ECD Automotive Design Inc. (ECDA) reported third‑quarter 2025 revenue of $5.8 million, a decline of 9% from $6.4 million in the same quarter last year and 17% from $7.0 million in Q2 2025. The company posted a net income of $2.2 million, but the figure is largely driven by a $10.5 million non‑cash gain from the conversion of debt into preferred stock. Operating results were negative, with an operating loss of $5.0 million and a gross loss of $1.7 million, a sharp reversal from the $2.0 million gross profit reported in Q3 2024.
The revenue decline reflects the completion of legacy builds and elevated tariff‑related costs that increased shipping and customs fees. While bespoke project revenue remained stable, the company’s legacy‑build segment, which had been a significant contributor to revenue in prior quarters, saw a sharp contraction. The combination of higher input costs and a shift in the product mix contributed to the 31% gross margin in Q3 2024 falling to a negative margin in Q3 2025.
Operating expenses rose by $0.8 million, driven primarily by higher general and administrative costs and a $0.8 million increase in legal fees related to ongoing litigation. A lease recognition charge also contributed to the operating loss. Management has announced cost‑containment initiatives expected to generate more than $1 million in annualized savings, but the current expense profile indicates that the company is still under significant pressure.
Liquidity remains a critical concern. As of September 30, 2025, ECDA held only $157,682 in cash and faced a working‑capital deficit of $6,006,891. Management disclosed substantial doubt about the company’s ability to continue as a going concern within one year, underscoring the urgency of securing additional financing.
CEO Scott Wallace emphasized that the quarter represented progress in right‑sizing the cost structure and building a more sustainable operational foundation. He noted that the groundwork laid in Q3 2025 would translate into improved financial performance in the coming year, but the statement did not address the immediate liquidity challenges. Investors reacted with cautious optimism, reflecting the tension between the company’s operational improvements and the underlying financial fragility.
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