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9D

908 Devices Inc. (MASS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue from continuing operations was $11.8M (+59% YoY), driven by 86% growth in handheld product and service revenue; GAAP gross margin was 47% and adjusted gross margin 54% .
  • EPS vs consensus: Primary EPS (SPGI) beat (actual -$0.19 vs -$0.27 est), while revenue was a slight miss (actual $11.78M vs $11.93M est); adjusted EBITDA loss improved YoY to -$4.6M *.
  • Full-year 2025 guidance reiterated: revenue (continuing ops) $53–$55M (11%–15% growth), adjusted gross margin mid-to-high 50s, adjusted EBITDA positive by Q4; no material 2025 AVCAD revenue assumed .
  • Catalysts highlighted: Texas DPS $2M MX908 order shipping in Q2, rescEU deployments in EU stockpiles, and potential AVCAD full-rate decision by government FY-end (≥$10M annual at scale) .

What Went Well and What Went Wrong

What Went Well

  • Handheld product/service revenue surged to $11.0M (+86% YoY), with recurring revenue of $4.4M (37% of total) and 157 devices placed; installed base reached 3,172 (+28% YoY) .
  • International momentum and enterprise wins: rescEU shipments (108 devices to EU members), Romania deployed 27 MX908 units; U.S. federal (HSI) expanded to 65+ units; Texas DPS placed $2M order .
  • Cost and margin trajectory: adjusted gross margin 54% (+~75 bps YoY) and adjusted EBITDA loss improved to -$4.6M; management reiterated reaching adjusted EBITDA positivity by Q4 2025 .

What Went Wrong

  • GAAP gross margin contracted to 47% (from 52% prior-year) due to intangible amortization and channel/geography mix; program revenue fell to $0.1M as AVCAD LRIP lapped .
  • Operating expenses rose to $16.6M (from $11.5M), including a $2.5M non-cash contingent consideration fair value change and RedWave-related expense .
  • Net loss from continuing operations widened to -$9.8M (from -$5.9M) and GAAP EBITDA remained negative; management flagged second-half seasonality and continued caution on government timing .

Financial Results

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$16.8 $18.8 $11.8
GAAP Gross Margin (%)50% 48% 47%
Adjusted Gross Margin (%)55% 54% 54%
Adjusted EBITDA ($USD Millions)$(6.9) $(6.25) $(4.57)
GAAP Net Income (Loss) ($USD Millions)$(29.3) $(19.4) $43.6 (includes gain on divestiture; continuing ops loss -$9.8)
Cash, Cash Equivalents & Marketable Securities ($USD Millions)—$69.6 (12/31/24) $124.3 (3/31/25)

Notes: Q1 2025 reflects continuing operations; GAAP net income includes gain from desktop divestiture .

Segment breakdown (Q1 2025):

CategoryQ1 2024Q1 2025
Handheld Product & Service Revenue ($USD Millions)$5.9 $11.0
Program Revenue ($USD Millions)$1.5 (AVCAD LRIP) $0.1
OEM & Funded Partnerships ($USD Millions)$0.0 $0.7
Total Revenue ($USD Millions)$7.4 $11.8
Recurring Revenue ($USD Millions; % of Total)$2.9; 39% (derived from +$1.5M YoY) $4.4; 37%

KPIs:

KPIQ4 2024Q1 2025
Devices Placed (Quarter)219 handheld, 32 desktop 157 devices
Installed Base (Cumulative)3,504 devices (handheld+desktop) 3,172 devices (continuing ops)
Mix: Mass Spec vs FTIR (Revenue)—~60% MS / ~40% FTIR

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue (Continuing Ops) ($USD Millions)FY 2025$53–$55 $53–$55 Maintained
Handheld Product & Service Revenue ($USD Millions)FY 2025$51–$53 $51–$53 Maintained
OEM & Funded Partnerships ($USD Millions)FY 2025~$2 ~$2 Maintained
AVCAD Program Revenue AssumptionFY 2025Not meaningful Not meaningful Maintained
Adjusted Gross Margin (%)FY 2025Mid-to-high 50s Mid-to-high 50s Maintained
Adjusted EBITDAQ4 2025Positive Positive Maintained
Cash FlowFY 2026Positive Positive Maintained

