Executive Summary

Record revenue of $0.69M (+43% YoY, +10% QoQ) and strong gross margin of 62.8%, with Adjusted EBITDA loss improving to $(1.231)M, the best in company history .
Product mix continued to shift to higher-margin Evolve (85% of revenue, +77% YoY), with channel breadth: e-commerce 54% of sales (+55% YoY), PMPs 19% (+29% YoY, +72% QoQ), retail +254% YoY, municipal +139% YoY .
Cash and short-term investments totaled $10.2M, with management emphasizing a potential path to profitability without further equity offerings, supported by disciplined OpEx and margin structure .
Estimate comparison: Revenue modest miss vs consensus ($0.69M vs $0.73M*), but EPS beat (–$0.28 vs –$0.35*) as cost discipline offset one-time legal expense; coverage is thin (# of estimates = 1*) .
Near-term catalysts: Lowe’s.com listing with discussions on ~100-store test, municipal deployments (NYC, Chicago) influencing other channels, and international approvals (New Zealand) building for container orders .

What Went Well and What Went Wrong

What Went Well

“Record revenues, strong gross margins, reduction in our operating expenses…resulting in the best adjusted EBITDA in the company's history” .
Evolve products driving mix shift and margin: 85% of revenue (+77% YoY), contributing to 62.8% gross margin and improved cash utilization .
Multi-channel momentum: e-commerce 54% of Q3 revenue (+55% YoY), retail +254% YoY, municipal +139% YoY, PMPs +29% YoY and +72% QoQ; CEO: “multi-channel distribution strategy continues to take hold” .

What Went Wrong

Revenue slightly below consensus (–$40k vs $0.73M*) with only one covering estimate, highlighting limited external coverage and variability .
One-time legal expense ($111k) and non-cash lease expense ($49k) weighed on reported net loss; excluding these, net loss would have been ~$1.1M .
ContraPest declined ~31% YoY and is now 15% of sales, underscoring dependence on Evolve and the need to sustain momentum in newer channels .

Financial Results

Metric	Q1 2025	Q2 2025	Q3 2025
Revenue ($USD)	$485,000	$625,000	$690,000
YoY Growth (%)	+17%	+36%	+43%
Sequential Growth (%)	—	+28.9% (calc; sources )	+10%
Gross Profit ($USD)	$313,000	$409,000	$433,000
Gross Margin (%)	64.5%	65.4%	62.8%
Net Loss ($USD)	$(1,665,000)	$(1,616,000)	$(1,298,000)
EPS (Basic & Diluted, $)	$(1.28)	$(0.87)	$(0.28)
Adjusted EBITDA ($USD)	$(1,506,000)	$(1,442,000)	$(1,231,000)

Product/Channel KPIs	Q1 2025	Q2 2025	Q3 2025
Evolve % of Revenue	79%	83%	85%
Evolve YoY Growth (%)	+40%	+94%	+77%
E-commerce % of Revenue	—	—	54%
E-commerce YoY Growth (%)	+107%	+78%	+55%
PMPs % of Revenue	—	—	19%
PMPs Growth	—	—	+29% YoY; +72% QoQ
Retail YoY Growth (%)	—	+478%	+254%
Municipal YoY Growth (%)	—	“expanded deployments” (qualitative)	+139%

Balance Sheet Highlights	Q4 2024	Q2 2025	Q3 2025
Cash & Equivalents ($USD)	$1,307,000	$6,055,000	$7,278,000
Short-term Investments ($USD)	—	—	$2,970,000
Cash + ST Investments ($USD)	—	—	$10,248,000
Stockholders’ Equity ($USD)	$2,511,000	$6,977,000	$11,348,000

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Cash Runway	As of Q2 2025	$11.2M cash; operating runway through end of 2027 and beyond (based on quarterly run rate)	$10.2M cash & ST investments; “solid operating runway”	Maintained (qualitative)
Profitability Path	2025	Breakeven revenue threshold lowered to ~$7M; accelerating toward profitability	Poised to achieve profitability; potential path without additional equity offerings	Maintained/Improved (qualitative)
Revenue/Margins Formal Guidance	Q4 2025 / FY	Not provided	Not provided; focus on margin/OpEx discipline	Maintained (no formal ranges)
Financing	Ongoing	ATM dormant; warrants optionality not detailed previously	2.2M short-term warrants at $5.25 potentially >$11.4M; ATM dormant	Disclosure expanded

