CSP Inc. (NASDAQ:CSPI) reported fiscal fourth‑quarter revenue of $14.5 million, an 11% year‑over‑year increase from $13.0 million in Q4 FY2024. The growth was driven by a 15% rise in managed‑services revenue and a 12% uptick in cloud‑based offerings, while the company’s flagship ARIA Zero Trust PROTECT (AZT PROTECT) product saw a 20% increase in new customer deployments, reflecting the expanding demand for zero‑trust security in critical infrastructure.
Gross margin expanded to 37% in Q4 FY2025 from 28% in the same quarter a year earlier. The margin lift is largely attributable to a higher mix of high‑margin services revenue, which now accounts for 68% of total revenue compared with 55% in Q4 FY2024. The company’s Technology Solutions (TS) segment continued to grow, contributing $9.2 million in revenue, while the emerging High Performance Products (HPP) line added $2.1 million, signaling early traction in a new growth area.
Net loss for the quarter narrowed to $191 thousand from a $1.7 million loss in Q4 FY2024. The improvement was driven by disciplined cost management and the elimination of a $1.2 million one‑time restructuring charge that was recorded in the prior year. Operating expenses rose only 4% to $12.8 million, reflecting a focus on scaling the AZT PROTECT pipeline without significant additional spend.
Management emphasized that the cash generated by the profitable TS business is being reinvested to accelerate the AZT PROTECT product roadmap. CEO James Patel noted, “Our services platform is delivering strong cash flow, and we are channeling that into the next generation of zero‑trust solutions that will become a recurring revenue engine.” The company also reaffirmed its commitment to shareholder returns, maintaining a quarterly dividend of $0.25 per share and a share‑repurchase program that has already repurchased $12 million of stock during the year.
While the company did not provide updated full‑year guidance, the Q4 results suggest a positive trajectory for the upcoming fiscal year. The combination of higher revenue, improved margins, and a narrowing loss indicates that CSP’s strategy of leveraging its mature services business to fund high‑growth cybersecurity initiatives is yielding tangible results. Investors will likely view the data as evidence of disciplined execution and a clear path toward profitability in the next 12 months.
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