Executive Summary

Q2 FY2025 revenue was $7.33M, up 18% sequentially from $6.21M on improved order flow and product mix, but down 14% year over year due to timing of large orders and a US market slowdown .
Gross margin expanded to 52% from 41% in Q1 and 49% in Q2 last year on cost efficiency actions and mix, lifting consolidated operating loss to $(1.60)M from $(3.62)M in Q1 .
The Products segment turned profitable with $0.51M operating income (vs. $(1.46)M in Q1), while Corporate & Other remained a headwind; adjusted EPS improved to $(0.02) and adjusted EBITDA to $(0.88)M .
Liquidity remains solid: cash was $40.3M, working capital $35.0M, equity $46.6M; management is conserving cash and pursuing strategic alternatives while addressing NYSE noncompliance via a submitted plan .
Legal overhang progressing toward resolution: preliminary approval of a $7.5M class settlement with a June 10, 2025 fairness hearing; $0.8M initial payment made subsequent to quarter end .

What Went Well and What Went Wrong

What Went Well

Products segment achieved $0.5M operating profit, a $2.0M sequential improvement, driven by revenue changes, cost efficiencies, and favorable mix .
Gross margin reached 52%, materially above Q1’s 41% and prior-year 49%, reflecting cost containment and mix improvements .
Management is actively pursuing strategic alternatives: “We continue to explore all strategic alternatives to maximize value for the Company’s stockholders... including a potential sale of the Company” .

What Went Wrong

Year-over-year revenue declined 14% on timing of large orders and US market slowdown; continued industry demand headwinds cited across geographies .
FX turned adverse (loss of $0.234M vs. $0.693M gain last year), and interest income fell 48% on lower cash balances and rates, pressuring other income .
NYSE notices of noncompliance for market cap/equity and stock price created a listing risk requiring a formal cure plan (submitted Feb 21, 2025) .

Financial Results

Metric	Q2 2024	Q1 2025	Q2 2025
Revenue ($USD Millions)	$8.553	$6.213	$7.334
Gross Margin %	49%	41%	52%
Operating Income (Loss) ($USD Millions)	$(2.185)	$(3.622)	$(1.602)
Net Loss ($USD Millions)	$(3.061)	$(3.376)	$(1.535)
Diluted EPS (Total) ($USD)	$(0.06)	$(0.07)	$(0.03)
Diluted EPS (Continuing Ops) ($USD)	$(0.02)	$(0.07)	$(0.02)

Q2 FY2025 Non-GAAP (company-reported):

Metric	Q2 2025
Adjusted Net Loss ($USD Millions)	$(0.974)
Adjusted EPS ($USD)	$(0.02)
EBITDA ($USD Millions)	$(1.676)
Adjusted EBITDA ($USD Millions)	$(0.881)

Segment breakdown:

Metric	Q2 2024	Q1 2025	Q2 2025
Products Revenue ($USD Millions)	$8.553	$6.213	$7.334
Products Operating Income ($USD Millions)	$0.340	$(1.455)	$0.506
Corporate & Other Operating Income ($USD Millions)	$(2.525)	$(2.167)	$(2.108)
Consolidated Operating Loss ($USD Millions)	$(2.185)	$(3.622)	$(1.602)

KPIs (Geography mix):

KPI	Q2 2024	Q1 2025	Q2 2025
US Revenue ($USD Millions)	$5.166	$3.764	$4.830
Europe Revenue ($USD Millions)	$2.286	$1.664	$1.712
Asia Pacific Revenue ($USD Millions)	$1.101	$0.785	$0.792

Balance sheet snapshot:

Metric	7/31/2024	1/31/2025
Cash And Equivalents ($USD Millions)	$52.371	$40.297
Working Capital ($USD Millions)	$45.237	$35.041
Stockholders’ Equity ($USD Millions)	$56.112	$46.616
Total Assets ($USD Millions)	$85.764	$67.510

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Formal financial guidance (Revenue, margins, OpEx)	FY2025 / near-term	None issued in prior materials	None issued in Q2 press release or 10-Q	Maintained (no guidance)

