CPS Technologies (CPSH) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue was $7.0 million, down from $7.5 million year-over-year, mainly due to order timing and reduced demand from a major customer, but future growth is expected and fundamentals remain strong.

• Gross margin declined to 8.6%–9% from 16%–16.4% in Q1 2025, impacted by lower sales, inventory build, gold pricing, and increased R&D spending.

• Operating loss was $500,000–$523,000 versus an operating profit of $100,000–$130,000 in Q1 2025; net loss was $294,000–$300,000 or $(0.02) per share, compared to net income of $96,000–$100,000 or $0.01 per share a year ago.

• Leadership transition is underway, with Chris Fraser set to become CFO in May 2026, succeeding Chuck Griffith.

• Inflation, supply chain risks, and customer concentration are present, but most cost increases have been passed to customers so far.

Financial highlights

• Product sales were $7,028,748 in Q1 2026 vs. $7,505,921 in Q1 2025.

• Gross profit was $606,878 in Q1 2026 vs. $1,231,001 in Q1 2025.

• SG&A expenses were approximately $1.1 million, up 3% year-over-year.

• Cash and marketable securities totaled $12.5 million at quarter-end, with cash and cash equivalents at $5.7 million and marketable securities at $6.8 million.

• Inventory increased to $7.1 million from $5.6 million, supporting continued shipments and the facility move.

Outlook and guidance

• Management expects continued revenue growth and margin improvement as inventory levels normalize and product mix changes.

• The company is finalizing plans to move to a larger, advanced manufacturing facility later in 2026.

• Operations are expected to be funded for the remainder of 2026 from operations and existing cash balances.

• The SBIR and STTR programs have been reauthorized through 2031, providing long-term funding clarity.

• Elevated uncertainty remains due to inflation, tariffs, and customer concentration.