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HARVARD BIOSCIENCE INC (HBIO)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 revenue was $20.6M with gross margin of 58.4%, delivering at the high end of prior guidance and sequential improvement in margin and adjusted EBITDA; GAAP diluted EPS was $(0.03) .
  • Backlog reached its highest level in nearly two years, supported by four consecutive months of YOY order growth; management guided Q4 revenue to $22.5–$24.5M and gross margin to 58–60% .
  • Operational initiatives (ERP consolidation, SG&A levers, NPI reprioritization) reduced opex YOY and drove adjusted EBITDA up to $2.0M; cash from operations was $1.1M in Q3 and $6.8M YTD .
  • Capital structure: HBIO expects to refinance or repay its debt in Q4 following an amendment in Q2 that extended the deadline to December 5, 2025, a potential stock-reaction catalyst if resolved on favorable terms .

What Went Well and What Went Wrong

What Went Well

  • Sequential margin expansion to 58.4% (vs. 56.4% in Q2) driven by mix shift (telemetry) and better fixed cost absorption; adjusted operating income rose to $1.5M and adjusted EBITDA to $2.0M .
  • Demand momentum: four consecutive months of order growth, backlog at the highest level in nearly two years, and initial orders shipped for the new Incubate MultiWell platform; expanded Fisher Scientific distribution in North America .
  • Cost discipline: operating expenses declined $1.4M YOY on ERP consolidation, leaner SG&A, and NPI reprioritization, supporting margin and EBITDA improvement despite lower YOY revenue .

Management quotes:

  • “Gross margin of 58.4% improved sequentially and exceeded our guidance range… Adjusted EBITDA was also up sequentially to $2 million” — John Duke, CEO .
  • “Operating expenses declined $1.4 million from prior year… leading to adjusted operating income of $1.5 million versus $0.8 million in Q3 2024” — Mark Frost, Interim CFO .

What Went Wrong

  • YOY revenue decline (Q3: $20.6M vs. $22.0M), with weakness in China (revenue down 19.6% YOY and 6.3% sequential); Cellular & Molecular sales also declined YOY .
  • Continued GAAP net loss (Q3: $(1.2)M) and negative GAAP EPS $(0.03), reflecting interest expense and other items despite opex reductions .
  • NIH funding/timing risk into Q4 due to the U.S. government shutdown, embedded in the low end of Q4 guidance; customers’ funding visibility remains mixed .

Financial Results

Quarterly Actuals (oldest → newest)

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Millions)$21.77 $20.45 $20.59
Gross Margin %56.0% 56.4% 58.4%
GAAP Diluted EPS ($USD)$(1.14) $(0.05) $(0.03)
Adjusted EBITDA ($USD Millions)$0.81 $1.50 $1.99

Q3 2025 vs Wall Street Consensus (S&P Global)

MetricActual Q3 2025Consensus Q3 2025
Revenue ($USD Millions)$20.59 $20.00*
GAAP EPS ($USD)$(0.03) $0.01*
EBITDA ($USD Millions)$1.99 $1.50*

Values retrieved from S&P Global.*

Year-over-Year Comparison (Q3 2024 → Q3 2025)

MetricQ3 2024Q3 2025
Revenue ($USD Millions)$21.97 $20.59
Gross Margin %58.1% 58.4%
GAAP Diluted EPS ($USD)$(0.11) $(0.03)
Adjusted EBITDA ($USD Millions)$1.31 $1.99

Regional Revenue Change (%)

RegionSequential ChangeYoY Change
Americas+3.6% −4.4%
Europe+0.3% ~Flat
China−6.3% −19.6%

KPIs

KPIQ3 2025
Cash from Operations ($USD Millions)$1.10
Adjusted Operating Margin %7.4%
Net Debt ($USD Millions, 9/30/25)$27.53

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueQ4 2025N/A$22.5M–$24.5M New
Gross Margin %Q4 2025N/A58%–60% New
RevenueQ3 2025$19M–$21M Actual $20.59M Achieved at high end
Gross Margin %Q3 202556%–58% Actual 58.4% Above midpoint

