Financial Data and Key Metrics Changes - Overall fourth quarter revenue increased by 11% to $14.5 million compared to $13 million in the same quarter last year [14] - Gross margins improved by over 800 basis points to 37% in the fourth quarter, driven by significant service revenue growth [5][14] - For the full fiscal year, revenue grew by 6%, with gross profit at $18.5 million, representing 32% of sales [16] Business Line Data and Key Metrics Changes - Service revenue grew by 63% in the fourth quarter, accounting for approximately 44% of total revenue, up from 30% in the prior year [6][14] - For the full year, service revenue represented 36% of total revenue, compared to 33% a year ago [6] - Product revenue decreased by $1.1 million in the fourth quarter [14] Market Data and Key Metrics Changes - The company expanded its customer base across various industries, including finance, manufacturing, oil and gas, healthcare, aerospace, education, utilities, telecommunications, and maritime [6] - The Managed Cloud and MSP services segment grew at a healthy double-digit rate during fiscal 2025 [7] Company Strategy and Development Direction - The company aims to build on the growth of its service business by allocating more resources and adding sales representatives [7] - There is a focus on expanding the AZT PROTECT cybersecurity offering, particularly in the maritime industry and Industrial IoT devices [10][11] - The company is optimistic about converting its growing pipeline into significant sales in fiscal 2026 [10][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in generating consistent profitability improvements for fiscal 2026, supported by infrastructure investments [13] - The company is excited about the potential for growth in the service segment and the product business as it enters fiscal 2026 [12][13] Other Important Information - The company reported a net loss of $191,000 for the fourth quarter, compared to a net income of $1.7 million in the prior year [15] - Cash and cash equivalents stood at $27.4 million as of September 30, 2025, down about 10% from the previous year [16] Q&A Session Summary Question: Service revenue calculation - Analyst confirmed the service revenue in the fourth quarter was approximately $6.4 million, which was well received by management [21][22] Question: IIoT expansion and potential customers - Management acknowledged the potential for significant deployments in the IIoT market and the need for OEM agreements [27][28] Question: Leads from Rockwell show - Management reported a 50% increase in leads from the Rockwell show compared to the previous year, with improved quality of leads due to established relationships [42][45] Question: Integration with Acronis - Management confirmed that AZT is being integrated into Acronis software, but revenue projections are still uncertain [54][68] Question: UFT relationship and case studies - Management provided updates on the relationship with UFT, indicating progress with case studies and future marketing efforts [56][57] Question: Share repurchase blackout period - Management clarified the blackout period for share repurchases due to earnings reporting schedules [58][60]

Financial Data and Key Metrics Changes - For the fiscal fourth quarter, revenue increased by 11% to $14.5 million compared to $13 million in the same quarter last year [13] - Gross margins improved by over 800 basis points to 37%, driven by significant growth in service revenue [5][14] - The company reported a net loss of $191,000 or $0.02 per diluted share for the fourth quarter, compared to a net income of $1.7 million or $0.18 per diluted share in the prior year [15] Business Line Data and Key Metrics Changes - Service revenue grew by 63% year-over-year, representing approximately 44% of total revenue in the fourth quarter, up from 30% in the same quarter last year [6][14] - For the full fiscal year, service revenue accounted for 36% of total revenue, compared to 33% the previous year [6] - Product revenue decreased by $1.1 million in the fourth quarter [13] Market Data and Key Metrics Changes - The company expanded its customer base across various industries, including finance, manufacturing, oil and gas, healthcare, aerospace, education, utilities, telecommunications, and maritime [6] - The managed cloud and MSP services segment experienced healthy double-digit growth during fiscal 2025 [7] Company Strategy and Development Direction - The company aims to build on the growth of its service business by allocating more resources, including adding sales representatives [7] - There is a focus on expanding the AZT Protect cybersecurity offering, particularly in the maritime industry and Industrial IoT devices [10][11] - The company is optimistic about generating consistent profitability improvements in fiscal 2026 