CVD Equipment Corporation ((CVV)) has held its Q3 earnings call. Read on for the main highlights of the call.
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CVD Equipment Corporation’s recent earnings call revealed a mixed sentiment, highlighting both progress and challenges. The company showcased improvements in operational efficiency and growth in certain markets, yet faced hurdles such as a year-over-year revenue decline and a significant drop in orders. Despite external uncertainties impacting performance, the transformation strategy and new orders in growth markets signal potential for future profitability and growth.
Significant Revenue Increase from Previous Quarter
CVD Equipment Corporation reported a notable revenue increase for Q3 2025, reaching $7.4 million. This marks a 44.9% rise from Q2 2025, showcasing the company’s ability to rebound and generate higher sales compared to the previous quarter.
Improvement in Gross Profit and Margin
The company achieved a gross profit of $2.4 million with a gross margin of 32.7% in Q3 2025. This is a significant improvement from the $1.8 million gross profit and 21.5% margin reported in Q3 2024, indicating enhanced operational efficiency and cost management.
Operational Efficiency Enhancements
CVD has approved a comprehensive transformation strategy aimed at reducing fixed costs and improving scalability. This includes outsourcing fabrication, which is expected to cut annual operating costs by approximately $2 million starting in 2026, reflecting the company’s commitment to enhancing operational efficiency.
New Order in Silicon Carbide Market
In a promising development, CVD announced a new order from Stony Brook University for two PVT-150 systems. This order supports their center for Onsemi Silicon Carbide Crystal Growth, highlighting CVD’s strong position in the silicon carbide market.
Strong Position in Growth Markets
CVD Equipment Corporation remains well-positioned in target markets such as aerospace, defense, and electric vehicle battery materials. This strategic focus is expected to drive future growth and profitability.
Decrease in Year-Over-Year Revenue
Despite the quarterly improvement, Q3 2025 revenue decreased by 9.6% from the prior year quarter. This decline is primarily attributed to the absence of revenue from the MesoScribe segment.
Significant Decline in Orders
Total orders for the first nine months of 2025 were $9.5 million, a significant drop from $21 million in the same period last year. This decline underscores the challenges faced by the company in securing new business.
Decrease in Backlog
The company’s backlog decreased to $8 million as of September 30, 2025, down from $13.2 million at the end of June 2025. This reduction in backlog reflects the ongoing challenges in maintaining a steady pipeline of orders.
Impact of External Factors
External factors such as uncertainties related to tariffs, reduced US government funding, and government shutdowns have influenced bookings, adding to the challenges faced by CVD Equipment Corporation.
Cash Position Decline
CVD’s cash and cash equivalents decreased to $8.4 million at the end of Q3 2025, down from $12.6 million at the end of 2024. This decline in cash position highlights the financial pressures the company is navigating.
Forward-Looking Guidance
Looking ahead, CVD Equipment Corporation is focused on executing its transformation strategy to reduce fixed operating costs by approximately $2 million annually starting in 2026. The company remains committed to growth markets such as aerospace, defense, and silicon carbide high-power electronics. Despite the challenges, the improved gross profit and margin reflect a positive trajectory towards enhanced scalability and profitability.
In conclusion, CVD Equipment Corporation’s earnings call presented a mixed outlook with both progress and challenges. While the company has made strides in operational efficiency and growth markets, it faces significant hurdles such as declining orders and external uncertainties. The transformation strategy and focus on growth markets offer a pathway to future profitability and growth.