Executive Summary

Q1 2025 revenue was $0.54M, up 72% year over year, driven by a full-scale customer demonstration that added $0.376M; net loss widened to $3.68M as opex rose with stock-based comp, legal and recruiting costs .
Management reiterated line of sight to $4–$6M FY2025 revenue and highlighted multiple 2025 deployments (OC San AS6, DoD Detroit demo, initial Waste Destruction Services at a TSDF), and signed a WDS term sheet with Crystal Clean to host AirSCWO at an Ohio RCRA Part B TSDF facility .
OC San deployment timing was pushed “a few months” to accommodate upgrades and permitting; company still plans FAT, mobilization and commissioning in 2025 (approx. $1.3M revenue milestone) .
Regulatory PFAS tailwinds intensified after EPA’s May actions, which management expects to catalyze demand across municipal, federal, and industrial markets—an ongoing stock reaction catalyst narrative .

What Went Well and What Went Wrong

What Went Well

Signed a WDS term sheet with Crystal Clean to conduct waste destruction operations at a RCRA Part B TSDF; management’s commercialization push broadened with executive and board additions .
Demonstrated 99.9999% PFAS destruction in AFFF in peer-reviewed data; reinforced efficacy at commercial scale and supported WDS launch plans .
Management reaffirmed revenue trajectory: “We have line of sight to generating $4 million to $6 million in revenue” in FY2025 and outlined scalable models (AS1/AS6/AS30/AS100+) to address diverse customer needs .
Quote: “We believe we are entering a pivotal phase for scaling our technology and the business… we have line of sight to generating $4 million to $6 million in revenue” — CEO Chris Gannon .

What Went Wrong

Total operating expenses rose 106% to $3.91M, press release citing G&A +$1.2M while CFO remarks cited +$0.9M, indicating a discrepancy likely tied to classification or rounding; professional fees increased ~$0.5M (settlement and recruiting) and compensation rose ~$0.6M .
Cash fell to $6.88M from $10.65M QoQ as operating cash outflow was $3.49M; working capital declined to $8.7M (vs. $11.5M at FY2024) .
OC San AS6 timeline slipped “a few months” due to upgrades and permitting—pushing the commissioning window and potentially delaying revenue recognition versus the February schedule .

Financial Results

Quarterly trend vs prior two quarters (oldest → newest)

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue ($USD)	$81,490	N/A (quarter not disclosed in press release)	$543,100
Net Loss ($USD)	$(2,701,817)	N/A	$(3,683,800)
EPS (Basic & Diluted, $)	$(0.02)	N/A	$(0.03)
Gross Margin ($USD)	$39,086	N/A	$138,283
Total Operating Expenses ($USD)	$2,780,825	N/A	$3,909,179
Loss from Operations ($USD)	$(2,741,739)	N/A	$(3,770,896)
Cash & Equivalents ($USD)	$1,960,375	$10,651,644	$6,883,845
Working Capital ($USD)	$4.5M	$11.5M	$8.7M

Notes: Q4 2024 filing provided full-year figures only; quarterly Q4 metrics were not disclosed in the 8-K press release or call materials .

Year-over-year for Q1

Metric	Q1 2024	Q1 2025
Revenue ($USD)	$315,278	$543,100
Gross Margin ($USD)	$(302,020)	$138,283
Net Loss ($USD)	$(2,024,465)	$(3,683,800)
EPS (Basic & Diluted, $)	$(0.02)	$(0.03)

Drivers: Q1 2025 included a full-scale customer demonstration adding $376,000 in services revenue, offset by ~$162,000 lower equipment manufacturing revenue; opex stepped up on stock-based comp, legal settlement and recruiting fees .

KPIs and operational context

KPI	Q3 2024	Q4 2024	Q1 2025	Trend/Notes
Backlog & pipeline (cumulative)	>$1.8B	Reiterated scaling ambition	Line of sight $4–$6M FY25 revenue	Pipeline robust; near-term revenue visibility affirmed
AFFF PFAS destruction efficacy	99.999%+ demonstrated (internal and commercial scale)	—	99.9999% peer-reviewed data	Efficacy reinforced in peer-reviewed context
WDS partnerships	Strategy outlined	—	Signed Crystal Clean WDS term sheet (Ohio TSDF)	Commercial DAAS channel progressing
OC San project schedule	—	—	Mobilizing in 1H25; installation delayed “a few months”	Updated timing; ~$1.3M 2025 milestone revenues

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	“Line of sight” to $4–$6M	Reaffirmed $4–$6M	Maintained
OC San AS6 deployment	2025	FAT in May; delivery/mobilization in May; commissioning thereafter; ~$1.3M revenue in Q2–Q4	Begin mobilizing in June; “full system installation… likely to be delayed by a few months” as upgrades/permitting complete	Lowered/Delayed
DoD Detroit demo	2025	Anticipated DoD commercial-scale PFAS demo	Mobilization June; on-site July; multi-month demos	Firmed timeline
TSDF WDS rollout	2025	Pursuing TSDF partnerships	Signed Crystal Clean term sheet; hosting, hauling, storage, joint marketing	Raised (execution progress)