due to infrastructure investments and growth strategies [12] Management's Comments on Operating Environment and Future Outlook - Management expressed excitement about the strong results from the service segment and the potential for growth in fiscal 2026 [11][12] - The company believes it has a competitive advantage in the cybersecurity space and aims to convert building momentum into significant sales [10] Other Important Information - The company maintained a strong balance sheet with cash and cash equivalents of $27.4 million, despite a 10% decrease from the previous year [16] - The company plans to pay a $0.03 per share dividend on July 15, 2026, to shareholders of record on December 26, 2025 [16] Q&A Session Summary Question: Service revenue calculation - The service revenue in the fourth quarter was approximately $6.4 million, which is 44% of total sales [20] Question: Expansion of AZT Protect - Management acknowledged that the expansion of AZT Protect is a game changer and is focusing on signing OEM agreements in the IIoT environment [25][26] Question: Integration with Acronis - AZT is being integrated into Acronis software, but revenue projections are too early to determine [53] Question: Relationship with UFT - The relationship with UFT is strong, and case studies are being developed for implementation with their customers [55] Question: Share repurchase blackout period - The company is subject to a blackout period for share repurchases until mid-February due to earnings reporting [56][59]

Financial Performance - CSP Inc. reported an 11% increase in total revenue for the fiscal fourth quarter ended September 30, 2025, reaching $14.5 million compared to $13.0 million in the same prior year quarter [2][7]. - For the full fiscal year 2025, total revenue was $58.7 million, a 6% increase from $55.2 million in the prior year [10]. - The company experienced a net loss of $(191) thousand, or $(0.02) loss per diluted common share, significantly improved from a net loss of $(1.7) million, or $(0.18) loss per diluted common share in the prior fiscal year fourth quarter [8][10]. Revenue Composition - Services revenue surged by 63%, accounting for 44% of total revenue in the fiscal 2025 fourth quarter [6]. - Gross margin expanded more than 800 basis points to 37% from 28% in the same prior year quarter, driven by a higher proportion of services revenue [6][8]. Business Development - The Technology Solutions business achieved near-record profitability and is expanding its sales team to capture a larger share of the services market [4]. - AZT PROTECT customer engagements increased significantly, setting the stage for growth in fiscal 2026, with new features enabling entry into the Embedded IIOT market [6][5]. Shareholder Returns - The company declared a quarterly dividend of $0.03 per share, payable on January 15, 2026 [2][6]. - The company repurchased approximately 19,500 shares for a total cost of $234 thousand during the fiscal fourth quarter [9]. Cash Position - Cash and cash equivalents as of September 30, 2025, were $27.4 million, supporting growth strategies for the AZT PROTECT offering [9].

Core Viewpoint - CSPi is set to release its fiscal 2025 fourth quarter and full year financial results on December 16, 2025, before the market opens [1] Company Summary - CSPi is recognized as an award-winning provider of security and packet capture products, managed IT and professional services, and technology solutions [1] - The announcement was made by CSPi's President and CEO Victor Dellovo, along with CFO Gary W. [1]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2][3] - The news team covers key finance and investing hubs including London, New York, Toronto, Vancouver, Sydney, and Perth [2] - Proactive focuses on medium and small-cap markets while also covering blue-chip companies, commodities, and broader investment stories [2][3] Group 2 - The team delivers news and insights across various sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] - Proactive adopts technology to enhance workflows and improve content production [4][5] - All content published by Proactive is edited and authored by humans, ensuring adherence to best practices in content production [5]

Core Insights - The article discusses the challenges and unpredictability of financial markets, emphasizing the difficulty in accurately predicting trends and identifying value opportunities [1]. Group 1 - The author expresses a strong interest in financial history and its application to current market analysis [1]. - There is a focus on the subjective nature of opinions regarding market predictions, suggesting that they should be taken with caution [2]. - The article highlights the importance of understanding past performance while acknowledging that it does not guarantee future results [3].

