Nanalysis Announces Second Quarter 2025 Results

Executive Summary

• Nanalysis Scientific Corp. reported its Second Quarter and First Half 2025 financial results, highlighting a significant decline in total revenue driven by a sharp drop in product sales due to global economic uncertainty and tariff risks.
• Despite lower top-line revenue, the company reported improved gross margins on product sales (61% in Q2 2025 vs. 50% in Q2 2024) and sequential margin improvements in its security services segment.
• The company also disclosed recent strategic financial activities, including the closing of a $2 million promissory note financing and an amendment to its existing loan terms to extend repayment schedules.

Key Details

• Q2 2025 Financial Highlights (Three Months Ended June 30, 2025):

  • Total Revenue: $9,576,000 (down 17% or $1,898,000 from $11,474,000 in Q2 2024).
  • Product Sales: $2,902,000 (down 46% or $2,500,000 from $5,402,000).
  • Security Services Revenue: $5,617,000 (up 7% or $352,000 from $5,265,000).
  • Flow-through Inventory Revenue: $1,057,000 (up 31% or $250,000 from $807,000).
  • Gross Margin (Product Sales): 61% (up from 50% in Q2 2024).
  • Gross Margin (Service Revenue): 10% (unchanged from Q2 2024).
  • Adjusted EBITDA: $(462,000) loss (vs. $759,000 profit in Q2 2024).
  • Net Loss: $(2,122,000) (vs. $(1,995,000) in Q2 2024).
  • Normalized Net Loss: $(2,122,000) (vs. $(1,795,000) in Q2 2024).

• H1 2025 Financial Highlights (Six Months Ended June 30, 2025):

  • Total Revenue: $20,170,000 (down 11% or $2,466,000 from $22,636,000 in H1 2024).
  • Product Sales: $6,589,000 (down 31% or $3,029,000 from $9,618,000).
  • Security Services Revenue: $10,640,000 (up 7% or $652,000 from $9,988,000).
  • Flow-through Inventory Revenue: $2,941,000 (down 3% or $89,000 from $3,030,000).
  • Gross Margin (Product Sales): 64% (up from 49% in H1 2024).
  • Gross Margin (Service Revenue): 8% (down from 9% in H1 2024).
  • Adjusted EBITDA: $(282,000) loss (vs. $655,000 profit in H1 2024).
  • Net Loss: $(3,429,000) (vs. $(4,517,000) in H1 2024).
  • Normalized Net Loss: $(3,429,000) (vs. $(4,317,000) in H1 2024).

• Quarterly Trend Analysis:

  • Q2 2025 vs Q1 2025: Product sales decreased by $785,000 (from $3,687,000 to $2,902,000). Security services revenue increased by $594,000 (from $5,023,000 to $5,617,000) due to increased labor hours and contractual service bonuses.
  • Adjusted EBITDA Trend: Q2 2025: $(462,000); Q1 2025: $180,000; Q4 2024: $1,904,000; Q3 2024: $545,000.

• Strategic and Operational Updates:

  • Margin Improvement: Process and logistics improvements in the Airport Security Maintenance Business led to sequential gross margin improvement in Q2 2025.
  • Promissory Note Financing: On June 12, 2025, the Company closed a fully subscribed private placement of unsecured promissory notes for gross proceeds of $2,000,000.
    • Terms: 12% annual interest, payable in cash or common shares.
    • Equity Component: Issued 1,600,000 common shares at $0.25 per share to lenders, representing 20% of the principal amount.
    • Use of Proceeds: General working capital and ongoing operations.
  • Loan Amendment: Signed an amending agreement with its lender to reduce the loan principal payment date from May 31, 2025, to April 30, 2026, and extend loan amortization to May 31, 2028.

Notable Quotes

• "The first half of 2025 has been challenging because of economic uncertainty caused by global tariff and trade conditions. The second quarter reflected lower product sales, which had a direct impact on our financial results," said Sean Krakiwsky, Founder and CEO of Nanalysis.
• "Even so, our cost reduction and efficiency measures have continued to support stronger margins in the scientific equipment business. In our security services segment, the team's focus on scheduling, logistics, and cost management has led to sequential margin improvement, and we expect these efforts will continue to benefit margins in the coming quarters."
• "Our plan remains unchanged, we are focused on building a vertically integrated scientific instrumentation company, advancing our Benchtop NMR platforms, and strengthening our service business. Operational execution and efficiency will remain at the core of how we deliver results as we progress on the path to long-term profitable growth."