Executive Summary

Q4 revenue was $7.41M (+80.3% y/y) with second consecutive positive net income ($0.13M, $0.02 EPS); sequentially, revenue declined vs Q3 ($8.19M) while gross margin improved to 27.3% as mix normalized and despite a $0.3M non‑cash PVT150 inventory write‑down .
Aerospace/Defense continued to recover; orders were $7.1M in Q4 driven by aerospace and SDC gas delivery, including a $3.5M CVI follow‑on order announced in November; year‑end backlog was $19.4M (vs $18.4M in 2023), stable vs $19.8M at 9/30 .
Silicon carbide (SiC) remains a headwind: customer evaluation of first PVT200 continues, but market is challenged by wafer overcapacity and price declines; management recorded $1.3M total FY24 PVT150 write‑downs .
Management flagged 2025 risks from potential tariffs and supply chain costs; cash ended the year at $12.6M (vs $14.0M prior year), and liquidity is expected to cover needs for the next 12 months .
Street consensus (S&P Global) for Q4 was not available; results should be evaluated vs internal expectations and order/backlog trajectory rather than consensus beats/misses (S&P Global consensus unavailable).

What Went Well and What Went Wrong

What Went Well
- Sequential margin execution: gross margin reached 27.3% in Q4 (vs 22.4% in Q3) aided by contract mix; operating swung to +$0.04M from a $(2.47)M loss in Q4’23, with net income of $0.13M vs $(2.27)M y/y .
- Aerospace momentum: orders of $7.1M in Q4, including a $3.5M CVI system for gas turbine engine materials; backlog $19.4M at year‑end and management cites continued recovery in aerospace/defense .
- Strategic product progress: first PVT200 shipped and is meeting/exceeding internal performance specs at the evaluation customer, supporting the long‑term SiC roadmap despite market softness (“meeting or exceeding our performance specification”) .
What Went Wrong
- SiC end‑market weakness: global overcapacity and wafer price declines (from ~$1,000 to < $300 per wafer) pressured PVT150 demand, driving a $0.3M Q4 and $1.3M FY24 non‑cash inventory write‑down; near‑term demand visibility limited .
- Sequential top‑line downtick: revenue declined from $8.19M in Q3 to $7.41M in Q4 as orders/revenue remain inherently lumpy in emerging markets; EPS stepped down to $0.02 from $0.03 .
- Tariff/supply chain risk: management highlighted potential 2025 challenges from tariffs and higher component costs (though some mitigation through stocking and sourcing has helped to date) .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($USD Millions)	$4.11	$8.19	$7.41
Gross Profit ($USD Millions)	$(0.35)	$1.84	$2.03
Operating Income ($USD Millions)	$(2.47)	$0.08	$0.04
Net Income ($USD Millions)	$(2.27)	$0.20	$0.13
Diluted EPS ($)	$(0.33)	$0.03	$0.02
Gross Margin (%)	—	22.4%	27.3%
Orders ($USD Millions)	—	$4.1	$7.1
Backlog ($USD Millions)	$18.4 (12/31/23)	$19.8 (9/30/24)	$19.4 (12/31/24)
Cash & Equivalents ($USD Millions)	$14.03 (12/31/23)	$10.00 (9/30/24)	$12.60 (12/31/24)

Notes and items affecting comparability:

Inventory write‑downs (non‑cash): $1.0M in Q3’24 and $0.3M in Q4’24 to reduce PVT150 inventory to NRV due to SiC 150mm softness .
Gain on sale of equipment: ~$0.6M in Q3’24 (MesoScribe) and ~$0.7M for FY24, partly offsetting headwinds .
Q4’23 had a significant cost overrun on one contract, depressing gross profit/margins .

Segment and mix commentary (qualitative):

YoY Q4 growth driven by higher CVD Equipment system revenues and SDC gas delivery systems (+$2.8M and +$0.5M YoY contribution, respectively, vs Q4’23) .
Aerospace/industrial contracts in progress were key drivers in CVD Equipment; SDC demand remained solid .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Orders/Revenue cadence	2025 outlook	Qualitative: fluctuations expected given end‑markets	Reiterated qualitative: expect order/revenue fluctuations; pursuing long‑term profitability and cash flow	Maintained qualitative stance
Tariffs/supply chain	2025 outlook	—	Potential tariffs may affect supply chain and component/material costs	New/heightened risk disclosed
Liquidity	Next 12 months	—	Cash on hand and projected operating cash sufficient for next 12 months	Qualitative assurance