Core Viewpoint - CSPI reported strong revenue growth in its fiscal third quarter, driven by the Technology Solutions segment and the AZT PROTECT cybersecurity solution, despite facing margin pressures and a modest net loss [12]. Revenue & Earnings Performances - CSPI generated revenues of $15.4 million for the quarter ended June 30, 2025, an 18% increase from $13.1 million in the same period last year [2]. - Product sales rose 29% to $10.2 million, while service revenues increased marginally to $5.3 million [2]. - Gross profit decreased to $4.5 million from $4.6 million, with margins contracting to 29% from 34% due to a higher mix of product revenues and increased component costs [2]. - The company reported a net loss of $0.3 million, or 3 cents per share, compared to a net loss of $0.2 million, or 2 cents per share, a year earlier [2]. Other Key Business Metrics - The Technology Solutions segment achieved a 20% year-over-year revenue increase, driven by strong demand for cloud services and activity in the maritime sector [3]. - The TS division secured a significant Microsoft Azure project for a Florida-based healthcare provider, highlighting CSPI's strength in managed cloud offerings [3]. High-Performance Products (HPP) - The AZT PROTECT cybersecurity solution saw momentum, with new customer deployments in the steel, concrete, and lumber industries, and follow-up contracts in South Africa [4]. - Management noted that reseller partnerships with leading Rockwell Automation distributors are transitioning from early adoption to revenue acceleration, setting the stage for broader penetration in fiscal 2026 [4]. Management Commentary - CEO Victor Dellovo emphasized a land and expand strategy, where initial deployments of AZT PROTECT serve as proof points for broader rollouts across enterprise networks [5]. - Customers reported measurable operational benefits, such as preventing system outages in critical industrial environments, indicating potential for recurring contracts as the installed base grows [5]. Financial Overview - CFO Gary Levine explained that gross margin pressure was due to product mix and higher costs, while operating expenses increased from higher sales and marketing expenditures [6]. - The company ended the quarter with $26.3 million in cash and continued share repurchases, reflecting financial flexibility despite near-term earnings softness [6]. Factors Influencing Performance - Revenue growth was strong, but profitability was limited by a higher weighting of lower-margin product revenues and additional engineering and consulting expenses for AZT PROTECT [7][8]. - Modest service revenue growth tempered the recurring revenue contribution that typically supports margin stability [8]. Future Outlook - Management expressed optimism for the fourth quarter and fiscal 2025, noting momentum in both TS and HPP segments [10]. - There is accelerating interest from resellers and international partners, which could lead to larger contract opportunities [10]. Other Developments - CSPI was added to the Russell 3000 Index, increasing its exposure to institutional investors [11]. - The company authorized a quarterly dividend of $0.03 per share, reflecting a commitment to shareholder returns [11]. - CSPI repurchased over 19,000 shares for $0.3 million, with additional shares available under the 2021 repurchase program [11].

