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ASTROTECH Corp (ASTC)·Q2 2025 Earnings Summary
Executive Summary
- Q2 FY2025 reported revenue was $295K per the press release narrative, but the attached financial tables show $261K for the quarter; gross profit was $155K and net loss was $(4.009)M, with diluted EPS of $(2.45), reflecting higher operating expenses in R&D and SG&A and lower device sales year over year .
- Year-over-year, revenue declined sharply versus Q2 FY2024 ($1.115M), while net loss widened from $(2.641)M to $(4.009)M and EPS deteriorated from $(1.62) to $(2.45), driven by increased operating expenses and limited quarterly sales mix focused on DHS demonstration activities .
- Strategic developments this quarter included a DHS R&D contract with total potential value of $1.291M over 30 months and a $429K TSA-related purchase order for TRACER 1000, both supportive of future commercialization and validation, though the TSA order was recognized in Q3 FY2025 .
- Management emphasized a pivot to selling and marketing its portable mass spectrometry instruments and highlighted entry into narcotics detection and industrial process control markets (TRACER NTD and Pro-Control), signaling catalysts for future orders and revenue ramp .
- No formal numeric guidance was provided; cash and short-term investments totaled $24.7M at Q2, offering a meaningful runway to fund R&D and commercialization efforts .
What Went Well and What Went Wrong
What Went Well
- DHS awarded a two-phase R&D contract (70RSAT24CB0000015) with total potential value of $1,290,650 over 30 months to advance next-gen explosives trace detection, validating TRACER 1000 and supporting future capability maturation .
- TSA-related TRACER 1000 ETD purchase order of $429K (recognized in Q3) evidences commercial traction in U.S. cargo market; management underscored “near zero false alarm” and mass spectrometry-based trace detection positioning .
- Management conveyed a clear go-to-market pivot: “We are now prioritizing and accelerating our attention to selling and marketing our line of portable, rugged and inexpensive mass spectrometry instruments,” highlighting proven ETD deployments across airports in 14 countries .
What Went Wrong
- Year-over-year revenue contracted markedly (Q2 FY2025 $261K vs. Q2 FY2024 $1.115M), reflecting fewer device sales and heavier weighting to DHS demonstration activities rather than shipments .
- Losses widened (net loss $(4.009)M; EPS $(2.45) vs. $(1.62) in Q2 FY2024), with higher R&D ($2.437M) and SG&A ($2.039M) spend contributing to negative operating leverage amid low quarterly revenue scale .
- No explicit guidance ranges were issued for revenue, margins, or OpEx, limiting visibility for investors on near-term trajectory despite positive contract/PO news flow .
Financial Results
Quarterly Trend (Q1 FY2025 → Q2 FY2025 → Q3 FY2025)
Note: The Q2 press release header states “Q2 revenue of $295K,” while the financial table shows $261K for the quarter and $295K for six months H1 FY2025 (Q1+Q2). Discrepancy noted for transparency .
Year-over-Year Comparison (Q2 FY2024 → Q2 FY2025)
Balance Sheet KPIs
Management highlighted $24.7M of cash and liquid investments at Q2 consistent with the table values above .
Guidance Changes
No numeric guidance ranges were disclosed in Q2 materials .
Earnings Call Themes & Trends
Management Commentary
- “We are now prioritizing and accelerating our attention to selling and marketing our line of portable, rugged and inexpensive mass spectrometry instruments. We believe 1st Detect’s explosive trace detection products are now proven with four years of use in cargo warehouses having run thousands of samples at airports in 14 countries.” — Thomas B. Pickens, III .
- “Using this same proven and rugged mass spectrometry technology, we have recently introduced 1st Detect’s narcotics trace detector...TRACER NTD is able to differentiate between fentanyl, heroin, THC and methamphetamine with a high degree of accuracy...With our newest product lines, the TRACER NTD and Pro-Control, we believe we are entering large markets in need of our technology.” — Thomas B. Pickens, III .
- Q3 forward narrative (context): “We are currently focused on selling and marketing all our brands...With our newest product lines, the TRACER NTD, Pro-Control, and EN-SCAN we believe we have created great momentum in fiscal year 2025 and into fiscal year 2026.” — Thomas B. Pickens, III .
Q&A Highlights
- No earnings call transcript was cited in the company document set for Q2 FY2025; management commentary is sourced from the press release and 8-K .
Estimates Context
- Consensus revenue and EPS estimates via S&P Global were unavailable for ASTC for Q2 FY2025 at the time of this analysis; therefore, we cannot categorize beats/misses versus Street. If/when available, models should benchmark actual Q2 results vs. consensus to assess surprise and implication for forward quarters .
- Table: Actuals vs. Street (Q2 FY2025)
Key Takeaways for Investors
- The quarter reflects a transitional commercialization phase: limited quarterly revenue ($261K) and widened losses, offset by meaningful external validation (DHS R&D award; TSA-related PO) that could catalyze future orders and certification successes .
- Operational mix in Q2 skewed toward DHS demonstrations, leading to low device revenue; continued R&D and SG&A investment are necessary to mature products and scale sales channels, but weigh on near-term profitability .
- Liquidity remains solid ($24.7M cash and investments), supporting R&D roadmaps and market entry across ETD, NTD, Pro-Control, and EN-SCAN; runway provides flexibility to pursue strategic opportunities and potential acquisitions .
- Near-term catalysts: TSA cargo market deployment, additional government contracts, and industrial adoption of Pro-Control; medium-term thesis hinges on converting validations into recurring device sales, consumables, and services .
- Monitor quarter-to-quarter revenue scaling and OpEx discipline; if certification milestones and orders accelerate, operating leverage could improve materially from current depressed revenue base .
- Note the Q2 revenue reporting discrepancy ($295K narrative vs. $261K in tables); anchor to filed financial tables and seek clarification in subsequent 10-Q/press communications .
Additional Data Appendix (tables from Q2 press release and 8-K)
- Condensed Consolidated Statements of Operations, Q2 FY2025: Revenue $261K, Cost of revenue $106K, Gross profit $155K, SG&A $2.039M, R&D $2.437M, Net loss $(4.009)M, EPS $(2.45) .
- Condensed Consolidated Balance Sheets at Dec 31, 2024: Cash $3,161K, Short-term investments $21,531K, Total assets $31,001K, Total stockholders’ equity $28,094K .