CSPi Reports Fiscal 2025 Second Quarter Results; AZT PROTECT New Business Pipeline Continues to Increase Globally
- Strong cash position of $29.5 million with no long-term debt
- Secured new AZT PROTECT customers globally, including South African cell tower provider
- Six-figure contract renewal with global pharmaceutical company
- Active share repurchase program with 23,800 shares bought for $384,000
- Double-digit sales growth excluding prior year's multi-million dollar deal
- Net loss of $(0.1) million compared to $1.6 million profit in Q2 2024
- Revenue declined to $13.1 million from $13.7 million year-over-year
- Services revenue decreased to $4.6 million from $5.2 million
- Gross margin declined to 32% from 47% year-over-year
Insights
CSPi reported mixed Q2 results with declining revenue and margins, offset by strong cash position and growing AZT PROTECT pipeline.
CSPi's Q2 FY2025 results reveal a complex performance picture. Revenue decreased to
The company's gross margin contracted significantly to
However, looking beyond the headline numbers reveals important context. Management attributes the year-over-year decline to a one-time multi-million-dollar deal in the prior year period. Excluding this transaction, they claim double-digit sales growth occurred, though specific organic growth figures weren't provided.
The company's balance sheet remains exceptionally strong with
The strategic focus on their AZT PROTECT cybersecurity product line shows promising momentum. New customer acquisitions continue, including international expansion with a South African cell tower provider. The existing customer base also demonstrates retention value, evidenced by a six-figure support contract renewal from a global pharmaceutical client. Their go-to-market strategy emphasizes reseller relationships, which appears to be gaining traction with an expanding pipeline.
For the six months ended March 31, 2025, CSPi reported total revenue of
Board Declares
LOWELL, MA / / May 14, 2025 / CSP Inc. (NASDAQ:CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, today announced results for the fiscal second quarter ended March 31, 2025. The Company also announced that the Board of Directors declared a quarterly dividend of
Recent Achievements and Operating Highlights
Continued AZT PROTECT鈩� marketplace momentum results in additional new customers during the fiscal second quarter including a South African cell tower provider.
Global pharmaceutical company renewed twelve months' customer support for AZT PROTECT in a six-figure contract.
Strengthened reseller relationships with Rockwell Automation and others led to greater market exposure via webinars and regional events and an expanded pipeline.
In April, we signed multi-year contracts with a Florida-based healthcare provider.
Ended the quarter with over
$29 million in cash and cash equivalents and no long term debt; Robust balance sheet enabled the Company to repurchase 23,800 shares of CSPI common stock for$384 thousand during the fiscal second quarter.
"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 pleased with the overall performance of the Technology Solutions-based businesses and the market penetration of our AZT PROTECT product line. The flexibility of our organization, and the prospects for AZT PROTECT growth enable our company to maximize our opportunities in the current operating environment."
"During the quarter, our reseller and distribution-focused strategy resulted in an increase in new AZT PROTECT customers and an expanded pipeline of new business opportunities. Launching a revolutionary new product requires significant investment, which we have been diligently making while carefully managing our resources. Nearly two years into the launch, we are where we thought we would be, our brand is more widely known, and we are gaining traction with key manufacturers, resellers and customers. In addition to the new customers signed in the fiscal second quarter, in April we were engaged to protect equipment at one of the largest cell tower providers in South Africa. This relationship, along with several other previously signed customers, have the potential to significantly expand into larger, six and seven figure contracts over the next eighteen months to two years."
Fiscal 2025 Second Quarter Results
Revenue for the fiscal second quarter ended March 31, 2025, was
Gross profit for the three months ended March 31, 2025, was
The Company continued to maintain a robust balance sheet and as of March 31, 2025, had cash and cash equivalents of
Fiscal Year 2025 Six Month Results
Revenue for the fiscal six months ended March 31, 2025, was
Conference Call Details
CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi's financial results and provide a business update. To listen to a live webcast of the call, the event link . Individuals also may listen to the call via telephone, by dialing 973-528-0011 or 888-506-0062 and use the Participant Access Code: 300898 when greeted by the live operator. For interested parties unable to participate in the live call, an archived version of the webcast will be available for approximately one year on CSPi's website.
About CSPi
(NASDAQ:CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help customers use technology to success. The High Performance Product division, including , recognizes that better, stronger, more鈥痚ffective cybersecurity starts with a smarter approach. ARIA's solutions provide new ways for organizations to protect their most critical assets-they can shield their critical applications from cyberattack with the AZT solution, while monitoring internal traffic, device-level logs, and alert output with our ARIA ADR solution to鈥痵ubstantially鈥痠mprove threat detection and surgically disrupt cyberattacks and data exfiltration. Rounding out the portfolio, Aria's AZT Gateway Software allows us to interrogate network packets at 100mbps line-rate to enforce forwarding and capture policies on the fly. Customers in a range of industries rely on our solutions to accelerate incident response, automate breach detection, and protect their most critical assets and applications-no matter where they are stored, used, or accessed.