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three and nine months ended June 30, 2025, compared to the same periods in 2024, including balance sheets, statements of operations, comprehensive income, shareholders' equity, cash flows, and related notes Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $26,308 | $30,585 | ($4,277) | | Accounts receivable, net | $13,453 | $14,494 | ($1,041) | | Inventories | $3,532 | $2,293 | $1,239 | | Total assets | $66,784 | $69,436 | ($2,652) | | Line of credit | $1,141 | $4,169 | ($3,028) | | Total liabilities | $19,300 | $22,166 | ($2,866) | | Total shareholders' equity | $47,484 | $47,270 | $214 | Condensed Consolidated Statements of Operations Highlights (in thousands, except per share data) | Metric | Q3 2025 (in thousands) | Q3 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Total sales | $15,448 | $13,105 | $44,265 | $42,186 | | Gross profit | $4,453 | $4,582 | $13,224 | $15,155 | | Operating (loss) income | ($1,223) | ($720) | ($2,571) | $171 | | Net (loss) income | ($264) | ($185) | $100 | $1,330 | | Net (loss) income per share - diluted | ($0.03) | ($0.02) | $0.01 | $0.13 | Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Cash Flow Activity | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Net cash provided by operating activities | $370 | $5,721 | | Net cash used in investing activities | ($174) | ($238) | | Net cash used in financing activities | ($4,454) | ($1,824) | | Net (decrease) increase in Cash | ($4,277) | $3,674 | [Note 2. Revenue](index=14&type=section&id=Note%202.%20Revenue) Revenue is derived from Technology Solutions (TS) and High Performance Products (HPP) segments, with detailed breakdowns by segment, geography, and recognition timing Total Revenue by Segment (in thousands) | Segment | Q3 2025 (in thousands) | Q3 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Technology Solutions (TS) | $15,064 | $12,526 | $42,804 | $38,393 | | High Performance Products (HPP) | $384 | $579 | $1,461 | $3,793 | | **Consolidated Total** | **$15,448** | **$13,105** | **$44,265** | **$42,186** | - For the nine months ended June 30, 2025, revenue from the United States constituted the vast majority of sales, totaling **$39.0 million** out of a consolidated total of **$44.3 million**[44](index=44&type=chunk) - As of June 30, 2025, the company has **$3.6 million** in unsatisfied performance obligations for contracts with terms longer than one year, with revenue expected to be recognized through fiscal year 2029[51](index=51&type=chunk) [Note 5. Financing Receivables, Net](index=24&type=section&id=Note%205.%20Financing%20receivables%2C%20net) The company's TS U.S. division offers financing to customers with payment terms exceeding one year, categorizing receivables by risk ratings, totaling **$6.9 million** net as of June 30, 2025 Financing Receivables, Net by Risk Rating (in thousands) | Risk Rating | June 30, 2025 (in thousands) | September 30, 2024 (in thousands) | | :--- | :--- | :--- | | Low | $4,209 | $6,527 | | Moderate | $1,604 | $779 | | High | $1,125 | $0 | | **Total, Net** | **$6,938** | **$7,306** | - Interest income from these financing agreements was **$0.4 million** for the nine months ended June 30, 2025, down from **$0.5 million** in the prior-year period[66](index=66&type=chunk) [Note 10. Pension and Retirement Plans](index=34&type=section&id=Note%2010.%20Pension%20and%20Retirement%20Plans) The company maintains U.K. and U.S. pension plans, having entered a **£8.5 million** buy-in contract for its U.K. defined benefit plan in October 2024 as part of a planned termination - In October 2024, the company paid **£8.5 million** to enter a buy-in contract for its U.K. pension plan, transferring the payment liability to an insurer, though legal responsibility remains with the company until a full buy-out[86](index=86&type=chunk) - The buy-in contract is classified as a Level 3 fair value asset, valued at **$8.8 million** as of March 31, 2025, with its value sensitive to changes in the 20-year U.K. gilt yield[89](index=89&type=chunk)[91](index=91&type=chunk) [Note 14. Segment Information](index=42&type=section&id=Note%2014.