CPS Technologies Posts Y/Y Rise in Q3 Earnings, Eyes Strong '26 Growth

Core Insights - CPS Technologies Corporation (CPSH) reported record revenues of $8.8 million for Q3 2025, more than doubling the $4.2 million from the same quarter last year, driven by strong demand for its core products [2][4] - The company achieved a gross profit of $1.5 million, resulting in a gross margin of 17.1%, a significant improvement from a gross loss of $0.5 million and a negative margin of 12.3% in the prior year [2][3] - Operating profit turned positive at $0.3 million, reversing from a $1.5 million loss a year earlier, while net income was $0.2 million (1 cent per share), compared to a net loss of $1 million (7 cents per share) in the same period of 2024 [3][6] Revenue Growth and Profitability - The third consecutive quarter of record revenues indicates an accelerating growth trajectory for CPS Technologies, with increased shipping volumes and strong customer demand as key drivers [4][10] - The gross margin improved due to enhanced manufacturing efficiencies and increased production throughput, while SG&A expenses rose to $1.2 million from $1 million last year, reflecting disciplined cost control [5][6] - Management expressed confidence in sustaining growth momentum into 2026, supported by a successful $9.5 million secondary offering aimed at expanding manufacturing capabilities [8][14] Contracts and Federal Programs - CPSH secured a $15.5 million contract from a multinational semiconductor manufacturer, marking a 16.5% year-over-year increase, to be fulfilled over 12 months starting October 1, 2025 [11] - The company also received two federal contracts totaling $1.275 million, enhancing its presence in federally funded research, bringing the total federal program count for 2025 to six [12][13] Future Outlook and Strategic Initiatives - The company anticipates completing its manufacturing relocation by the end of 2026, which is expected to nearly double usable floor space and support long-term growth [8][14] - CPSH is focusing on expanding contributions from its ALMAX material and radiation shielding solutions, which are seen as significant commercial opportunities [15] - The balance sheet remains strong, with $3.2 million in cash and $1.1 million in marketable securities, alongside an increase in total assets to $20.4 million from $18.9 million at the end of 2024 [17]