Executive Summary

Q2 2025 revenue grew 20% YoY to $0.391M, but declined 29.7% QoQ from Q1’s $0.556M as the company scales a new distribution-led model and advances dairy membrane pilots; net loss narrowed YoY to $(0.798)M with EPS of $(0.01) unchanged YoY and QoQ .
Gross margin remained solid at ~58% (Q2: 58.1%) as SG&A reductions drove operating loss improvement YoY; interest expense rose with increased related-party convertible notes .
Management highlighted key operational progress: scale-up testing and in-plant pilots for a non-oxidizing dairy membrane solution and a multi-year distribution agreement with Hydrite, a major food/dairy chemicals distributor—important commercialization catalysts .
No formal quantitative guidance or sell-side consensus available; near-term stock catalysts center on: (1) converting pilots to orders, (2) distributor ramp quality/pace, and (3) liquidity trajectory given low cash and rising related-party debt .

What Went Well and What Went Wrong

What Went Well
- YoY revenue growth with cost discipline: Net product sales increased to $0.391M (+$0.066M YoY) with SG&A down $0.194M YoY; net loss improved to $(0.798)M from $(1.002)M .
- Strong gross margin: Gross profit of $0.227M on $0.391M revenue implies ~58.1% gross margin, broadly consistent with Q1’s ~58.5% .
- Strategic progress in dairy membranes and distribution: “Advancing our dairy membrane solutions from… laboratory… to… in-plant pilots,” working closely with “a large distribution partner” (and separately, a multi-year Hydrite agreement) .
What Went Wrong
- Sequential revenue decline: Q2 revenue of $0.391M fell from Q1’s $0.556M as the company transitions go-to-market and replaces lost end-user revenue from FY24/Q1 .
- Rising financing needs: Convertible notes to related parties rose to $3.975M (from $2.949M at FY24), with cash at $0.202M; interest expense climbed YoY .
- Limited external validation: No formal guidance or sell-side consensus; scaling depends on distributor execution and pilot-to-order conversion, which adds forecasting uncertainty .

Financial Results

Quarterly P&L snapshot (oldest → newest)

Metric	Q2 2024	Q1 2025	Q2 2025
Total Revenue ($M)	0.326	0.556	0.391
Net Product Sales ($M)	0.325	0.555	0.391
Gross Profit ($M)	0.177	0.325	0.227
Gross Margin (%)	54.3%	58.5%	58.1%
SG&A ($M)	1.065	0.881	0.871
R&D ($M)	0.076	0.071	0.081
Total OpEx ($M)	1.141	0.952	0.952
Operating Loss ($M)	(0.964)	(0.627)	(0.725)
Interest Expense, net ($M)	(0.038)	(0.062)	(0.070)
Net Loss ($M)	(1.002)	(0.689)	(0.798)
Diluted EPS ($)	(0.01)	(0.01)	(0.01)
Shares (M)	111.856	111.856	111.856

YoY and QoQ

Metric	Q2 2024 → Q2 2025 YoY	Q1 2025 → Q2 2025 QoQ
Revenue Growth	+20.0% (0.326→0.391)	-29.7% (0.556→0.391)
Net Loss Change ($M)	+0.204 improvement (1.002→0.798)	(0.109) worsening (0.689→0.798)
Gross Margin (pp)	+3.8pp (54.3%→58.1%)	-0.4pp (58.5%→58.1%)

Balance sheet and liquidity (end of period)

Metric	FY 2024 (Jul 31, 2024)	Q1 2025 (Oct 31, 2024)	Q2 2025 (Jan 31, 2025)
Cash & Equivalents ($M)	0.349	0.346	0.202
Restricted Cash ($M)	0.075	0.075	0.075
Convertible Notes to Related Parties ($M)	2.949	3.509	3.975
Stockholders’ Equity (Deficit) ($M)	(2.864)	(3.496)	(4.267)

Non-GAAP (as disclosed by company)

Metric	Q2 2024	Q1 2025	Q2 2025
Net Loss ex-Share-Based Comp ($M)	(0.938)	(0.632)	(0.771)

Notes: Gross margin values are computed from company-reported revenue and gross profit in the cited documents.