%20Segment%20Information) This note details the financial performance of Technology Solutions (TS) and High Performance Products (HPP) segments, with TS generating **$2.5 million** operating income on **$42.8 million** sales, and HPP incurring a **$5.1 million** operating loss on **$1.5 million** sales for the nine months ended June 30, 2025 Segment Performance - Nine Months Ended June 30, 2025 (in thousands) | Segment | Total Sales (in thousands) | Operating (Loss) Income (in thousands) | | :--- | :--- | :--- | | Technology Solutions (TS) | $42,804 | $2,497 | | High Performance Products (HPP) | $1,461 | ($5,068) | | **Consolidated Total** | **$44,265** | **($2,571)** | - The HPP segment's operating loss significantly widened from **($2.7) million** in YTD 2024 to **($5.1) million** in YTD 2025, contributing to the consolidated operating loss[106](index=106&type=chunk) - The company has significant customer concentration in its financing receivables, with five customers (A, B, C, D, E) representing **75%** of the total balance as of June 30, 2025[109](index=109&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial results, noting an **18%** Q3 2025 sales increase but gross margin decline, and for the nine-month period, **5%** sales growth with a swing to a **$2.6 million** operating loss from **$0.2 million** income, primarily due to HPP segment performance and reduced operating cash flow [Results of Operations](index=47&type=section&id=Results%20of%20Operations) For the nine months ended June 30, 2025, consolidated sales increased **5%** to **$44.3 million**, driven by **11%** TS growth offset by **61%** HPP decline, resulting in a gross margin drop from **36%** to **30%** and an operating loss of **$2.6 million** - TS segment sales increased by **$4.4 million** (**11%**) for the nine months ended June 30, 2025, primarily due to higher product sales to existing major customers[138](index=138&type=chunk) - HPP segment sales decreased by **$2.3 million** (**61%**) for the nine months ended June 30, 2025, mainly because a large **$2.0 million** ARIA AZT order from the prior year did not recur[139](index=139&type=chunk) - The overall HPP segment gross margin percentage dropped from **73%** to **49%** year-over-year for the nine-month period, significantly impacting consolidated profitability[143](index=143&type=chunk) - Selling, General and Administrative (SG&A) expenses increased by **$0.6 million** (**5%**) year-over-year, driven by higher stock compensation, salaries, and costs related to the U.K. pension plan termination[146](index=146&type=chunk) [Liquidity and Capital Resources](index=62&type=section&id=Liquidity%20and%20Capital%20Resources) Cash and cash equivalents decreased by **$4.3 million** to **$26.3 million** due to a sharp decline in operating cash flow to **$0.4 million** and increased financing activities, though management believes current liquidity is sufficient for the next 12 months Summary of Cash Flows (in thousands) | Activity | Nine Months Ended June 30, 2025 (in thousands) | Nine Months Ended June 30, 2024 (in thousands) | | :--- | :--- | :--- | | Operating Activities | $370 | $5,721 | | Investing Activities | ($174) | ($238) | | Financing Activities | ($4,454) | ($1,824) | | **Net Change in Cash** | **($4,277)** | **$3,674** | - The significant decrease in operating cash flow was primarily due to decreased collections of Accounts Receivable (**$2.5 million**) and increased payments for Inventories (**$1.2 million**)[157](index=157&type=chunk) - The company maintains a **$15.0 million** line of credit, with **$13.9 million** available as of June 30, 2025[162](index=162&type=chunk) [Item 4. Controls and Procedures](index=64&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were ineffective as of June 30, 2025, due to two un-remediated material weaknesses from fiscal year 2024 related to corporate credit card expenses and income tax reporting, with active remediation plans underway - Disclosure controls and procedures were deemed ineffective as of June 30, 2025, because two material weaknesses identified in fiscal 2024 have not yet been fully remediated[166](index=166&type=chunk)[167](index=167&type=chunk) - Material Weakness 1 pertains to control deficiencies in the business expense reimbursement policy and a legacy credit card program, which led to inadequate review and undisclosed compensation for a C-level executive[169](index=169&type=chunk) - Material Weakness 2 relates to internal controls over financial reporting for income taxes, stemming from a lack of competency from a former third-party provider and the need for a more comprehensive management review[172](index=172&type=chunk) - Remediation efforts include updating the credit card policy, implementing internal audits, and hiring a new global accounting firm to assist with tax provisions and enhance internal controls[173](index=173&type=chunk)[180](index=180&type=chunk) PART II. OTHER INFORMATION [Item 1A. Risk Factors](index=68&type=section&id=Item%201A.