Rockwell Medical Q2 2025 Earnings: Revenue Down 38%

Rockwell Medical's Q2 2025 earnings report shows a 38% decline in revenue to $16.1m, a net loss of $1.49m, and a $0.043 loss per share. The company's revenue is expected to decline by 4.9% annually for the next three years, compared to an 8.2% growth in the medical equipment industry. Rockwell Medical's shares are up 7.1% from a week ago, despite the disappointing earnings.

Rockwell Medical (NASDAQ: RMTI) reported its second-quarter 2025 earnings, revealing a significant 38% year-over-year decline in revenue to $16.1 million. The company also reported a net loss of $1.49 million and an EPS loss of $0.043 per share. Despite these challenging financials, Rockwell Medical's shares have surged by 7.1% from a week ago, reflecting investor optimism about the company's long-term prospects.

The most notable event was the departure of the company's largest customer, which accounted for a significant portion of the revenue decline. Rockwell Medical anticipated this transition since 2024 when the customer announced its intention to switch suppliers. Despite the loss, the company managed to sign four multi-year supply agreements, bringing over 80% of its customer base onto long-term contracts. These new agreements include notable partnerships with major dialysis providers, helping to stabilize future revenue.

Rockwell Medical's EPS loss of $0.043 per share beat the estimated $0.05 loss, representing an 80% surprise. However, revenue fell short of projections by 1.41%, which likely contributed to the negative market reaction immediately following the earnings announcement. The stock declined by 3.35% in pre-market trading, despite the EPS beat. This discrepancy highlights the market's sensitivity to revenue misses and the ongoing transition period for Rockwell Medical.

Looking ahead, Rockwell Medical maintains its full-year 2025 guidance for net sales between $65 million and $70 million, with a gross margin of 16-18%. The company anticipates adjusted EBITDA to range from a loss of $500,000 to a gain of $500,000. Management expects sequential improvement as new supply agreements begin contributing more meaningfully to results.

Investors should keep an eye on the activation and scaling of new supply agreements, particularly in home dialysis and international markets. Margin performance will depend on the blend of products sold, execution of cost controls, and the pace at which revenue recovers. With over 80% of the customer base now under long-term contracts, the risk profile tied to customer concentration may gradually decline.

Rockwell Medical's shares are currently trading at $1.045, up from a week ago despite the disappointing earnings. This indicates that investors are optimistic about the company's long-term prospects, driven by strategic initiatives such as expanding manufacturing automation and securing long-term supply contracts with major dialysis providers.

References:
[1] https://www.nasdaq.com/articles/rockwell-medical-tops-q2-eps-view
[2] https://ca.investing.com/news/transcripts/earnings-call-transcript-rockwell-medical-q2-2025-sees-eps-beat-revenue-miss-93CH-4159251