Segment/KPIs: No segment reporting; no quantitative KPIs beyond those shown were disclosed in the quarter’s materials .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Company Guidance	FY/Quarterly	None	None provided	Maintained at “no formal quantitative guidance”

Earnings Call Themes & Trends

Note: No Q2 2025 earnings call transcript was available in the document set; themes reflect company press releases and filings.

Topic	Previous Mentions (Q-2: Q4 FY2024; Q-1: Q1 FY2025)	Current Period (Q2 FY2025)	Trend
Distribution-led strategy	Pivot to distribution model; multiple distributor partnerships to expand reach	Working with a large distribution partner on in-plant pilots; signed multi-year Hydrite agreement	Strengthening; formalized with Hydrite
Dairy membrane solutions (CIP)	R&D focus on new CIP solutions to reduce downtime and extend membrane life	—	Advanced from lab to pilot center and into full-scale in-plant pilots; non-oxidizing solution benefits outlined
End-user revenue exposure	Q1 revenue down due to a large end-user budget constraint	—	YoY growth driven by distribution network; sequential decline indicates replacement still in progress
Liquidity/financing	Related-party notes $2.949M; deficit $(2.864)M	Notes $3.509M; deficit $(3.496)M	Notes $3.975M; cash $0.202M; deficit $(4.267)M
Gross margin	FY24 GM ~$1.152M on $1.963M revenue (~58.7%)	GM 58.5%	GM 58.1%

Management Commentary

“Our fiscal second quarter year-over-year sales growth demonstrates the progress we are making with our direct customers and distribution network… advancing our dairy membrane solutions from the microbiological laboratory bench work to the Dairy Pilot Processing Center… and into full-scale commercial in-plant pilots… working closely with a large distribution partner to ensure success in the field.” — CEO Robert Bartlett .
“The new non-oxidizing membrane solution… conserv[es] water and energy, remov[es] fouling, restor[es] throughput, and prolong[s] membrane life… reduc[ing] operational costs by minimizing Clean-In-Place cycle downtime.” .
Q1 context: “This year’s first-quarter revenue was anticipated to be lower… due to an unexpected interruption in the flow of products to one of our major customers… Significant resources are being dedicated to onboarding new distributors…” — CEO .
Strategic distribution partner: Hydrite agreement “to enhance the availability of PURE’s innovative products across various markets” .

Q&A Highlights

No Q2 2025 earnings call transcript was available; therefore no Q&A highlights or clarifications could be sourced for this quarter from transcripts [List of documents shows no 2025 call transcripts].

Estimates Context

Wall Street consensus (S&P Global) was not available for Q2 2025 during this session; company materials provided no external estimate benchmarks. As a result, no vs-consensus comparisons are presented here .
Implication: Without formal guidance or consensus, near-term estimate adjustments will hinge on conversion of dairy membrane pilots and distributor-driven order flow.

Key Takeaways for Investors

YoY improvement but mixed quarter: Revenue +20% YoY with a narrower net loss, yet a notable QoQ revenue decline as the business transitions to a distributor-led model; monitor order momentum in H2 FY25 .
Execution catalyst: Dairy membrane solution has progressed to in-plant pilots; watch for commercial wins and quantified customer savings/throughput outcomes as validation .
Channel quality: The Hydrite multi-year agreement is a tangible step to drive adoption across food/dairy; look for early purchase orders and breadth across Hydrite’s installed base .
Margin durability: Gross margin holding near high-50s suggests pricing/mix and COGS management are supportive; sustaining this while scaling would be a positive signal .
Liquidity risk: Cash of $0.202M vs. related-party convertible notes of $3.975M and a growing stockholders’ deficit heighten financing dependence; funding updates are a key stock driver .
Operating leverage path: SG&A cuts aided YoY loss improvement; scaling distribution-led revenue is needed to demonstrate operating leverage and reduce interest drag .
Near-term trade setup: Stock likely reacts to any announcements on pilot conversions, distributor ramp metrics, or financing clarity; absence of estimates/guidance amplifies headline sensitivity to such updates .

PURE BIOSCIENCE, INC. (PURE)·Q2 2025 Earnings Summary