Tomi Environmental Solutions, Inc. ((TOMZ)) has held its Q4 earnings call. Read on for the main highlights of the call.
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The recent earnings call for Tomi Environmental Solutions, Inc. painted a largely positive picture, underscored by robust growth in product lines and successful strategic partnerships. Despite facing challenges such as non-cash expenses affecting financial outcomes and a pressing need for additional capital, the overall sentiment remains optimistic. This is primarily due to the company’s substantial growth and strategic advancements.
Record Year for Custom Engineered Systems
Tomi Environmental Solutions reported a record year for its Custom Engineered Systems (CES), maintaining an expanding pipeline with eight deals valued at approximately $3.7 million. The company is currently in discussions regarding 46 different projects, with 12 being very active. They anticipate closing five deals in 2025, which are expected to yield around $1.4 million.
Launch of SteraMist Integrated System
In October 2024, Tomi launched the SteraMist Integrated System, which has already shown promising potential. The pipeline for this product has grown to over $1 million, with contracts for three additional SIS offerings totaling approximately $575,000 in sales.
Expansion and Partnerships
The company has expanded its global reach by signing six new partners across various regions, including Malaysia, India, Italy, Canada, South Korea, and the UK. A notable achievement was their Malaysian partner’s standardization of treatments using iHP technology in biosafety Level 3 rooms.
Positive Trends in BIT Solution Sales
BIT Solution sales have experienced a remarkable 200% increase year-to-date compared to the same period last year, indicating strong organic growth and a positive reception in the market.
Growth in iHP Corporate Service
The iHP Corporate Service division saw a 42% increase in Q1 2025 compared to the same period last year, demonstrating strong performance and retention of long-term clients.
Financial Performance
Tomi reported a GAAP revenue increase to $7.739 million in 2024, up from $7.355 million in 2023. Non-GAAP revenue was approximately $8 million, reflecting a nearly 6% increase over the previous year. However, one-time non-cash expenses impacted GAAP results, with an operating loss of $4.105 million compared to $3.349 million in the prior year.
Impact of Non-Cash Expenses
The company’s financial results were affected by one-time non-cash expenses, which contributed to a GAAP operating loss of $4.105 million, compared to $3.349 million in the previous year.
Returned Orders
Three orders were returned in Q4 2024, contributing to lower reported revenue. These returns were due to changes in the scope of use and a federal grant being pulled.
Cash Flow Concerns
While cash flow for 2024 was lower than desired, the company anticipates improvements in 2025 due to better execution and timing of progress payments.
Need for Additional Capital
To address cash constraints and support future growth, Tomi plans to raise $3-3.5 million through convertible notes.
Forward-Looking Guidance
Looking ahead, Tomi Environmental Solutions provided optimistic guidance for the future. The company expects to close additional CES and hybrid system deals in 2025, anticipated to yield around $1.4 million. BIT Solutions sales are projected to grow by 9%, reaching approximately $900,000, while mobile equipment sales are expected to increase by 23% to around $3.8 million. The company also plans to improve its non-GAAP gross margins and bolster its cash position through convertible notes.
In summary, Tomi Environmental Solutions, Inc. has demonstrated strong growth and strategic advancements, despite facing some financial challenges. The company’s expansion efforts, product launches, and successful partnerships are driving a positive outlook for the future, making it an interesting prospect for investors and stakeholders in the financial markets.