Northern Technologies Q3 2025: Unraveling Contradictions in Sales Performance, China Growth, and Compostable Innovations

Oil and gas sales team performance, profitability and revenue growth of China segment, compostable technology and food packaging opportunities, and China revenue growth and market conditions are the key contradictions discussed in Northern Technologies International Corporation's latest 2025Q3 earnings call.



Revenue Growth and Market Performance:
- Northern Technologies International Corporation (NTIC) reported a 4.0% increase in consolidated net sales, reaching $21.5 million in Q3 2025, compared to the same period last year.
- The growth was driven by strength across various business units, including a 7.1% increase in ZERUST Industrial net sales, despite the 5.3% decrease in ZERUST's Oil and Gas net sales.

Joint Venture Performance and European Economic Impact:
- Total net sales for the fiscal 2025 third quarter by NTIC's joint ventures decreased year-over-year by 12.9% to $2.3 million.
- This decline was attributed to high energy prices, regional economic pressures in Europe, and increased uncertainty related to U.S. trade and economic policies.

China Expansion and Profitability:
- NTIC China achieved a 27.4% increase in net sales to $4.5 million in Q3 2025, marking the second-highest quarterly revenue since the transition to a wholly-owned subsidiary in fiscal 2015.
- The positive growth in China was driven by increasing demand for domestic consumption, contributing to the profitability of the region.

Oil and Gas Segment Expansion:
- ZERUST Oil and Gas sales were $8.6 million for the trailing 12-month period, a 15.4% increase from the previous period.
- The growth was supported by expanded opportunities and strategic investments in the oil and gas sales team, leading to increased orders and sales in the trailing 12 months.

Natur-Tec Bioplastics and Market Opportunities:
- Natur-Tec sales were $5.8 million, representing a 1.2% year-over-year decline, though there was a 16.5% sequential increase.
- The company is working on larger opportunities for compostable solutions, which hold significant promise for future sales growth.