ClearSign Combustion ((CLIR)) has held its Q3 earnings call. Read on for the main highlights of the call.
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ClearSign Combustion’s recent earnings call presented a mixed sentiment, highlighting both achievements and challenges. The company reported improvements in gross margins and expansion across product lines, alongside successful testing and new orders from major clients. However, financial challenges such as reduced revenue, increased net loss, and higher cash usage were also noted. While the company is on a growth trajectory, these financial hurdles suggest a need for cautious optimism.
Improved Gross Margin
ClearSign Combustion reported a significant improvement in gross margins, with an increase of approximately 6.1 percentage points in Q3 2025 compared to the same period in 2024. Year-to-date, the gross profit margin increased by 5.3 percentage points, aligning with the company’s long-term strategy of targeting margins between 40% and 45%.
Expansion Across Product Lines
The company experienced an uptick in order flow across major product lines, including process burners, flares, and the new M series line. This growth is driven by regulatory pressures and increased customer trust, indicating a positive reception of ClearSign’s expanding product portfolio.
Successful Completion of Hydrogen Burner Testing
ClearSign successfully completed testing for a 100% hydrogen-capable burner for a petrochemical client. This achievement showcases the product’s versatility and robustness, aligning with global fuel requirements and positioning the company as a leader in innovative combustion solutions.
New Orders from Major Clients
The company received engineering orders from a new super major for retrofitting process heaters in California and an integrated petroleum producer for 36 burners in the U.S. Gulf Coast. These orders underscore ClearSign’s growing reputation and client base.
Progress in Sensor Product Line
The ClearSign Eye sensor product is now operational in a client’s team, leading to further quoting opportunities for a sister refinery. This progress highlights the potential for growth in the sensor product line.
Strong Relationship with Zeeco
ClearSign continues to enjoy a strong relationship with Zeeco, marked by ongoing support and collaboration. Extensive testing and fabrication of burners have led to potential new proposals from Zeeco’s sales team, indicating a fruitful partnership.
Decrease in Quarterly Revenue
Q3 2025 revenue was approximately $1 million, down from $1.9 million in the same period in 2024. This decrease is primarily attributed to a large order in the prior year that accounted for about 50% of 2024 annual revenue.
Increased Net Loss
The company’s net loss increased by approximately $274,000 compared to the same period in 2024, driven by decreased sales volume. This highlights the financial challenges ClearSign is currently facing.
Higher Cash Usage
Net cash used in operations for Q3 2025 was approximately $1.8 million, compared to $1.4 million in the same period in 2024. This increase is driven by the change in net loss, reflecting the company’s need to manage cash flow effectively.
Forward-Looking Guidance
Despite a decrease in sales, ClearSign witnessed a 6.1 percentage point increase in gross margin year-over-year, aligning with their strategy to target gross margins of 40% to 45%. The company attributes the increase in order flow to regulatory pressures and the acceptance of their evolving product portfolio by major clients. As of September 30, 2025, ClearSign held $10.5 million in cash and cash equivalents, with 52.5 million shares of common stock outstanding.
In summary, ClearSign Combustion’s earnings call reflects a company navigating both growth and financial challenges. While achievements in product expansion and client acquisition are promising, the financial hurdles of reduced revenue and increased net loss necessitate cautious optimism. Investors and stakeholders should monitor these developments closely as ClearSign continues its growth journey.