Shares of CSP Inc. (CSPI) have declined 6% since the company reported its earnings for the second quarter of fiscal 2025. This compares to the S&P 500 index’s 1.4% gain over the same time frame. Over the past month, the stock has risen 2.8% compared with the S&P 500’s 15.5% increase.CSPI: Revenue and EPS ComparisonCSP reported revenues of $13.1 million for the quarter ended March 31, 2025, down 4.1% from $13.7 million in the same period a year earlier. The decline was driven by a 74% plunge in sales from th ...

or ◻ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . Table of Contents United States SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ⌧ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 2025 Commission File Number 0-10843 CSP Inc. (Exact name of Registrant as specified in its charter) Massachusetts 04-2441294 (State or other jurisdicti ...

CSP (CSPI) Q2 2025 Earnings Call May 14, 2025 10:00 AM ET Company Participants Michael Polyviou - Managing MemberVictor Dellovo - CEO, President & DirectorGary Levine - VP of Finance, CFO, Treasurer & SecretaryJoseph Nerges - Managing Director Operator Good morning, everyone, and welcome to the CSPi's Fiscal twenty twenty five Second Quarter Results Conference Call. At this time, all participants are in a listen only mode and the floor will be opened for questions following the presentation. Please note tha ...

CSP (CSPI) Q2 2025 Earnings Call May 14, 2025 10:00 AM ET Speaker0 Good morning, everyone, and welcome to the CSPi's Fiscal twenty twenty five Second Quarter Results Conference Call. At this time, all participants are in a listen only mode and the floor will be opened for questions following the presentation. Please note that this conference is being recorded. I will now turn the conference over to your host, Michael Pollivu. Speaker1 Thank you, Jenny. Hello, everyone, and thank you for joining us to review ...

"Excluding a single, multi-million-dollar deal recorded in the year-ago fiscal second quarter, our business generated double-digit sales growth in the fiscal second quarter compared to the year- ago period," commented Victor Dellovo, Chief Executive Officer. "The prior year multi-million- dollar sale has proven to be successful resulting in the customer renewing customer support for twelve months in a six-figure contract during the fiscal second quarter. Despite challenging operating conditions, we're pleas ...

Core Insights - Abbott announced late-breaking data from the AVEIR Conduction System Pacing (CSP) acute clinical feasibility study, demonstrating the safety and performance of its leadless pacemaker technology [1][4] - The study is the first to assess a leadless pacemaker delivering conduction pacing to the heart's left bundle branch area, offering a novel approach to pacing therapy [1][4] Clinical Study Results - The AVEIR CSP acute clinical feasibility study showed successful implantation of the leadless pacemaker deep into the wall separating the left and right chambers of the heart, with many participants achieving left bundle branch area pacing [3] - All study participants received the AVEIR ventricular leadless pacemaker at the end of the procedure [3] Future Developments - Abbott has begun enrolling patients in the ASCEND CSP pivotal clinical trial, which will evaluate the safety and effectiveness of the investigational CSP Implantable Cardioverter-Defibrillator (ICD) lead [6] - The trial aims to enroll up to 414 people at 70 sites worldwide, focusing on reducing complications and improving long-term outcomes for patients requiring ICD therapy [6] Regulatory Milestones - Abbott's UltiPace Pacing Lead is the first FDA-approved stylet-driven lead for left bundle branch area placement [7] - The FDA granted Breakthrough Device Designations to both the AVEIR CSP leadless pacemaker system and the CSP ICD lead for left bundle branch area pacing, expediting the review of these innovative technologies [7] Strategic Focus - Abbott is developing two unique approaches to conduction system pacing, targeting the left bundle branch area with both traditional and leadless technology [5] - The ongoing innovation in conduction system pacing is expected to drive advancements in treatment options for patients with slow or irregular heart rhythms [8]

