CVD Equipment's Q2 2025: Unraveling Contradictions in Tariff Impact, Revenue Recognition, and Market Growth

Tariff environment and impact on revenue, revenue recognition methodology, impact of tariffs on costs and revenue recognition, sales and market growth for specific products/applications, client information and NDA disclosure are the key contradictions discussed in CVD Equipment Corporation's latest 2025Q2 earnings call.



Revenue Decline and Order Fluctuation:
- CVD Equipment Corporation reported revenue of $5.1 million for Q2 2025, a 19.4% decrease from the prior year and 38.5% lower than Q1 2025.
- The decrease was attributed to uncertainties related to proposed tariffs, reduced U.S. government funding for universities, and the dynamic nature of emerging markets.

Strong Demand in SDC Segment:
- The company's SDC segment saw strong orders for gas delivery equipment during Q2 2025, contributing to a total of $4.5 million in Q2 orders.
- This was supported by robust customer demand despite broader revenue declines, likely influenced by specific market needs and opportunities.

Impact of Tariffs on Costs:
- The company acknowledged that import tariffs on certain components, such as pumps, are exerting inflationary pressures on the cost of goods sold.
- While not causing immediate order issues, these tariffs pose challenges in managing pricing and profitability.

Backlog and Cash Management:
- CVD's backlog as of June 30, 2025, was $13.2 million, down from $13.8 million at March 31, 2025.
- The company maintains a focus on managing expenses and monitoring cash flow, ensuring sufficiency for working capital and capital expenditure needs for the next 12 months.