight increase in product sales and a decline in service revenue, partly attributed to a single multi-million-dollar deal not being repeated this quarter.

AZT PROTECT Market Penetration:
- The company's AZT PROTECT solution gained traction in the OT marketplace, with six new customer deals signed during the quarter.
- The pipeline for AZT opportunities has increased fivefold over the past couple of quarters, supported by partnerships with resellers like Rexel USA and Rockwell Automation.

Cloud-Based Services Expansion:
- The Technology Solutions (TS) business generated $12 million in revenue and remained profitable, driven by increased demand for cloud-based services.
- This growth was supported by awards such as the Microsoft Azure migration project for a Florida-based healthcare provider.

Cash and Dividend Position:
- CSP Inc. finished the quarter with more than $29 million in cash and cash equivalents.
- The company declared a $0.03 per share quarterly cash dividend, reflecting its financial stability and commitment to shareholder returns.

Challenges and Strategic Focus:
- CSP Inc. acknowledged potential challenges in the second half of the fiscal year, such as price increases on products and reduced customer spending.
- The company remains focused on expanding AZT PROTECT growth opportunities and leveraging its TS business to fund ARIA, positioning it to maximize opportunities in a challenging environment.