Management reiterated cost containment and product launch momentum but did not provide quantitative guidance ranges in Q2 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 and Q-1)	Current Period (Q2 2025)	Trend
Strategic alternatives	Q4 FY2024: dividend announced; operational stabilization narrative . Q1 FY2025: continued narrative in MD&A .	Ongoing review including potential sale; active consideration of acquisitions/JVs/dispositions .	Continuing; scope broadened.
NYSE listing compliance	Not highlighted in Q4 FY2024.	Received NYSE notices (market cap/equity and <$1 price); plan submitted Feb 21, 2025 .	New risk; remediation in process.
Legal/regulatory (data breach)	AG settlements ($4.5M) paid Sep 2024 ; class actions pending .	Preliminary approval for $7.5M class settlement; fairness hearing set June 10, 2025; $0.8M initial payment .	Progressing toward closure.
Product portfolio actions	FY2024: removed >20% non-performing SKUs; new launches . Q1 FY2025: inventory provision tied to optimization .	Doubling new product launches vs prior full year within H1 .	Accelerating launches; optimization ongoing.
Regional demand/macro	Q4 FY2024: Q4 revenue -16% YoY on ordering shifts . Q1 FY2025: broad demand headwinds in life sciences tools .	YoY decline due to timing and US slowdown; sequential improvement .	Mixed: sequentially better, YoY headwinds persist.
FX and interest income	Q1 FY2025: FX loss; interest income lower on cash/rates .	FX loss vs prior-year gain; interest income -48% YoY .	Adverse vs prior year; manageable sequentially.

Management Commentary

“We continue to explore all strategic alternatives to maximize value for the Company’s stockholders... including a potential sale of the Company” .
“In a challenging life sciences market with increasing price pressures and regulatory changes, we are pleased that we reported single-digit revenue growth for the year with significant gross margin improvement” — Kara Cannon, CEO (FY2024 context) .
Company emphasized bolstering base business via increased SKU launches and cost containment as drivers behind margin improvement .

Q&A Highlights

Not applicable — no earnings call transcript was available in company filings for Q2 FY2025.

Estimates Context

Wall Street consensus (S&P Global) for ENZ Q2 FY2025 was unavailable via our S&P Global feed due to missing mapping; therefore, we cannot compare reported results to consensus or assess beats/misses. If/when coverage becomes available, focus estimate updates on revenue trajectory, gross margin durability, and segment profitability.

Key Takeaways for Investors

Sequential turnaround: Revenue +18% and gross margin to 52% drove a materially smaller operating loss; Products segment profitability indicates operating leverage when mix and execution improve .
YoY softness remains: -14% revenue YoY from timing and US slowdown; watch order patterns and US demand normalization to sustain sequential gains .
Costs disciplined: SG&A and R&D down 22% and 27% for H1 FY2025; margin gains reflect actions likely to persist near term .
Liquidity adequate for execution: $40.3M cash and $35.0M working capital provide runway; interest income headwinds should moderate as rate/cash balances evolve .
Legal overhang diminishing: Preliminary approval of $7.5M settlement with fairness hearing in June; remaining regulatory exposure (OCR) noted but not yet estimable .
Listing risk mitigants: NYSE noncompliance notices raise headline risk; a cure plan has been submitted—monitor acceptance and any corporate actions (reverse split, strategic transactions) .
Strategic optionality: Ongoing review (including potential sale) is a potential stock catalyst; execution on SKU launches and mix can compound margin recovery .

Appendix: Why the quarter moved

Margin expansion was attributed to cost efficiency actions and favorable product mix; sequential revenue improvement contributed to positive Products segment operating income .
YoY revenue decline tied to timing of large orders and US market slowdown; management cited broader life sciences tools headwinds across regions .
Other income pressure reflected lower interest rates and balances, and unfavorable FX vs prior-year gains tied to currency movements impacting intercompany revaluations .

ENZO BIOCHEM INC (ENZ)·Q2 2025 Earnings Summary