Earnings Call Themes & Trends

TopicQ3 2024 (Prior-2)Q4 2024 (Prior-1)Q1 2025 (Current)Trend
Handheld momentum178 devices; core handheld +20% ex-AVCAD; international deals (Vietnam) Handheld revenue $13.6M; FTIR contributing; strong devices placed Handheld $11.0M; mass spec ~60% / FTIR ~40%; 157 devices Strengthening mix and scale
International preparedness (EU rescEU)Expect large 20+ unit opportunities; delays from budget timing 90 ProtectIR to Finland partially shipped 108 devices shipped to EU via rescEU; Czech/Finland placements Building pipeline and deliveries
U.S. law enforcement tailwindsBudget timing headwinds H2 seasonality noted ONDCP priorities; Texas DPS $2M MX908 order Policy tailwinds emerging
AVCAD programLRIP history; full-rate decision anticipated FY 2025 —Full-rate decision expected by U.S. gov FY-end; ≥$10M/yr at scale Decision approaching
Manufacturing consolidationPlanned move from Boston to CT/NC for savings —Danbury transition underway; ~$2M annual facility savings, 40% through GM line Savings tracking to plan
Tariffs/supply chain——Minimal expected 2025 impact; U.S.-sourced components; pricing levers if needed Managed risk

Management Commentary

  • “We are off to a strong start in 2025… transformation to 908 Devices 2.0 already delivering both top-line growth and meaningful cost reductions” — Kevin Knopp, CEO .
  • “Adjusted EBITDA loss improved nearly 50% YoY… mass spec ~60% of revenue, FTIR ~40%” — Kevin Knopp .
  • “We expect adjusted gross margins to increase to the mid- to high-50% range for full year 2025… adjusted EBITDA positive by Q4” — Joe Griffith, CFO .
  • “Notice to proceed to full rate production [AVCAD]… potential to generate over $10M in annual revenue at full production” — Kevin Knopp .
  • “Facility savings will approach $2M a year… ~40% through gross margin” — Joe Griffith .

Q&A Highlights

  • RedWave integration and cross-selling: management cited portfolio expansion to four handhelds, enterprise follow-on orders (WMATA, rescEU) and ~40-person commercial org to drive growth .
  • Danbury manufacturing move: midyear completion target, ~$2M annual savings, with marginal underutilization expected and capacity to scale production .
  • AVCAD timing and ramp: decision targeted by end of U.S. gov FY; ramp could reach ~$10M/year in 2026–2027 depending on award profile .
  • Mix, margins and next-gen MX908: next gen expected to lower COGS and improve GM; large installed base under service contracts supports upgrade cycle .
  • H1 vs H2 cadence and orders: Texas DPS is a Q2 opportunity; reiterated second-half weighting; monitoring tariff backdrop and funding dynamics .
  • M&A posture: opportunistic but focused on organic execution; RedWave acquisition tracking earn-out plan through April 2026 .

Estimates Context

MetricQ3 2024 ConsensusQ3 2024 ActualResultQ4 2024 ConsensusQ4 2024 ActualResultQ1 2025 ConsensusQ1 2025 ActualResult
Revenue ($USD)$18.33M$16.52MMiss$17.05M$18.82MBeat$11.93M$11.78MSlight Miss
Primary EPS ($USD)-$0.29-$0.31Miss-$0.35-$0.28Beat-$0.27-$0.19Beat
EBITDA ($USD)-$8.54M-$4.70MBeat-$11.16M-$9.05MBeat-$6.90M-$7.24MMiss

Values from S&P Global; actuals per SPGI normalization may differ from GAAP continuing ops disclosures*.
Sources: Estimates data via SPGI GetEstimates*; Q4/Q1 actuals also supported by company releases .

Where estimates may adjust:

  • Revenue: stronger international/state & local pipeline and Q2 DPS order support second-half weighting; consensus may modestly shift timing into Q3–Q4 .
  • Margins: adjusted GM trending toward mid-to-high 50s and manufacturing consolidation savings suggest upward bias to margin forecasts .
  • EBITDA: trajectory improving; reiterated Q4 adjusted EBITDA positivity implies back-half EBITDA revisions .

Key Takeaways for Investors

  • Execution on handheld focus: large YoY growth in handheld revenue and recurring mix highlights traction in core strategy post-divestiture .
  • 2025 outlook intact: revenue, margin, and EBITDA milestones reiterated; second-half cadence remains the key to the year .
  • Policy and program catalysts: ONDCP priorities, DHS grants, rescEU stockpiles, and AVCAD full-rate decision offer multi-quarter drivers; monitor government timing .
  • Margin expansion levers: Danbury consolidation (~$2M annual facility savings) and next-gen MX908 design suggest incremental GM improvement potential .
  • Order visibility building: enterprise accounts (e.g., HSI, DPS, EU agencies) and OEM/funded partnerships diversify revenue streams and support recurring revenue .
  • Risk monitor: channel/geography mix pressure on GAAP GM, operating expense non-cash items, and government budget timing remain near-term variables .
  • Trading frame: EPS beat vs slight revenue miss, guidance reiteration, and visible catalysts (DPS shipment, AVCAD decision window) set up event-driven opportunities over Q2–Q4 .

*Values retrieved from S&P Global.