Enwave Corp ((TSE:ENW)) has held its Q3 earnings call. Read on for the main highlights of the call.
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The recent earnings call for EnWave Corp reflected a cautiously optimistic outlook, highlighting notable achievements such as increased revenue, successful capital raising, and expansion with existing partners. However, challenges like decreased gross margins and an adjusted EBITDA loss were also evident, indicating areas that require attention.
Increase in Revenue
EnWave Corp reported a 5% year-over-year increase in revenue for Q3, totaling $2.75 million. This growth was consistent quarter-to-quarter, showcasing the company’s ability to maintain steady financial performance despite market challenges.
Successful Capital Raise
The company successfully closed a fully subscribed $3 million LIFE Offering. This capital raise will enable the manufacture of two large-scale REV Machines, which are expected to enhance the company’s inventory and production capabilities.
Positive Sales Pipeline
EnWave is currently negotiating with four counterparties for potential near-term large-scale REV Machine purchases. The company anticipates superior machine sale performance in fiscal year 2026, indicating a promising future for its sales pipeline.
Expansion with Existing Partners
EnWave’s existing partners, MicroDried and Procescir, have expanded their production capacity. MicroDried purchased two 60-kilowatt machines, while Procescir delivered a 120-kilowatt machine for immediate production, reflecting strong partner relationships and growth.
Growth in Royalty Revenue
Third-party royalty revenue saw a modest increase of 1% in Q3 2025 compared to the previous year, and an 11% increase for the nine months ended June 30. This growth demonstrates the company’s ability to generate consistent royalty income.
Decreased Gross Margin
The gross margin for Q3 2025 was 19%, a significant drop from 44% in the comparative period. This decline was primarily due to a production sales mix and a bulk discount to MicroDried, highlighting a challenge in maintaining profitability.
Adjusted EBITDA Loss
EnWave reported an adjusted EBITDA loss of $570,000 for Q3 2025, compared to an adjusted EBITDA of $85,000 for Q3 2024. This loss underscores the financial pressures the company faces despite revenue growth.
Termination of U.S. Cannabis Partner License
The termination of a license with a U.S. cannabis partner impacted royalty revenue. However, this was offset by growth from other partners, indicating resilience in the company’s royalty revenue streams.
Forward-Looking Guidance
EnWave Corp’s CEO, Brent Charleton, provided guidance indicating optimism for Q4, driven by potential large-scale REV machine transactions. The company plans to complete the commissioning of several machines for MicroDried and anticipates margin recovery in future quarters. EnWave is actively negotiating for large-scale machine sales and expanding in market verticals such as fruit and vegetables, dairy, and pet food. The recent $3 million private placement will support further manufacturing, positioning the company for accelerated growth.
In summary, EnWave Corp’s earnings call highlighted a cautiously optimistic outlook, with achievements in revenue growth and capital raising. However, challenges such as decreased gross margins and an adjusted EBITDA loss were noted. The company’s forward-looking guidance suggests potential improvements and strategic expansions, indicating a promising trajectory for future growth.