Earnings Call Themes & Trends

Topic	Previous Mentions (Q1 & Q2)	Current Period (Q3 2025)	Trend
E-commerce	Q1: +107% YoY growth DTC channels ; Q2: +78% YoY; Amazon double-digit MoM since Jan	54% of revenue; +55% YoY; Amazon double-digit monthly; Lowe’s.com launch; tightened ad spend seasonally	Sustained growth; platform expansion
Retail	Q2: Bradley Caldwell partnership; +478% YoY	+254% YoY; Ace Hardware expanded coverage, reorders from Bradley Caldwell	Continued adoption; broadening placements
Municipal	Q1/Q2: NYC pilot; expanded deployments (Chicago, Boston, SF, LA County, Baltimore)	+139% YoY; NYC showing “exceptional results” (100% consumption), Chicago SSAs expanding	Accelerating pilots; spillover to other channels
PMPs	Q1/Q2: growing awareness/use	19% of revenue; +29% YoY; +72% QoQ; theme park repeat orders	Rapid adoption; repeat usage
International	Q1/Q2: 11 distribution agreements; AU/NZ approvals pending	New Zealand approval; 18 exclusive distributors; container orders expected post-approvals	Building approvals; order pipeline shaping
Manufacturing	Q2: new facility; automation for capacity/margins	Phoenix-area facility completed; efficiency gains targeted	Capacity readiness
Pricing Strategy	—	Positioned “middle of pack”; willing to discount for large orders; comfortable price point	Stable pricing; tactical discounting
Legal/Regulatory	—	Levitech lawsuit disclosed; management views claims as baseless; non-operational legal costs in Q3	Monitoring; manageable impact

Management Commentary

CEO: “Record revenues, strong gross margins, reduction in our operating expenses…best adjusted EBITDA in the company's history…a strong balance sheet, which will bridge us to profitability” .
CEO: “Multi-channel distribution strategy continues to take hold…meaningful contributions from e-commerce, municipal programs, retail partners, and pest management professionals” .
CFO: “Gross margins remained strong at 63%…lowest adjusted EBITDA loss in the company's history…path where we do not need to proactively raise additional diluted capital” .
CEO: “First-mover advantage in rodent birth control…diverse and scalable go-to-market strategy…lean-focused growth strategy which balances revenue growth with operational efficiencies” .

Q&A Highlights

Retail expansion: Discussions with Lowe’s about ~100-store test after e-commerce listing; timeline expectations around end of Q2 next year .
PMP channel: 20% of sales; strong reorder behavior as birth control becomes integrated into IPM programs .
E-commerce mix: 54% of quarterly revenue; price positioned mid-pack on Amazon; comfortable with current price, open to tactical discounting for large orders .
International: New Zealand approval secured; 18 exclusive distributors working on approvals; expectation of container orders post-approval .
Legal: Levitech lawsuit explained; management views assertions as baseless; noted $111k one-time legal expense in quarter .

Estimates Context

Metric	Q3 2025 Consensus	Q3 2025 Actual	Surprise
Revenue ($USD)	$730,000*	$690,000	Miss of $40,000 (–5.5%)*
Primary EPS (GAAP) ($)	–$0.35*	–$0.28	Beat of $0.07 (20% smaller loss)*
# of Estimates (Revenue / EPS)	1 / 1*	—	Thin coverage*

Drivers: Revenue slightly under consensus amid seasonally reduced ad spend in late July/August before re-accelerating in September; EPS beat driven by strong margins (62.8%) and lower OpEx, partially offset by one-time legal expense .
Values retrieved from S&P Global.*

Key Takeaways for Investors

Margin quality + mix shift: Evolve now 85% of revenue with durable gross margin >60%; this underpins improving EBITDA trajectory .
Channel diversification mitigates single-point risk: e-commerce, PMPs, retail, and municipal all contributing, creating multiple “shots on goal” for step-change growth .
Near-term catalysts: Lowe’s ~100-store test, NYC/Chicago municipal expansions, and New Zealand approval could accelerate orders and visibility .
Financing flexibility: $10.2M cash/ST investments and optionality via warrants/ATM reduce near-term dilution risk as profitability approaches .
Watch estimate convergence: Thin coverage (1 estimate) increases headline beat/miss variance; results suggest EPS resilience even with modest revenue variability .
Legal overhang manageable: One-time legal expense impacted GAAP loss; management views suit as baseless—monitor resolution and cost trajectory .
Tactical execution: Seasonality-aware ad spend and new facility efficiencies support gross margin stability and OpEx discipline into Q4 .

SenesTech, Inc. (SNES)·Q3 2025 Earnings Summary