TOMI Environmental Solutions (NASDAQ: TOMZ) reported third‑quarter 2025 results that included a revenue miss and earnings that matched analyst expectations. Total revenue fell to $2.0 million, 5.7 percent below the $2.12 million consensus estimate, while earnings per share were $‑0.02, exactly in line with the $‑0.02 forecast. The company posted a net loss of $450,000 and an operating loss of $320,000, but maintained a strong gross profit margin of 61 percent, the same level as the prior year’s quarter.
The revenue shortfall was largely driven by a temporary reduction in iHP services sales from a key customer, a headwind that offset the 95 percent sequential increase in revenue. The sequential growth was powered by higher equipment sales and recurring BIT™ Solution sales, which helped offset the decline in legacy service revenue. Year‑over‑year, revenue dropped 24 percent to $2.0 million, reflecting the impact of the customer’s re‑organization and the broader competitive environment in the disinfection market.
EPS held steady because the company disciplined costs and leveraged its high‑margin core business. The 61 percent gross margin, supported by pricing power in the SteraMist® product line, helped offset the operating loss and kept earnings in line with expectations. The CFO noted that the loss of the key customer’s iHP services was a one‑time event, and that the company’s cost structure remains robust as it scales recurring revenue streams.
Management guided for a cautious outlook for the remainder of 2025, forecasting Q4 EPS of $‑0.02 and a FY2025 EPS of $‑0.11. For FY2026, the company projected a positive EPS of $0.09, signaling confidence in the growth of its recurring revenue model and the expansion of its international footprint. The guidance reflects the company’s belief that the temporary customer loss will not materially affect long‑term profitability.
CEO Dr. Halden Shane highlighted the quarter as a “decisive turning point,” emphasizing the new growth engine built on recurring revenue and the company’s expansion into new markets following recent FDA approvals for hydrogen‑peroxide‑based solutions. CFO David Vanston underscored the temporary nature of the iHP services decline and reiterated the company’s focus on cost discipline. TOMI also secured an equity purchase agreement for up to $20 million with Hudson Global Ventures to support growth initiatives, and its SteraMist® line was named “Disinfection and Decontamination Products Company of the Year 2025.” The company is also working with a key defense site to replace formaldehyde, a development expected to materialize in 2026.
Comparing to the prior quarter, Q3 2024 revenue was $2.542 million, net income was $58,000, and EPS was $0.00. The current quarter’s revenue decline and net loss highlight ongoing profitability challenges, but the sequential revenue growth and strong gross margin suggest that the company’s strategic focus on recurring revenue and international expansion is beginning to pay off.
The business implications are mixed: while the company remains unprofitable with a net loss and operating loss, its gross margin strength and sequential revenue growth indicate resilience in its core offerings. The temporary loss of a key customer’s services is a short‑term headwind, but the company’s emphasis on recurring revenue, new FDA approvals, and strategic equity financing positions it to pursue sustainable growth and potentially return to profitability in the near future.
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