Nephros (NEPH) Q2 2025 earnings summary

Executive summary

• Achieved third consecutive quarter of profitability, with Q2 2025 net revenue of $4.4 million, up 36% year-over-year, and first half 2025 revenue of $9.3 million, up 37% from the prior year period.

• Net income for Q2 2025 was $237,000, reversing a net loss of $289,000 in Q2 2024; first half 2025 net income was $795,000, compared to a net loss of $458,000 in the prior year.

• Programmatic business and active-site counts reached all-time highs, with the dialysis water segment securing its largest purchase order.

• Cash flow from operations was $1.3 million for the first half of 2025, compared to a $1.2 million outflow in the prior year period.

• Gross margin improved to 63% in Q2 2025 from 59% in Q2 2024, driven by reduced shipping costs and inventory reserve adjustments.

Financial highlights

• Q2 2025 net revenue: $4.4 million, up from $3.3 million in Q2 2024; six-month revenue: $9.3 million, up from $6.8 million.

• Adjusted EBITDA for Q2 2025 was $355,000, up from a loss of $133,000 in Q2 2024; six-month adjusted EBITDA reached $1 million, compared to $(228,000) in the prior year.

• Cash and cash equivalents increased to $5.1 million as of June 30, 2025, with no debt.

• SG&A expenses increased 13% in Q2 2025 year-over-year, mainly due to higher commissions, bonuses, and stock-based compensation.

• R&D expenses rose to $311,000 in Q2 2025 from $254,000 in Q2 2024, reflecting increased headcount.

Outlook and guidance

• Management expects current cash balances to fund operations for at least the next 12 months.

• Focused on expanding into underserved verticals such as dental, government, and municipal facilities, and bringing new innovations to market.

• Continued operational discipline and profitability protection are key priorities.