Nanalysis Scientific (NSCI) Q4 2024 earnings summary

Executive summary

• Achieved record annual revenue of CAD 45.5 million (up 60% year-over-year) and record Q4 revenue of CAD 12.3 million (up 25%), with strong momentum into Q1 2025 and a focus on sustainable profitability and margin expansion.

• Adjusted EBITDA reached CAD 1.8 million in Q4 and CAD 2.8 million for 2024, both significant improvements over prior periods, driven by operational improvements and service segment growth.

• Strategic shift to prioritize proprietary products and services, reducing third-party equipment sales to improve margins.

• Revenue growth driven by expansion in both product sales and security services segments.

• Operational focus on manufacturing efficiencies and service delivery improvements led to higher gross margins and positive cash flow.

Financial highlights

• Q4 2024 revenue was CAD 12.3 million, up 25% year-over-year; full-year 2024 revenue reached CAD 45.5 million, up 60%.

• Q4 product sales: CAD 5.5 million; security services revenue: CAD 5.6 million; flow-through inventory revenue: CAD 1.2 million.

• Full year 2024 product sales: CAD 19.4 million; security services revenue: CAD 21 million; flow-through inventory revenue: CAD 5.1 million.

• Q4 gross margin rose to 60% (from 48%); full-year product sales gross margin was 53% (up from 41%).

• Q4 Adjusted EBITDA was CAD 1.8 million (vs. loss of CAD 677,000 in Q4 2023); full-year Adjusted EBITDA was CAD 2.8 million (vs. loss of CAD 7.9 million in 2023).

• Normalized net loss for Q4 was CAD 400,000 (vs. CAD 2.1 million loss in Q4 2023); full-year normalized net loss was CAD 6.3 million (vs. CAD 14 million in 2023).

• Positive operating cash flow of CAD 1.1 million in Q4 and CAD 3.3 million for the year, a CAD 14.5 million improvement year-over-year.

• Ended 2024 with CAD 1.4 million cash, CAD 2 million undrawn credit, and CAD 3.9 million working capital.

Outlook and guidance

• Expects continued revenue and margin growth in both benchtop NMR and security services segments through 2025.

• Anticipates further Adjusted EBITDA improvement and aims for positive after-tax net income.

• Projects downward pressure on product sales in H1 2025 due to macroeconomic and global tariff uncertainty, but maintains a robust sales funnel and mitigation measures.

• Focus remains on growing Benchtop NMR sales, expanding gross margins, and generating positive free cash flow.