%20Risk%20Factors) This section notes no material changes to prior risk factors, except for a new risk addressing potential adverse effects from significant political, trade, and regulatory developments, including new U.S. tariffs - A new risk factor was added concerning significant political, trade, or regulatory developments that are beyond the company's control[181](index=181&type=chunk) - The company specifically highlights the uncertainty around new U.S. tariffs on imports from China and other countries, and potential retaliatory measures, which could adversely affect its business, results of operations, and financial condition[182](index=182&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=70&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company details its stock repurchase program, authorized on February 8, 2011, under which **19,000** shares of common stock were repurchased on the open market during the three months ended June 30, 2025 Share Repurchases for the Quarter Ended June 30, 2025 | Period | Total Shares Purchased | Average Price Paid per Share ($) | | :--- | :--- | :--- | | April 2025 | 0 | $ - | | May 2025 | 3,300 | $15.07 | | June 2025 | 15,700 | $12.83 | | **Total** | **19,000** | **$13.95** | - As of June 30, 2025, a maximum of **291,854** shares may still be purchased under the existing repurchase plan[185](index=185&type=chunk) [Item 5. Other Information](index=70&type=section&id=Item%205.%20Other%20Information) During the quarter ended June 30, 2025, no director or officer adopted, modified, or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No director or officer of the Company made changes to any "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement" during the third fiscal quarter of 2025[186](index=186&type=chunk) [Item 6. Exhibits](index=70&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including CEO and CFO certifications required by Sarbanes-Oxley Act, and financial statements in XBRL format - Exhibits filed include Rule 13(a)-14(a) / 15d-14(a) certifications for the CEO and CFO[187](index=187&type=chunk) - Section 1350 certifications for the CEO and CFO are also included[189](index=189&type=chunk) - The financial statements and notes are provided in eXtensible Business Reporting Language (XBRL) format[193](index=193&type=chunk)

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenue of $15.4 million, an 18% increase compared to $13.1 million in Q3 2024, and an 18% sequential increase from the previous quarter [5][19] - Product revenue grew by 29% year-over-year, while service revenue was slightly higher at $5.3 million [19] - Gross profit for the quarter was $4.5 million, representing 29% of sales, down from 35% in the same quarter last year due to a change in sales mix and higher component costs [19] Business Line Data and Key Metrics Changes - The Technology Solutions (TS) segment is driving revenue growth, particularly through the Managed Cloud business, which has gained traction in niche markets like container shipping [6][8] - The High Performance Products (HPP) segment is seeing momentum with the ADT Protect cybersecurity offering, particularly in operational technology markets [8][10] Market Data and Key Metrics Changes - The company has established a strong presence in the operational technology marketplace, with successful deployments in industries such as steel, concrete, and lumber [8][10] - The company is expanding its cloud portfolio, which reflects a strategic focus on delivering secure and scalable cloud solutions [6][7] Company Strategy and Development Direction - The company is focused on a "land and expand" sales approach, aiming to build long-term relationships with customers by initially deploying solutions at individual sites and then expanding within the organization [9][10] - CSPi aims to maximize returns from the AZT Protect product line through prudent investments in marketing and participation in industry events [17][65] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to grow both top and bottom lines for the full fiscal year if current trends continue [5] - The company is optimistic about the momentum heading into the end of the fiscal year, driven by recent contract wins and increased reseller activity [65] Other Important Information - CSPi ended the quarter with over $26 million in cash and cash equivalents, allowing for continued investment in growth and a quarterly cash dividend of $0.03 per share [17][21] - The company was added to the Russell 3000 Index, enhancing visibility among institutional investors [18] Q&A Session Summary Question: Can you expand on the consulting expenses mentioned? - Management indicated that the consulting expenses were for additional engineers conducting high-level testing of product enhancements, and this