0001421517-26-000041
SEC filingRevenue grew 20% year-over-year to $9.7M, driven by desalination OEM strength offsetting aftermarket declines, but profitability eroded sharply with gross profit down 39% to $2.7M and operating loss widening to -$14.9M due to elevated costs, partially mitigated by $21.0M operating cash flow.
Gross profit fell sharply 39.4% to $2.7 million, compressing the gross margin to 27.8%. Cost of revenue, comprising raw materials, personnel costs including stock-based compensation, manufacturing overhead, warranty, and depreciation, outpaced top-line gains due to unfavorable product mix and pricing dynamics. This highlights the sensitivity of margins to input costs and volume mix in a capital-intensive manufacturing environment, where scale is key to profitability.
Net loss deepened to -$12.3 million or -$0.23 diluted EPS from -$9.9 million or -$0.18, aligning with broader income statement pressures. Despite headline losses, net cash from operating activities surged to $21.0 million from $10.7 million, driven by timing of receipts from large project orders—a noted source of quarter-to-quarter fluctuation. After $0.8 million in capital expenditures, free cash flow reached $20.2 million, demonstrating underlying business cash conversion strength even amid reported losses.