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TOMI Environmental Solutions, Inc. (TOMZ)·Q2 2025 Earnings Summary

Executive Summary

  • Q2 revenue declined 66% year over year to $1.03M as customers deferred capital equipment amid macro uncertainty and tariff impacts; gross margin improved to 66% on higher mix of BIT solution and services, but EPS was $(0.06) versus consensus $(0.03) (miss) . Q2 revenue consensus was $1.77M (miss); EBITDA was below consensus as well (see Estimates Context) *.
  • Services momentum continued: service revenue +33% YoY in Q2 to $0.38M; YTD service revenue +46% and BIT solution sales +40% YoY; management emphasized the “solution model is starting to work” .
  • Backlog and pipeline support 2H: backlog was ~$1.4M at 6/30; by Aug 7, combined recognized revenue + deferred revenue + backlog totaled ~$4.6M; management negotiating ~$2M of CES/SIS contracts; open opportunities ~$15M with $7M high-priority .
  • Potential stock catalysts: SIS platform traction (university order via ARES Distribution; “eye health” customer ~$(0.385)M 2025 purchases), NASA validation, and pending EU/UK registrations plus FDA initiatives (510(k); Food Contact Notification) that could expand addressable markets .

What Went Well and What Went Wrong

  • What Went Well

    • Services/solutions mix drove margin resilience: Q2 gross margin 66% vs 62% LY; service revenue +33% YoY; YTD solution sales +40% as the razor/razor-blade model gains traction .
    • Commercial traction and validation: SIS order for a biomedical research university via ARES (delivery late 2025) and repeat “eye health” customer with ~$0.385M 2025 purchases; NASA project validated and operational .
    • Management tone/quote: “The solution model is starting to work... Recognized revenue was a bit disappointing, but management is energized to make the second half of the year and beat our budget” .

  • What Went Wrong

    • Material revenue shortfall and operating deleverage: Sales fell to $1.03M (–66% YoY) and operating loss widened to $(1.13)M; net loss $(1.24)M and EPS $(0.06) .
    • Macro/tariff headwinds: Customers deferred capex for mobile equipment and CES; management specifically cited uncertainty and tariff impacts on supply chains and long‑term planning .
    • Liquidity tighter: Cash and equivalents were ~$0.57M at 6/30; deferred revenue increased to ~$0.72M indicating future delivery obligations; shareholders’ equity fell to ~$2.66M .

Financial Results

P&L snapshot (YoY and QoQ context)

MetricQ2 2024Q1 2025Q2 2025
Revenue ($USD)$3,013,392 $1,576,558 $1,031,115
Gross Margin %62% 60.4% 66%
Operating Income (Loss) ($USD)$121,812 $(754,465) $(1,132,689)
Net Income (Loss) ($USD)$30,198 $(255,593) $(1,237,516)
Diluted EPS ($)$0.00 $(0.01) $(0.06)

Product vs. Service (Q2 comparison)

MetricQ2 2024Q2 2025
Total Sales, net ($USD)$3,013,392 $1,031,115
Service Revenue ($USD)$285,000 $378,000
Product Revenue ($USD, calc)$2,728,392 $653,115

Note: Product revenue is calculated as Total Sales less Service Revenue (cells cite sources for both components).

KPIs and Balance Sheet/Liquidity

KPIQ2 2025
Gross Margin %66%
Service Revenue YoY Growth+33%
BIT Solution Sales Growth (YTD)+40%
Backlog (6/30/25)~$1.4M
Recognized + Deferred + Backlog (as of 8/7/25)~$4.6M
Deferred Revenue (6/30/25)$719,235
Approx. Customer Deposits (mgmt comment)~$400,000
Working Capital (6/30/25)~$2.8M
Cash & Cash Equivalents (6/30/25)$569,450
International Mix (Q2)~20% of revenue
SIS‑SA expected FY25 revenue“in excess of half a million dollars”
Eye health customer 2025 purchases~$385,000

Versus Wall Street estimates (Q2 2025)

MetricActualConsensusBeat/Miss
Revenue ($USD)$1,031,115 $1,769,000*Miss
EPS ($)$(0.06) $(0.03)*Miss
EBITDA ($USD)$(1,063,451)*$(614,000)*Miss

Values with asterisks (*) retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Company GuidanceFY 2025None providedNone providedN/A