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024 and Q4 2024)	Current Period (Q1 2025)	Trend
PFAS regulatory/macro	EPA recognition of SCWO as emerging PFAS destruction tech; bipartisan momentum; DoD cleanup funding	EPA’s new actions underscore tailwinds; management expects demand acceleration	Strengthening regulatory tailwinds
Product/technology	Ruggedizing/optimizing AS systems; expanded lab capacity; AS1/AS6 builds in progress; AS30/AS100+ roadmap	Continued improvements; strong efficacy across multiple waste streams; manufacturing near completion for AS1/AS6	Execution toward commercialization
OC San deployment	FAT and delivery planned for 2025; customer visit to Orlando site	Mobilization June; installation delayed a few months for upgrades/permitting	Timing slip; still 2025 commissioning
WDS/TSDF partnerships	Actively pursuing TSDFs; DAAS recurring revenue model	Crystal Clean term sheet signed; revenue sharing/hosting model	Concrete progress to DAAS revenue
DoD demo	Selected to participate; federal PFAS remediation pipeline	June mobilization; July on-site; expected “golden ticket” contracting mechanism	Near-term federal catalyst
Manufacturing/capacity	Capacity 2–4 systems at a time; Orlando manufacturing hub	AS1/AS6 near completion; capacity adequate near term	Scaling incrementally

Management Commentary

“We believe we are entering a pivotal phase for scaling our technology and the business… we have line of sight to generating $4 million to $6 million in revenue [FY2025]” — CEO Chris Gannon .
“On the AirSCWO 30 we project that the revenue potential for that unit will be between $12 million and $20 million on an annual basis” — CFO Russell Kline (on DAAS unit economics) .
“While we still plan to begin mobilizing equipment to OCSAN in June, full system installation is likely to be delayed by a few months to complete further upgrades to the AS system and as OCSAN secures requisite permits” — CEO Chris Gannon .
“Our technology has consistently shown PFAS >99.9999% destruction and removal efficiency operating at commercial scale” — CEO Chris Gannon .

Q&A Highlights

TSDF DAAS economics: AS30 annual revenue potential projected at $12–$20M depending on material and utilization, reinforcing a significant recurring revenue pathway .
DoD demo timing: Mobilization in June, on-site in July; management expects multi-month demos and potential streamlined contracting (“golden ticket”) thereafter .
North Carolina AFFF contract: Initial 1,000 gallons pickup begins within a month; phased expansion could reach 29,000 gallons .
Manufacturing capacity: Current ability to build 2–4 systems concurrently; Orlando facility supports near-term scaling .
Guidance clarification: OC San installation pushed “a few months” for upgrades/permitting; still aiming to commission in 2025 .

Estimates Context

Coverage is limited. No published consensus for Q1 2025 was available via S&P Global; Q3 2024 had one estimate for EPS at $(0.02)* and revenue at $0.0*, both with 1 estimate* [GetEstimates].
Implications: Minimal sell-side coverage constrains traditional “beat/miss” framing. Near-term estimate revisions will likely center on timing of OC San commissioning, TSDF DAAS ramp, and DoD demo conversion.

Metric	Q3 2024	Q4 2024	Q1 2025
Revenue Consensus Mean ($USD)	$0.0*	N/A*	N/A*
Primary EPS Consensus Mean ($)	$(0.02)*	N/A*	N/A*
Revenue – # of Estimates	1*	N/A*	N/A*
Primary EPS – # of Estimates	1*	N/A*	N/A*

Values retrieved from S&P Global.*

Key Takeaways for Investors

Commercial momentum: Q1 revenue inflected on services; Crystal Clean TSDF term sheet, DoD demo timing, and OC San commissioning are tangible catalysts for the next 2–3 quarters .
Execution watch: Track OC San FAT/mobilization milestones and permitting; ~$1.3M revenue tied to 2025 schedule offers near-term validation .
DAAS economics: AS30 unit-level DAAS potential ($12–$20M annual) underscores the attractiveness of recurring service revenue as TSDF partnerships scale .
Regulatory tailwinds: EPA’s PFAS actions strengthen the demand narrative across municipal/federal/industrial markets; positioning favors solutions with proven PFAS destruction efficacy .
Cash runway and funding: Cash at $6.9M; management evaluating strategic capital options—monitor for financing or strategic partnerships to support scale-up .
Estimate dynamics: Sparse coverage limits beat/miss frameworks; investors should focus on operational milestones, contract conversions, and DAAS ramp to calibrate revenue trajectories [GetEstimates].
Risk/concern: Opex intensity (stock comp, legal, recruiting) and timeline slips at OC San could push revenue recognition; watch for manufacturing/supply chain updates and schedule adherence .

374Water Inc. (SCWO)·Q1 2025 Earnings Summary