CSPi's helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24脳365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility.
Safe Harbor
The Company wishes to take advantage of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act. Such forward-looking statements may include but are not limited to projections or guidance concerning business performance, revenue, earnings, cash flow, the current economic environment, liquidity, strategic decisions and actions, and other financial and operational measures. Statements include we were engaged to protect equipment at one of the largest cell tower providers in South Africa. This relationship, along with several other previously signed customers, has the potential to significantly expand into larger, six and seven figure contracts over the next eighteen months to two year.
The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others described in the Company's filings with the Securities and Exchange Commission ("SEC"). Please refer to the section on forward-looking statements included in the Company's filings with the SEC.
CONTACT:
CSP Inc.
Gary Levine, 978-954-5040
Chief Financial Officer
CSP INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(Amounts in thousands) | ||||||||
March 31, 2025 | September 30, 2024 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 29,495 | $ | 30,585 | ||||
Accounts receivable, net | 13,645 | 14,494 | ||||||
Financing receivables, net | 2,727 | 4,384 | ||||||
Inventories | 2,109 | 2,293 | ||||||
Other current assets | 2,366 | 3,093 | ||||||
Total current assets | 50,342 | 54,849 | ||||||
Financing receivables due after one year, net | 3,664 | 2,922 | ||||||
Cash surrender value of life insurance | 5,696 | 5,589 | ||||||
Other assets | 7,420 | 6,076 | ||||||
Total assets | $ | 67,122 | $ | 69,436 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities | $ | 15,058 | $ | 18,682 | ||||
Pension and retirement plans | 1,275 | 1,306 | ||||||
Other non-current liabilities | 3,336 | 2,178 | ||||||
Shareholders' equity | 47,453 | 47,270 | ||||||
Total liabilities and shareholders' equity | $ | 67,122 | $ | 69,436 | ||||
CSP INC. AND SUBSIDIARIES | ||||||||||||||||
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
(Amounts in thousands, except per share data ) | ||||||||||||||||
Three months ended | Six months ended | |||||||||||||||
March 31 | March 31 | March 31 | March 31 | |||||||||||||
2025 | 2024 | 2025 | 2024 | |||||||||||||
Sales: | ||||||||||||||||
Product | $ | 8,552 | $ | 8,458 | $ | 19,567 | $ | 19,865 | ||||||||
Services | 4,595 | 5,248 | 9,250 | 9,216 | ||||||||||||
Total sales | 13,147 | 13,706 | 28,817 | 29,081 | ||||||||||||
Cost of sales: | ||||||||||||||||
Product | 6,879 | 5,416 | 15,998 | 14,644 | ||||||||||||
Services | 2,061 | 1,812 | 4,048 | 3,864 | ||||||||||||
Total cost of sales | 8,940 | 7,228 | 20,046 | 18,508 | ||||||||||||
Gross profit | 4,207 | 6,478 | 8,771 | 10,573 | ||||||||||||
Operating expenses: | ||||||||||||||||
Engineering and development | 763 | 726 | 1,549 | 1,426 | ||||||||||||
Selling, general and administrative | 4,438 | 4,518 | 8,570 | 8,256 | ||||||||||||
Total operating expenses | 5,201 | 5,244 | 10,119 | 9,682 | ||||||||||||
Operating (loss) income | (994 | ) | 1,234 | (1,348 | ) | 891 | ||||||||||
Other income, net | 203 | 489 | 914 | 772 | ||||||||||||
(Loss) income before income taxes | (791 | ) | 1,723 | (434 | ) | 1,663 | ||||||||||
Income tax (benefit) expense | (683 | ) | 135 | (798 | ) | 148 | ||||||||||
Net (loss) income | $ | (108 | ) | $ | 1,588 | $ | 364 | $ | 1,515 | |||||||
Net (loss) income attributable to common shareholders | $ | (108 | ) | $ | 1,482 | $ | 341 | $ | 1,417 | |||||||
Net (loss) income per common share - basic | $ | (0.01 | ) | $ | 0.16 | $ | 0.04 | $ | 0.16 | |||||||
Weighted average shares outstanding - basic | 9,343 | 9,070 | 9,232 | 8,967 | ||||||||||||
Net (loss) income per common share - diluted | $ | (0.01 | ) | $ | 0.16 | $ | 0.04 | $ | 0.15 | |||||||
Weighted average shares outstanding net income - diluted | 9,343 | 9,455 | 9,614 | 9,366 | ||||||||||||
SOURCE: CSP, Inc.
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FAQ
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