CSP (CSPI) Q1 2025 earnings summary

Executive summary

• Fiscal Q1 2025 revenue rose 2% year-over-year to $15.7 million, with service revenue up 17% to $4.7 million, driven by Technology Solutions segment growth and new AZT PROTECT customers.

• Gross margin expanded by over 200 basis points to 29.1%, and net income reached $472,000 ($0.05 per diluted share), reversing a net loss of $73,000 in the prior year.

• Cash and cash equivalents stood at $30.7 million as of December 31, 2024, supporting ongoing investment and a $0.03 per share quarterly dividend.

• Growth was driven by cloud-based and recurring revenue, new managed service contracts in cruise and ocean freight markets, and increased demand for OT cybersecurity.

• Operating loss was $354,000, similar to the prior year, but higher other income and a tax benefit contributed to positive net income.

Financial highlights

• Q1 2025 revenue was $15.7 million, up from $15.4 million year-over-year and $13 million sequentially.

• Service revenue reached $4.7 million, up from $4 million in both the prior year and previous quarter.

• Gross profit was $4.6 million (29.1% margin), compared to $4.1 million (26.6%) a year ago.

• Net income was $472,000 ($0.05 per diluted share), reversing a net loss of $73,000 ($0.01 per share) in the prior year.

• Cash and cash equivalents stood at $30.7 million as of December 31, 2024.

Outlook and guidance

• Management expects a significant increase in AZT PROTECT revenue in fiscal 2025, budgeting for a ramp-up this year.

• Plans to leverage momentum, expand recurring revenue, and scale AZT PROTECT business through partnerships.

• Anticipates Rockwell distribution partners to begin generating sales in the next quarter, with a focus on middle-market OT customers for faster sales cycles.

• Management expects available cash, cash from operations, and line of credit to be sufficient for at least 12 months.

• Focus remains on higher-margin offerings and sustained profitability.