Core Viewpoint - CSP Inc. has shown strong financial performance in the first quarter of fiscal 2025, with significant revenue growth driven by service offerings, particularly in the Technology Solutions segment, and a notable increase in stock performance compared to the S&P 500 index [1][17]. Financial Performance Overview - The company reported diluted earnings per share of 5 cents, a recovery from a loss of 1 cent in the same quarter last year [2]. - Total quarterly revenues reached $15.7 million, up 2% from $15.4 million year-over-year, primarily due to a 17% increase in service revenues to $4.7 million [2]. Revenue Drivers - The Technology Solutions segment was the main revenue contributor, generating $15.2 million in sales, benefiting from increased managed service offerings and a growing customer base in the cruise and ocean freight industries [4]. - The High-Performance Products segment, which includes cybersecurity solutions, saw revenues decline by 40% year-over-year to $430,000, although gross margin improved to 50% from 47% [5]. Profitability Metrics - Gross profit increased to $4.6 million, representing 29.1% of total sales, up from 26.6% in the prior year, supported by higher-margin service revenue growth [6]. Cash and Debt Management - CSP ended the quarter with $30.7 million in cash and cash equivalents, slightly up from $30.6 million in the previous quarter, and maintained a quarterly cash dividend of 3 cents per share [7]. - The company reduced its outstanding debt to $2.6 million from $4.2 million, reflecting improved cash flow from operations of $1.7 million [8]. Cost Structure - Operating expenses increased, with engineering and development costs rising to $786,000 from $700,000, and selling, general, and administrative expenses increased to $4.1 million from $3.7 million [9]. Management Insights - CEO Victor Dellovo noted strong demand in the Technology Solutions segment and highlighted the company's momentum in service revenue growth and expanding gross margins [10]. - The company secured a significant order from a major cruise line and expanded its presence in the ocean freight market [10]. Future Outlook - Management anticipates continued growth in the adoption of the AZT PROTECT cybersecurity solution and is integrating its offerings into the Rockwell Automation sales channel [14]. - CSP is budgeting for a significant increase in AZT PROTECT revenues in fiscal 2025, focusing on partnerships and expansion into the middle-market operational technology sector [15]. Shareholder Returns - CSP is actively repurchasing shares under its buyback program to offset dilution from stock-based compensation and remains committed to maintaining its quarterly dividend [16].

Sales Performance - Sales increased by $0.3 million, or 2%, to $15.7 million for the three months ended December 31, 2024, compared to $15.4 million for the same period in 2023[113]. - TS segment sales remained flat at $10.9 million for the three months ended December 31, 2024, while service sales increased by $0.6 million, or 16%[115]. - Sales in the Americas increased by $0.9 million, or 6%, primarily driven by the TS segment's U.S. division[118]. Profitability - Gross margin percentage increased to 29% for the three months ended December 31, 2024, up from 27% for the same period in 2023[119]. - Net income for the three months ended December 31, 2024, was $472 thousand, compared to a net loss of $(73) thousand for the same prior year period[113]. - The overall HPP segment gross margin increased to 50% for the three months ended December 31, 2024, from 47% for the same period in 2023[122]. - Service gross margin as a percentage of service sales increased to 58% for the three months ended December 31, 2024, compared to 50% for the same period in 2023[121]. Operating Loss and Expenses - Operating loss was $(0.4) million for the three months ended December 31, 2024, compared to an operating loss of $(0.3) million for the same period in 2023[113]. - Engineering and development expenses for the HPP segment increased by $0.1 million to $0.8 million for the three months ended December 31, 2024, primarily due to increased consulting and stock compensation expenses[123]. - SG&A expenses totaled $4.1 million for the three months ended December 31, 2024, an increase of $0.4 million compared to the prior year, with the TS segment accounting for a $0.3 million increase due to higher commissions and stock compensation[124]. Other Income and Tax - Other income, net was $0.7 million for the three months ended December 31, 2024, compared to $0.3 million for the same period in 2023[113]. - Total other income, net increased by $0.4 million to $711 thousand for the three months ended December 31, 2024, primarily driven by a foreign exchange gain of $469 thousand[125]. - An income tax benefit of $115 thousand was recorded for the three months ended December 31, 2024, compared to an income tax expense of $13 thousand in the same period of 2023[130]. Cash Flow and Financing - Cash and cash equivalents increased by $0.1 million to $30.7 million as of December 31, 2024, from $30.6 million as of September 30, 2024[132]. - Cash provided by operating activities was $1.7 million for the three months ended December 31, 2024, remaining flat compared to the prior year[134]. - Cash used in investing activities decreased to $47 thousand for the three months ended December 31, 2024, down from $126 thousand in the prior year[135]. - Cash used in financing activities was $1.6 million for the three months ended December 31, 2024, compared to $1.2 million in the prior year, primarily due to a net payment on the line of credit[136]. - The company has a line of credit with a capacity of up to $15.0 million, with $12.4 million available as of December 31, 2024[139]. - The company expects to receive $2.4 million related to financing receivables in the remainder of fiscal year 2025[140].