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current Period (Q3 2025)Trend
Product adoption (Telemetry, MeshMEA, Incubate)Q1: MeshMEA and SoHo telemetry adoption emerging ; Q2: continued operational discipline Telemetry demand broadened; Incubate MultiWell launched; initial orders shipped; MeshMEA momentum continues Improving
Supply chain/tariffs/macroQ1: NIH/tariff uncertainty, esp. China China orders flat sequentially; optimism tariffs may ease; U.S. gov’t shutdown timing risk for NIH Mixed (Tariffs improving; NIH timing risk)
Regional trendsQ1: China headwinds noted Americas +3.6% seq; Europe +0.3% seq; China −6.3% seq, −19.6% YOY Americas/Europe stabilizing; China pressured
Capital structure/refinancingQ2: Amendment extended refinance deadline to Dec 5 Expect refinance/repay in Q4; multiple proposals under negotiation Progressing toward resolution
Cost structure/ERPQ1: ~$1M/qtr opex reductions expected starting Q2 Benefits rolling through (manufacturing, G&A); opex −$1.4M YOY Improving
DistributionN/AExpanded Fisher Scientific distribution across North America Expanding reach
Regulatory initiativesN/ARegulatory momentum for new approach methodologies supporting MeshMEA adoption Supportive tailwind

Management Commentary

  • “We delivered revenue of $20.6 million, at the high end of our guidance range… Gross margin of 58.4% improved sequentially… Adjusted EBITDA was also up sequentially to $2 million… our backlog has reached its highest level in nearly two years.” — John Duke, CEO .
  • “Operating expenses declined $1.4 million from prior year… adjusted operating income of $1.5 million versus $0.8 million in Q3 2024… guiding to $22.5–$24.5M revenue and 58–60% gross margin for Q4.” — Mark Frost, Interim CFO .
  • “We remain in active discussions… expect to have resolution within the fourth quarter [on the credit facility].” — Mark Frost .

Q&A Highlights

  • Demand mix and backlog: Telemetry demand rose broadly across geographies and customer groups; backlog growth was uniform across products rather than driven by a single SKU .
  • Academic/Gov markets: Early signs of improvement; guidance embeds risk from NIH timing due to government shutdown .
  • NIH timing: Lower end of Q4 range assumes shutdown persists; funds are timing-related (not lost) and could shift into Q1/Q2 2026 .
  • ERP project: U.S. and Europe ERP consolidation completed; benefits flowing through 2025 in manufacturing and G&A .

Estimates Context

  • Revenue beat consensus: $20.59M actual vs $20.00M estimate*; EBITDA beat: $1.99M actual vs $1.50M estimate*; EPS missed: $(0.03) actual vs $0.01 estimate* .
  • Q4 2025 consensus implies continued sequential improvement (revenue estimate $23.1M*, EPS $0.04*, EBITDA $3.8M*), generally consistent with management guidance [GetEstimates].
  • With mixed China trends and NIH timing risk, models may raise gross margin and EBITDA assumptions given Q3 execution, while trimming China growth near-term; EPS likely revised down for Q3, up modestly for Q4 if refinancing removes overhang .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Sequential improvement across margin and EBITDA with disciplined opex control; Q3 delivered at the high end of guidance, strengthening confidence into Q4 .
  • Demand momentum and expanded distribution (Fisher Scientific) support near-term revenue visibility; backlog at two-year high is a positive signal .
  • China remains a headwind (−19.6% YOY), but tariff outlook appears to be improving; Americas and Europe are stabilizing .
  • Guidance for Q4 ($22.5–$24.5M revenue; 58–60% GM) embeds NIH shutdown risk at the low end; monitor Washington developments for funding timing .
  • Balance sheet catalyst: anticipated Q4 refinancing/repayment could remove the debt overhang and re-rate equity if terms are favorable .
  • Non-GAAP execution: adjusted EBITDA and margin trending up; continued cash generation ($1.1M in Q3; $6.8M YTD) provides flexibility .
  • Trading setup: Near-term upside tied to a clean refinance and Q4 delivery above midpoint; watch telemetry adoption, NIH timing, and China order trends as key swing factors .