is expected to be a recurring expense for another quarter [26][27] Question: Can you disclose the location of the lumber mill? - The management confirmed that the lumber mill is located in the Pacific Northwest [30] Question: What features have been added to the AZT Protect software since its release? - The software has evolved significantly, now supporting Windows and Linux with 14 countermeasures against various cyber threats, compared to just one in the initial release [40][41] Question: Are there any updates on the water facilities project with UFT? - Management stated that progress is being made with UFT, but specific details are limited due to NDA restrictions [60] Question: What are the projections for ACT revenues in the coming years? - Management declined to share specific projections but confirmed that internal forecasts exist [62]

[Overview of Q3 FY2025 Performance](index=1&type=section&id=Overview%20of%20Q3%20FY2025%20Performance) CSPi reported strong Q3 FY2025 operational momentum with 20% TS revenue growth and new customer acquisitions, alongside an 18% increase in total revenue to $15.4 million, despite a net loss [Key Achievements and Operating Highlights](index=1&type=section&id=Key%20Achievements%20and%20Operating%20Highlights) CSPi reported significant operational momentum in Q3 FY2025, highlighted by a 20% revenue growth in the Technology Solutions (TS) segment. The company secured new customers for its AZT PROTECT™ offering in key industrial sectors and expanded its relationship with a South African client. These achievements, coupled with its inclusion in the Russell 3000® Index, are expected to enhance market awareness and drive future growth - Technology Solutions (TS) revenue grew **20% year-over-year**, driven by demand for cloud-based services and from maritime customers[4](index=4&type=chunk) - The company is experiencing strong momentum with its AZT PROTECT™ offering, signing new customers in the steel, concrete, and lumber industries through its reseller and distribution strategy[3](index=3&type=chunk)[4](index=4&type=chunk) - Internationally, the High-Performance Products (HPP) segment secured a follow-up, multi-year contract with a South African cell tower company to deploy AZT PROTECT™[3](index=3&type=chunk)[4](index=4&type=chunk) - The company was added to the Russell 3000® Index, which is anticipated to increase awareness among institutional investors[3](index=3&type=chunk)[4](index=4&type=chunk) - The Board of Directors declared a quarterly dividend of **$0.03 per share**[1](index=1&type=chunk)[4](index=4&type=chunk) [Financial Performance Summary](index=1&type=section&id=Financial%20Performance%20Summary) For the third quarter of fiscal 2025, CSPi's total revenue increased by 18% year-over-year to $15.4 million, primarily driven by a 29% rise in product revenue. However, gross margin declined from 34% to 29% due to the revenue mix, resulting in a net loss of $0.3 million, or $0.03 per share. For the nine-month period, revenue grew to $44.3 million, but net income fell sharply to $0.1 million from $1.3 million in the prior year. The company maintained a strong balance sheet with $26.3 million in cash and equivalents Q3 FY2025 vs Q3 FY2024 Financial Results (in millions) | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $15.4 | $13.1 | +18% | | Product Revenue | $10.2 | $7.8 | +29% | | Service Revenue | $5.3 | $5.3 | Flat | | Gross Profit | $4.5 | $4.6 | -2.2% | | Gross Margin | 29% | 34% | -5 p.p. | | Net Loss | $(0.3) | $(0.2) | Increased Loss | | Diluted EPS | $(0.03) | $(0.02) | Increased Loss | Nine Months FY2025 vs FY2024 Financial Results (in millions) | Metric | Nine Months FY2025 | Nine Months FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $44.3 | $42.2 | +5.0% | | Gross Profit | $13.2 | $15.2 | -13.2% | | Gross Margin | 30% | 36% | -6 p.p. | | Net Income | $0.1 | $1.3 | -92.3% | | Diluted EPS | $0.01 | $0.13 | -92.3% | - The company maintained a robust balance sheet with **$26.3 million** in cash and cash equivalents as of June 30, 2025[7](index=7&type=chunk) - During the quarter, the company repurchased over **19,000 shares** for a total cost of **$0.3 million**, with approximately **0.3 million shares** remaining under the current repurchase authorization[7](index=7&type=chunk) [Detailed Financial Statements](index=6&type=section&id=Detailed%20Financial%20Statements) This section provides a detailed breakdown of CSPi's financial position and performance, showing a decrease in total assets and cash, alongside a widened operating loss and significant drop in nine-month net income [Condensed