Caesarstone (CSTE) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $99.6 million, down 15.8% year-over-year, mainly due to lower volumes amid global economic headwinds and increased competition, but sequential improvement in revenues and adjusted EBITDA reflect progress in strategic transformation and operational flexibility from shifting over 70% of production to a global manufacturing network.

• Gross margin declined to 21.3% from 24.5% year-over-year, impacted by unfavorable product mix and lower fixed cost absorption, partially offset by restructuring and production optimization.

• Net loss attributable to controlling interest widened to $12.9 million ($0.37/share) from $5.1 million ($0.15/share) in Q1 2024; adjusted net loss per share was $0.29.

• Adjusted EBITDA was a loss of $7.1 million, compared to a gain of $0.6 million in the prior year quarter.

• Strong balance sheet with a net cash position of $85.3 million as of March 31, 2025, providing financial flexibility for continued investment.

Financial highlights

• Q1 2025 global revenue was $99.6 million, down from $118.3 million year-over-year; constant currency revenue declined 14.5%.

• U.S. sales fell 19.4% to $49.1 million, Canada sales declined 11.5% (constant currency), and Australia sales dropped 28.2% (constant currency); EMEA and Israel saw growth of 16.4% and 13.2% respectively.

• Gross profit fell to $21.2 million (adjusted), down from $28.9 million year-over-year.

• Operating loss increased to $14.8 million from $5.6 million year-over-year, mainly due to lower gross profit and higher legal settlements.

• Cash and equivalents plus short-term deposits totaled $88.8 million; total debt was $3.5 million.

Outlook and guidance

• Full year outlook for 2025 has been withdrawn due to macroeconomic pressures and new U.S. tariffs; management is assessing the impact and focusing on cost optimization and strategic investments.

• Expectation of $10 million in incremental cost savings in 2025 from ongoing optimization initiatives.

• Anticipates gradual revenue increase through the year based on historical seasonality and ongoing actions, despite weak macroeconomic conditions.