Financial Data and Key Metrics Changes - The company reported revenue of $15.7 million for Q1 2025, an increase from $15.4 million in Q1 2024 and $13 million in Q4 2024 [22] - Service revenue grew by 17% to $4.7 million compared to $4 million in both the prior year's first quarter and the previous quarter [22] - Gross profit increased to $4.6 million, representing 29.1% of sales, up from $4.1 million or 26.6% of sales in the same quarter last year [23] - Net income for the quarter was $472,000 or $0.05 per diluted common share, compared to a net loss of $73,000 or $0.01 per diluted common share in the prior year [23] Business Line Data and Key Metrics Changes - The Technology Solutions business generated approximately $15.2 million in sales, contributing significantly to overall revenue [10] - The company added a second major cruise line order and continued to grow in the ocean freight liner market, enhancing monthly recurring revenue [10] Market Data and Key Metrics Changes - The company is expanding its presence in the Operational Technology (OT) markets, where demand for enhanced cybersecurity solutions is increasing [12] - A partnership with United Flow Technologies aims to implement AZT PROTECT in water treatment facilities, addressing vulnerabilities to cyber attacks [14] Company Strategy and Development Direction - The company is focusing on the middle market OT customers through partnerships with Rockwell distributors, which are expected to have shorter sales cycles [18] - The strategy includes leveraging industry awards for AZT PROTECT to enhance market visibility and credibility [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about a significant increase in revenue from AZT PROTECT in the current fiscal year [62] - The company is actively working to build name recognition and market presence through partnerships and trade shows [55][59] Other Important Information - The Board of Directors authorized a quarterly cash dividend of $0.03 per share [9] - The company maintains a robust balance sheet with cash and cash equivalents of $30.7 million, supporting growth initiatives [25] Q&A Session Summary Question: Inquiry about AZT PROTECT upgrades - Management confirmed that an additional feature upgrade for AZT PROTECT will be announced soon [34] Question: Status of patents related to ARIA platform - Three patents have been issued, with two more expected to issue by year-end and two recent submissions anticipated by 2026 [36] Question: Sales channels for AZT PROTECT - Current sales have not yet come through Rockwell channels, as contracts are still being established [41] Question: Potential for overseas sales - There are no restrictions preventing AZT PROTECT from being sold in overseas markets [46] Question: Partnerships for market entry - Management indicated that no partnerships have been established yet, focusing on building recognition through distributors [55] Question: Anticipated revenue ramp-up for AZT - Management is budgeting for a significant increase in AZT revenues this year [62] Question: Share buyback plans - Management is considering more aggressive share buybacks in the future [68]

Financial Performance - Revenue for Q1 fiscal 2025 increased 2% to $15.7 million compared to $15.4 million in Q1 fiscal 2024[4] - Services revenue grew 17% to $4.7 million, up from $4.0 million in the prior year[4] - Gross profit for the quarter increased 11% to $4.6 million, with gross margin expanding over 200 basis points to 29.1%[4] - Net income for Q1 fiscal 2025 was $0.5 million, or $0.05 per diluted common share, compared to a net loss of $(73,000) in Q1 fiscal 2024[4] - Operating expenses increased to $4.9 million, up from $4.4 million in the prior year, reflecting investments in growth[15] Cash and Assets - The company maintained cash and cash equivalents of $30.7 million as of December 31, 2024[5] - Total current assets decreased to $52.2 million from $54.8 million in the previous quarter[14] - Shareholders' equity increased to $47.5 million from $47.3 million in the previous quarter[14] Customer Growth and Partnerships - Several new customers were signed for the AZT PROTECT™ offering, indicating growth in high-demand industries[6] - The company aims to leverage momentum and increase recurring revenue through partnerships, particularly with Rockwell Automation[11]