Unaudited Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Unaudited%20Consolidated%20Balance%20Sheets) As of June 30, 2025, CSPi's total assets were $66.8 million, a decrease from $69.4 million at the end of fiscal year 2024. The decline was primarily driven by a reduction in cash and cash equivalents from $30.6 million to $26.3 million. Total liabilities also decreased to $19.3 million from $22.2 million, while shareholders' equity remained stable at $47.5 million Balance Sheet Summary (in thousands) | Account | June 30, 2025 | September 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $26,308 | $30,585 | | Total current assets | $49,504 | $54,849 | | Total assets | $66,784 | $69,436 | | Total current liabilities | $15,366 | $18,682 | | Total liabilities | $19,300 | $22,166 | | Shareholders' equity | $47,484 | $47,270 | [Condensed Unaudited Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Unaudited%20Consolidated%20Statements%20of%20Operations) The statement of operations for Q3 2025 shows a year-over-year revenue increase to $15.4 million, but a decline in gross profit to $4.5 million. Operating expenses rose to $5.7 million, widening the operating loss to $(1.2) million from $(0.7) million in the prior-year quarter. The net loss attributable to common shareholders was $(264) thousand. For the nine-month period, net income dropped significantly to $94 thousand from $1.24 million a year earlier Statement of Operations - Three Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total sales | $15,448 | $13,105 | | Gross profit | $4,453 | $4,582 | | Operating (loss) income | $(1,223) | $(720) | | Net (loss) income | $(264) | $(185) | Statement of Operations - Nine Months Ended June 30 (in thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Total sales | $44,265 | $42,186 | | Gross profit | $13,224 | $15,155 | | Operating (loss) income | $(2,571) | $171 | | Net income | $100 | $1,330 | [Corporate Information and Outlook](index=3&type=section&id=Corporate%20Information%20and%20Outlook) This section provides an overview of CSPi's business segments, details for the upcoming financial results conference call, and a cautionary statement regarding forward-looking projections [About CSPi](index=3&type=section&id=About%20CSPi) CSPi operates through two distinct segments. The High Performance Product segment, featuring ARIA Cybersecurity Solutions, focuses on protecting critical assets with solutions like AZT for application shielding and ARIA ADR for threat detection. The Technology Solutions segment provides innovative IT solutions, professional services, and managed IT services across key technology areas like security, data center, and networking, by partnering with leading technology providers - The High Performance Product segment (ARIA Cybersecurity) provides solutions to shield critical applications (AZT solution), monitor internal traffic for threat detection (ARIA ADR), and interrogate network packets (AZT Gateway Software)[10](index=10&type=chunk) - The Technology Solutions segment offers managed IT services (24x365 proactive support) and professional services in five key areas: Advanced Security, Communication, Data Center, Networking, and Wireless & Mobility[11](index=11&type=chunk) [Conference Call Information](index=3&type=section&id=Conference%20Call%20Information) CSPi management, including CEO Victor Dellovo and CFO Gary W. Levine, will host a conference call to discuss the financial results and provide a business update. The call is scheduled for 10:00 a.m. (ET) on the day of the release - A conference call with CEO Victor Dellovo and CFO Gary W. Levine is scheduled for **10:00 a.m. (ET)** to review financial results. A live webcast and telephone dial-in options are available[9](index=9&type=chunk) [Forward-Looking Statements (Safe Harbor)](index=5&type=section&id=Forward-Looking%20Statements%20%28Safe%20Harbor%29) The company has issued a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995. This statement cautions that forward-looking projections regarding business performance, revenue, and strategic actions are subject to risks and uncertainties. Actual results may differ materially due to economic, market, and competitive factors as detailed in the company's SEC filings - The company's forward-looking statements include expectations of growing top and bottom lines for the full fiscal year and leveraging its Russell 3000® Index inclusion to attract new customers and investors[12](index=12&type=chunk) - The company warns that actual results could differ materially from these statements due to various risks, including general economic conditions, market factors, and competitive pressures[13](index=13&type=chunk)