Executive Summary

Q2 revenue fell to $31.4M (−11.5% YoY) and EPS was −$0.09 as tariffs reduced transportation-related demand and a Mexico shipment conversion to value‑add (sub‑maquiladora) lowered recognized revenue; operating loss was $1.44M vs $1.27M income a year ago .
Orders in Sypris Electronics rose 110% to $47M, lifting backlog 26% from YE24; energy product orders rose slightly and backlog also increased 26% from YE24, underpinning medium‑term demand despite near‑term headwinds .
Segment mix and material availability issues sharply compressed Electronics gross margin to 2.5% (vs 16.5% YoY), while Technologies held 15.2% margin; management cited out‑of‑sequence manufacturing and tariffs as key drivers .
Guidance remains suspended (withdrawn May 14 due to tariff uncertainty); Q2 outlook calls for a modest revenue decline near term with backlog strength as partial offset—key debate is timing of Electronics execution and tariff overhang normalization .

What Went Well and What Went Wrong

What Went Well

Electronics demand accelerated: “Orders for Sypris Electronics increased 110% to $47 million, driving backlog up 26% from year‑end 2024,” supported by electronic warfare and communications end markets .
New wins support 2026+ visibility: follow‑on awards for U.S. Army AKMS cryptographic assemblies and U.S. Navy electronic warfare systems; production slated to begin in 2026, extending runway .
Energy product momentum: energy orders increased slightly YoY and backlog up 26% from YE24; management highlighted LNG and data center electricity demand (AI) as potential growth drivers .

What Went Wrong

Tariff impact and Mexico contract structure change cut revenue: conversion of certain shipments to a sub‑maquiladora basis reduced revenue by ~$1.6M vs prior‑year period in Technologies; tariff uncertainty further pressured volumes .
Supply/material constraints: Electronics revenue slipped to $17.3M and margin to 2.5% on delays and out‑of‑sequence manufacturing; execution limited the ability to ramp to demand .
Profitability deterioration: total company swung to operating loss (−$1.44M) and net loss (−$2.05M), vs breakeven last year, reflecting lower mix/volume and inefficiencies .

Financial Results

Summary P&L (oldest → newest)

Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Revenue ($M)	$35.52	$33.45	$29.51	$31.43
Operating Income (Loss) ($M)	$1.27	$1.30	$(0.13)$	$(1.44)$
Net Income (Loss) ($M)	$0.02	$0.14	$(0.90)$	$(2.05)$
Diluted EPS ($)	$0.00	$0.01	$(0.04)$	$(0.09)$

Segment Breakdown and Margins (oldest → newest)

Segment Metric	Q2 2024	Q4 2024	Q1 2025	Q2 2025
Sypris Technologies Revenue ($M)	$17.84	$19.55	$13.57	$14.10
Sypris Technologies Gross Profit ($M)	$2.72	$4.39	$2.11	$2.14
Sypris Technologies Gross Margin (%)	15.2%	22.5%	15.5%	15.2%
Sypris Electronics Revenue ($M)	$17.68	$13.90	$15.94	$17.33
Sypris Electronics Gross Profit ($M)	$2.92	$0.99	$1.26	$0.44
Sypris Electronics Gross Margin (%)	16.5%	7.1%	7.9%	2.5%

KPIs and Commercial Developments

Electronics orders: $47M; Electronics backlog +26% vs YE24 .
Energy products: orders increased slightly YoY; backlog +26% vs YE24 .
DoD/Navy wins (deliveries start 2026): AKMS cryptographic assemblies; EW improvement program additional four systems .
Subsea communications awards (production underway through 2026) .
Long‑term agreement to supply drivetrain components for a new electrified truck platform (deliveries expected 2026) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	FY 2025	$125–$135M (issued Mar 27, 2025)	Guidance withdrawn May 14, 2025	Withdrawn
Gross Margin Expansion	FY 2025	+150–175 bps (vs 2024)	Guidance withdrawn May 14, 2025	Withdrawn
Gross Profit Growth	FY 2025	+10–15% (vs 2024)	Guidance withdrawn May 14, 2025	Withdrawn
Qualitative Revenue Trajectory	Near term (Q2 outlook)	N/A	“Anticipate a modest decline in revenue” with backlog strength as partial offset	New qualitative commentary

Earnings Call Themes & Trends

Note: An earnings call transcript could not be located; themes are synthesized from Q4’24, Q1’25, Q2’25 press releases.

