LiqTech International (LIQT) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $4.62 million, up 36% sequentially and 9% year-over-year, driven by a record commercial order in oil and gas, growth in water systems and plastics, and new joint venture activity in China.

• Net loss was $2.4 million, nearly unchanged year-over-year, reflecting stable operating expenses and improved expense control.

• Gross margin declined to 2.7% from 6.4% year-over-year, but improved from negative in Q4 2024, impacted by low-margin system delivery and underutilized manufacturing.

• Significant progress in China with the launch of a joint venture, new marine scrubber orders, and a framework agreement for after-sales support.

• Order pipeline is improving across all segments, with broad-based growth expected in Q2 and beyond.

Financial highlights

• Q1 2025 revenue: $4.62 million (up from $4.2 million YoY and $3.4 million sequentially).

• Water system sales: $2.69 million (up from $1.55 million YoY); DPF and ceramic membrane sales: $953,846 (down from $1.81 million YoY); plastics revenue: $969,973 (up from $880,342 YoY).

• Gross profit: $125,056; gross margin: 2.7%.

• Net loss: $2.4 million, unchanged YoY.

• Cash and restricted cash: $10.4 million at March 31, 2025.

Outlook and guidance

• Q2 2025 revenue expected between $4.8 million and $5.2 million, a 4%-13% sequential and 7%-16% YoY increase.

• Revenue growth anticipated across all segments, with less dependence on large orders and improved gross margins from better manufacturing utilization and cost-saving initiatives.

• Break-even target on adjusted EBITDA basis lowered to $5.5-$6 million quarterly revenue.

• Management expects cash on hand and operating cash flow to cover capital requirements for the next 12 months, but notes significant macroeconomic uncertainties.

• Cost-saving initiatives fully implemented, expected to further improve profitability in Q2.