Nephros (NEPH) investor relations material

Executive summary

• Achieved record net revenue of $6 million for Q2 2026, a 36% increase year-over-year, with net income rising to $1.2 million from $0.2 million in Q2 2025, aided by a one-time $0.6 million tariff refund.

• Growth was broad-based across core programmatic products, services, and emergency response, with service revenue nearly tripling year-over-year and core programmatic revenue up 27%.

• Recent product launches and expanded service offerings contributed to growth and market expansion, with the business evolving into an integrated water safety platform.

• Revenue for the first six months of 2026 rose 21% to $11.2 million, reflecting diversification across channels.

• The company operates a single segment focused on high-performance water filtration solutions for medical and commercial markets.

Financial highlights

• Q2 2026 net revenue: $6 million (up from $4.4 million in Q2 2025); gross margin for Q2 2026 was 67%, up from 63% in Q2 2025, primarily due to a $600,000 tariff refund.

• Net income for Q2 2026 increased over 400% to $1.2 million; adjusted EBITDA rose 260% to $1.3 million.

• Six-month net income increased 68% to $1.3 million; adjusted EBITDA up 46% to $1.5 million.

• Ended Q2 2026 with $4.7 million in cash and no debt; working capital increased to $10.3 million, and stockholders’ equity rose to $12.0 million.

• Q2 2026 EPS (basic and diluted): $0.11; six-month EPS: $0.12.

Outlook and guidance

• Expectation for continued growth driven by core programmatic products, expanding service offerings, and new products addressing PFAS, microplastics, and nanoplastics.

• Margin improvement remains a focus, with ongoing evaluation of pricing, sourcing, and operational efficiencies.

• Management expects sufficient liquidity to fund operations for at least the next 12 months, with a focus on revenue growth and expense control.

• Gross margins may face headwinds due to ongoing U.S. tariff policy despite the recent refund.

• Investments in technology and service platform position the company for long-term shareholder value.