Topic	Previous Mentions (Q4 2024 and Q1 2025)	Current Period (Q2 2025)	Trend
Tariffs/Macro	Tariffs cited as a risk factor; 2025 guide initially contemplated Mexico shipment conversion	Tariffs reduced transportation demand; Mexico sub‑maquiladora conversion reduced revenue by ~$1.6M	Worsened near term
Supply chain/material availability	Electronics delays and supplier issues constrained Q4 shipping	Material availability caused delays and out‑of‑sequence manufacturing, limiting ramp and raising cost	Persistent headwind
Defense electronics demand (EW/secure comms)	Backlog >$90M at Electronics; robust demand (EW, avionics, secure/subsea)	Orders +110% to $47M; multiple follow‑on awards in EW and cryptographic programs	Improving demand/visibility
Energy/LNG & data centers (AI power)	Orders up; LNG and data center electricity demand cited as growth drivers	Energy orders slightly up; backlog +26%; AI/data center electricity demand reiterated	Gradually positive
Mexico/contract structure	2025 guide acknowledged sub‑maquiladora impact	Sub‑maquiladora reduced recognized revenue; FX partially offset in Tech	Implementation headwind
Backlog/Orders	Electronics backlog >$90M (Q4); “over $80M” (Q1)	Electronics orders surge; backlog +26% vs YE24	Stronger orders; backlog up vs YE24

Management Commentary

“We are focused on operational excellence to drive the timely and efficient execution of the rapidly growing demand at Sypris Electronics. Customer funding has already been secured for a portion of the key programs, which enables us to procure inventory under multi‑year purchase orders to mitigate future supply chain issues.” — CEO Jeffrey T. Gill .
“A moderate decrease in production is anticipated this year from Sypris Technologies customers in the automotive, commercial vehicle, sport‑utility and off‑highway markets… market diversification… will help offset some of the anticipated cyclical decline.” .
“Additional opportunities for growth may exist with new global projects in support of increasing LNG demand, including support for the projected steep increase in electricity demand from data centers to support AI.” .
Outlook: “We anticipate a modest decline in revenue… [but] expect the combined strength of our backlog for Sypris Electronics and robust orders for our energy products to serve as a partial offset.” .

Q&A Highlights

An earnings call transcript for Q2 2025 was not available at the time of analysis; MarketBeat lists a call on Aug 12, 2025 (8:00 AM ET), but no transcript details were accessible, so we cannot provide Q&A themes or tone shifts .

Estimates Context

S&P Global consensus estimates for Q2 2025 appeared unavailable for EPS and revenue; only actuals were present in the feed, so we benchmark against reported results. Values retrieved from S&P Global.* [GetEstimates]

Metric (Q2 2025)	Consensus	Actual
Revenue ($M)	N/A*	$31.43
EPS ($)	N/A*	$(0.09)$

*Values retrieved from S&P Global.

Implication: Limited sell‑side coverage reduces estimate anchoring; buy‑side will focus on order momentum vs execution cadence and tariff/mix headwinds .

Key Takeaways for Investors

Near‑term print weaker on tariffs, mix, and execution bottlenecks; the core bull point is accelerating Electronics demand (orders +110%) and backlog growth (+26% vs YE24) that should support recovery as materials and sequencing normalize .
Technologies revenue is structurally lower due to sub‑maquiladora accounting; however, FX benefits and energy backlog underpin mid‑teens gross margins even at lower volumes .
Execution watch‑items: resolve Electronics material constraints, reduce out‑of‑sequence work, and convert the enlarged orders/backlog to shipments and margin restoration from 2.5% toward historical mid‑to‑high‑single‑digits .
Macro/tariff overhang drove guidance withdrawal; absent formal guidance, use order/backlog and award cadence (EW, crypto, subsea) as leading indicators for 2026 revenue trajectory .
Contract wins with 2026 start dates (defense, subsea, electrified truck) create a multi‑year runway; key is bridging 2H25 with improved materials flow and delivery schedules .
Balance sheet watch: cash $6.35M, inventories $58.6M at Q2; working capital tied in inventory should unwind as supply/deliveries normalize, aiding operating cash flow .
Trading setup: limited estimate anchors and microcap liquidity suggest higher sensitivity to incremental execution updates (materials, delivery cadence) and new award flow; press releases remain key catalysts .

Supporting Press Releases (Q2 timeframe)

Sypris Wins Award for Cryptographic Program (AKMS; production begins 2026) .
Sypris Receives New Award Under Electronic Warfare Program (additional four systems; deliveries begin 2026) .
Sypris Wins Awards to Support Subsea Cable Systems (production underway through 2026) .

Appendix: Additional Details

Mexico sub‑maquiladora impact quantified at ~$1.6M revenue reduction vs prior‑year period in Q2 for Technologies; FX tailwind of ~$0.4M supported gross profit .
Electronics material availability delayed deliveries and limited ramp, increasing cost via out‑of‑sequence manufacturing .
Balance sheet at Q2: cash $6.35M, accounts receivable $10.43M, inventory $58.58M; total assets $105.84M; total stockholders’ equity $18.68M .
Cash flow 1H25: CFO $(4.44)M; inventory decreased $8.19M, offset by working capital outflows; financing inflows included $3.0M related party note .

Citations: Q2 2025 8‑K press release and financial statements ; Q1 2025 8‑K ; Q4 2024 8‑K ; Additional press releases ; Call listing .

SYPRIS SOLUTIONS INC (SYPR)·Q2 2025 Earnings Summary