TOMI Environmental Solutions (TOMZ) Q3 2024 earnings summary

Executive summary

• Achieved second consecutive profitable quarter in Q3 2024, with positive cash flow, improved gross margins, and disciplined expense management driven by higher revenue and cost reductions.

• Q3 2024 revenue grew 73% year-over-year to $2.54 million, with year-to-date revenue up 14.5% to $6.7 million.

• International, mobile equipment, and iHP Corporate Service sales were key growth drivers, with international revenue up 82% for the first nine months and new customers in Canada, South Africa, and India.

• Broadened customer base with new strategic agreements and partnerships, including major clients in life sciences, food safety, and a $1M+ investment from EMAQ.

• Continued innovation and product launches, focusing on consumer healthcare, international markets, and new products like SteraMist Hybrid and fourth-generation Environment System.

Financial highlights

• Q3 2024 net revenue was $2.54 million, up 73% year-over-year; nine-month revenue was $6.67 million, up from $5.83 million.

• Gross profit margin improved to 61.4% in Q3 2024 from 55% in Q3 2023; nine-month gross margin was 61.3%.

• Q3 operating profit was $149,000, compared to a loss of $901,000 in Q3 2023; net profit reached $59,000.

• Adjusted EBITDA for Q3 was $219,000, up from $(807,000) in Q3 2023.

• Cash and cash equivalents stood at $809,000 as of September 30, 2024; working capital was $6.9 million, and shareholders' equity was $7.4 million.

Outlook and guidance

• Targeting over $10 million in revenue for the full year 2024, with management expecting continued sales growth, improved operating margins, and sufficient liquidity for the next twelve months.

• Anticipates continued growth in recurring iHP service revenue, solution sales, and further international expansion as installed base grows.

• Ongoing expansion into new markets and product lines, with a focus on recurring revenue from CES systems and BIT solution sales.

• Expects further international growth, new product launches, and additional CES and Hybrid contracts before year-end.

• Food safety market seen as a significant long-term growth opportunity.