Tomi Environmental Solutions, Inc. ((TOMZ)) has held its Q2 earnings call. Read on for the main highlights of the call.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
In the recent earnings call, Tomi Environmental Solutions, Inc. painted a mixed picture of its financial health. The company reported significant growth in service revenue and improved gross margins, but these positive developments were overshadowed by notable declines in overall revenue and operating losses. While there are promising opportunities on the horizon, the current financial challenges remain substantial.
Service Revenue Growth
The company reported a 33% growth in service revenue from iHP service deployments and validation support services compared to the same period last year. This growth was even more pronounced over the first six months, with a 46% increase, highlighting a strong demand for these services.
Gross Margin Improvement
Tomi Environmental Solutions saw an improvement in its gross margin, which rose to 66% from 62% in the same quarter last year. This increase is attributed to higher sales of solution and service offerings, demonstrating the company’s ability to enhance profitability despite overall revenue challenges.
BIT Solution Sales Increase
The company experienced a 40% increase in BIT Solution sales year-to-date. This growth is expected to continue, with repeat orders anticipated in the latter half of the year, indicating a positive trend in this segment.
NASA Project Validation
A significant milestone was achieved with the successful validation of the NASA project, which is now operational. The company is collaborating with NASA on writing a publication, showcasing its expertise and expanding its reach in high-profile projects.
Recognition and Awards
Tomi’s SteraMist was recognized as the Disinfection and Decontamination Products Company of the Year for 2025, a testament to the company’s leadership and innovation in the industry.
Significant Revenue Decline
Despite the positive developments, the company faced a 66% decline in revenue, falling to $1.031 million from $3 million in the second quarter of 2024. This decline was primarily due to deferred capital expenditure projects, posing a significant challenge to the company’s financial stability.
Operating and Net Loss
The financial report revealed an operating loss of approximately $1.1 million and a net loss of $1.28 million, a stark contrast to the operating income and net income reported in the same period last year.
Cash and Financial Position
As of June 30, 2025, Tomi’s cash and cash equivalents stood at approximately $569,000, with a working capital of $2.8 million and shareholders’ equity of $2.7 million, reflecting a cautious financial position.
Forward-Looking Guidance
Looking ahead, Tomi Environmental Solutions is negotiating approximately $2 million in new custom and integrated contracts, with $15 million in open opportunities across its product offerings. Of these, $7 million are designated as high priority, indicating potential for future revenue growth. The company’s collaboration with NASA and a notable SIS platform win totaling over $180,000 further underscore its strategic initiatives.
In summary, Tomi Environmental Solutions, Inc. is navigating a challenging financial landscape with a mix of promising growth in service revenues and gross margins, countered by significant revenue declines and operating losses. The company’s strategic collaborations and recognition in the industry offer a glimmer of hope for future recovery and growth.