Management provided qualitative commentary (backlog, pipeline, negotiations, registrations) but no formal numerical guidance ranges for revenue, margins, opex, tax, or segments .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4’24 and Q1’25)Current Period (Q2’25)Trend
Mix/Margins & Solution ModelQ4’24 GAAP gross margin was negative due to non‑cash charges; non‑GAAP margin 54% . Q1’25 gross margin ~60% with strong solution sales growth .Gross margin 66%; YTD solution +40%; mgmt: “solution model is starting to work” .Improving mix, higher‑margin recurring components.
Tariffs/Macro & Capex DeferralsNot emphasized in Q1 PR; pipeline/backlog highlighted .Customers deferred capex; cited uncertainty and tariff impacts on supply chains/long‑term planning .Headwind for product sales near term.
OEM/Channel PartnershipsPBSC OEM partnership announced in March .Additional SIS order via ARES; expanding partner network .Broadening ecosystem supporting SIS.
Regulatory/ApprovalsNot highlighted in prior releases.Pending EU/UK registrations; FDA 510(k) pathway; pursuing FDA Food Contact Notification for food safety use cases .Potential TAM expansion.
Government/AerospaceNASA deployment announced in March .NASA project validated and operational; pursuing publication .Credibility/validation tailwind.
Backlog/PipelineBacklog $1.23M (3/31) .Backlog ~$1.4M (6/30); combined recognized+deferred+backlog ~$4.6M (8/7) .Building into 2H.
International2024 international revenue +33% YoY .~20% of Q2 revenue international .Sustained contribution.

Management Commentary

  • “As of August 7, the combined total recognized revenue, deferred revenue and sales order backlog was approximately $4,600,000 with active projects on schedule for delivery in 2025” .
  • “Service revenue… grew by an impressive 33% compared to the same period last year… our gross margins [rose] to 66% this quarter” .
  • “The solution model is starting to work… Recognized revenue was a bit disappointing, but management is energized to make the second half of the year and beat our budget” .
  • COO on partnerships/channel: “First formal OEM partnership with PBSC… SIS win with a university in Miami… expanding partner network” .
  • Regulatory pathway: pursuing EU/UK registrations and FDA 510(k) and FCN to enable food‑contact applications .

Q&A Highlights

  • Margin dynamics: High‑margin solution sales were reiterated as a driver of the 66% gross margin; more installed base supports recurring solution pull‑through .
  • Macro/capex deferrals: Management sees signs of deferred projects returning; deposits increased; deferred revenue ~$0.7M and customer deposits around ~$0.4M suggest pending deliveries .
  • Policy tailwinds: Potential U.S. pharma reshoring and other high‑spec industries (servers, microchips) seen as medium‑term opportunities for decontamination solutions .
  • Regulatory initiatives: FDA 510(k) tied to decon chambers; FCN aimed at enabling certain food‑contact applications (e.g., avocado mold, salmonella/listeria risk) .
  • New use cases: Ongoing application testing (e.g., floriculture shelf‑life extension) though still early with hurdles ahead .

Estimates Context

  • Q2 2025 vs consensus: Revenue $1.03M vs $1.77M* (miss); EPS $(0.06) vs $(0.03)* (miss); EBITDA $(1.06)M* vs $(0.61)M* (miss) . Coverage is limited (one estimate), which can amplify volatility in “beat/miss” optics.
  • Forward snapshot: Q4 2025 revenue consensus ~$2.31M* and EPS consensus ~$(0.02)* with just one estimate*, suggesting models may adjust as execution on backlog/SIS deliveries clarifies into year‑end*.

Values with asterisks (*) retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Formal Financial GuidanceFY 2025None providedNone providedN/A

Management reiterated qualitative objectives (build services/solution recurrence; grow SIS/CES pipeline; expand internationally; pursue government/institutional partnerships; strengthen balance sheet/team) without numerical ranges .

Key Takeaways for Investors

  • Near‑term: Expect lumpy product revenue given capex deferrals, but watch for scheduled SIS/CES deliveries and growth in services/solution sales to sustain margins into 2H .
  • Margin story: Mix shift toward recurring solutions and services is lifting gross margin (66% in Q2) and could mitigate product cyclicality .
  • Pipeline to revenue: ~$4.6M combined recognized+deferred+backlog as of Aug 7 and ~$2M of contracts under negotiation provide visibility if projects convert on schedule .
  • Regulatory unlocks: EU/UK registrations and FDA 510(k)/FCN could open new verticals (medical devices, food safety) and accelerate SIS/solution adoption .
  • Validation/catalysts: NASA operational validation and SIS wins (university via ARES; repeat “eye health” customer) support credibility and cross‑sell across life sciences .
  • Liquidity watch: Cash ~$0.57M at 6/30 and rising deferred revenue/customer deposits argue for disciplined working capital and timely project execution .
  • Estimates risk: Thin coverage (one estimate) increases the chance of optical beats/misses; as delivery cadence normalizes, models may recalibrate around services/solution growth*.

References: Q2 2025 earnings call transcript –; Q2 2025 press release/8-K exhibit – –; ARES university SIS order ; eye health customer repeat orders ; SIS‑SA product update ; Q1 2025 press release –; Q4 2024 press release –. Values with asterisks (*) retrieved from S&P Global.