Note: The company did not provide quantitative revenue/EPS/margin guidance in the Q4 press release or call; commentary remained qualitative around order variability and cost risks .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024)	Previous Mentions (Q3 2024)	Current Period (Q4 2024)	Trend
SiC crystal growth (PVT150/200)	Shipped first PVT200; PVT150 soft; backlog elevated ($24M)	PVT200 shipped; $1.0M PVT150 NRV write‑down; wafer pricing declines; backlog $19.8M	PVT200 meeting/exceeding internal spec at eval customer; additional $0.3M PVT150 NRV; SiC overcapacity persists	Mixed: technical progress vs weak market
Aerospace/Defense CMC	Building relationships; aero contracts driving CVD Equipment	Recovery noted; $3.5M CVI follow‑on; CVD segment orders	Q4 orders $7.1M (aero and SDC); backlog $19.4M	Improving demand trajectory
Industrial SiC coatings	$10M multisystem order in Q1; cadence not specified	$10M order reiterated; deliveries extend multi‑quarters	3 tools staggered; deliveries extend into ~Q1’26	Visibility extends; multi‑quarter fulfillment
Margins/first‑article learning	Mix pressured; loss in H1; first‑article impact	GM 22.4% with NRV; small operating profit	GM 27.3%; margin uplift as first‑article learning applied; aim to sustain with volume absorption	Improving execution
Supply chain/tariffs	—	—	Tariffs possible; selective stocking; sourcing offsets; indirect supplier risk noted	New risk flagged
Spare parts (aero installed base)	—	—	Early signs of spare parts/consumables recovery at legacy aero customer	Gradual recovery

Management Commentary

CEO (press release): “The silicon carbide market has remained challenging due to overcapacity and the global decline in wafer prices… [PVT200] is continuing to be evaluated… We continue to support our installed base of PVT150 systems and pursue additional PVT150 and PVT200 orders.”
CEO (call): “Our tool is either meeting or exceeding our performance specification… [but] all U.S. manufacturers… are impacted by… price cutting and overcapacity… next quarter to two quarters will determine demand.”
CFO: “Gross profit for the fourth quarter was $2 million, representing a gross profit margin of 27.3%… Operating income… $35,000… net income… $132,000 or $0.02 per share.”
CEO on aerospace: “Orders for the fourth quarter were $7.1 million driven by… aerospace… and gas delivery equipment… [including] a $3.5 million system order in the aerospace sector” .
CEO on tariffs: “Possible imposition of tariffs may affect our supply chain and costs of components and materials… new challenges in fiscal 2025 and beyond.”

Q&A Highlights

$10M industrial SiC coating order cadence: three tools staggered over several quarters with deliveries extending into roughly Q1’26; capacity expansion at end customer drives timing .
SiC wafer market pricing and PVT outlook: wafer prices dropped from ~$1,000 to under $300; management cannot forecast near‑term PVT orders until pricing/demand stabilize over the next 1–2 quarters .
Aerospace OEM penetration: relationships/installed base at 3 of 4 target gas turbine OEMs; continued bidding for capacity and support of spare parts/consumables .
Margin trajectory: first‑article rework affected early 2024; subsequent systems benefiting from learnings; management aims to keep gross margins >30% with volume absorption and disciplined first‑article costs (objective, not formal guidance) .
Tariff response: selective safety‑stocking, AI‑assisted sourcing; some components remain cheaper even after ~45% tariff, but indirect supplier exposure remains a risk .

Estimates Context

Metric	Q4 2024 Actual	Q4 2024 S&P Global Consensus	Commentary
Revenue ($USD Millions)	$7.41	N/A	Consensus not available via S&P Global at time of review; coverage appears limited (S&P Global).
Diluted EPS ($)	$0.02	N/A	Consensus not available via S&P Global at time of review; coverage appears limited (S&P Global).

Values retrieved from S&P Global for consensus availability assessment. No numeric consensus values were available for comparison at the time of analysis.

Key Takeaways for Investors

Execution improvement: Second consecutive profitable quarter with margin uplift to 27.3% despite a further $0.3M NRV adjustment; operating discipline is translating to incremental profitability .
Aerospace remains the anchor: $7.1M Q4 orders and a $3.5M CVI follow‑on underpin backlog at $19.4M; spare parts/consumables demand showing early recovery, supporting utilization at installed base .
SiC crystal growth remains an overhang: PVT200 technical proof‑point is constructive, but overcapacity/price compression is delaying broader demand; watch for evaluation conversion to orders over the next 1–2 quarters .
Multi‑quarter revenue visibility: The $10M industrial SiC coating order (three tools) staggers into ~Q1’26, providing baseline shipment cadence if execution stays on track .
2025 risk monitor: Tariff and supply‑chain cost pressures could emerge; management is mitigating via stocking and sourcing but acknowledges indirect exposure via suppliers .
Balance sheet flexibility: $12.6M cash with management expecting liquidity to cover the next 12 months supports ongoing R&D and selective growth investments .
Trading setup: With no Street consensus, stock narrative likely pivots on order flow/backlog updates, margin sustainability >25%, any PVT200 follow‑on wins, and additional aerospace wins or spare‑parts recovery cadence .

Appendix: Additional Quantitative Detail (FY context)

FY2024 revenue $26.9M (+11.5% y/y); net loss $(1.9)M vs $(4.2)M in FY2023; FY gross margin 23.6%; gains on sale of equipment ~$0.7M; total PVT150 NRV $1.3M .

CVD EQUIPMENT CORP (CVV)·Q4 2024 Earnings Summary