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ZC

Zomedica Corp. (ZOMDF)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 revenue was $6.5M (+4% YoY) with gross margin of 68%; segment mix favored Therapeutic Devices ($5.9M) while Diagnostics fell to $0.6M due to non-repeating distributor orders .
  • GAAP net loss widened to $63.8M driven by a non-cash $55.8M impairment tied to market capitalization decline; adjusted operating expenses were $13.2M (-9% YoY) reflecting cost control .
  • Results missed Wall Street consensus: revenue $6.5M vs $7.3M estimate and EPS -$0.065 vs -$0.007 estimate; bold miss driven by impairment and softer capital/diagnostics sales versus prior year distribution boost * *.
  • Liquidity remained strong at $64.6M; management highlighted continued consumables strength (PulseVet trodes) and growing TRUFORMA adoption as recurring revenue catalysts .

What Went Well and What Went Wrong

What Went Well

  • Consumables revenue grew 13% to $4.5M, underpinned by PulseVet trodes usage and accelerating TRUFORMA adoption, supporting recurring sales .
  • Therapeutic Device segment revenue rose 8% YoY to $5.9M; gross margin improved to 68% vs 66% in Q1 2024 .
  • International sales up 32% YoY with new distributor orders; portfolio expanded with VETIGEL and commercial optimization underway. “We posted record year over year revenue for the 17th straight quarter… strongest first quarter in company history” — Larry Heaton, CEO .

What Went Wrong

  • Diagnostics segment revenue declined 25% YoY to $0.6M, as large initial VetGuardian distribution orders from Q1 2024 did not repeat .
  • Capital revenues fell 12% YoY to $2.0M, reflecting the same distribution dynamic impacting Diagnostics .
  • A non-cash impairment of $55.8M led to GAAP net loss of $63.8M and materially negative GAAP EPS; selling and marketing expenses increased 22% YoY to $5.0M due to sales headcount investments .

Financial Results

Core Financials (GAAP)

MetricQ1 2024Q4 2024Q1 2025
Revenue ($USD Millions)$6.26 $7.90 $6.50
Diluted EPS ($USD)-$0.0093*-$0.01 -$0.065
Gross Margin (%)66% 70.3% 68%
Net Loss ($USD Millions)$9.23 $7.20 $63.77

Values with asterisk retrieved from S&P Global.

Non-GAAP and Operating Detail

MetricQ1 2024Q4 2024Q1 2025
Non-GAAP EBITDA Loss ($USD Millions)$7.45 —$61.72
Adjusted Non-GAAP EBITDA Loss ($USD Millions)$5.26 $5.40 $5.75
Total Operating Expenses ($USD Millions)—$13.7 $69.0 (incl. impairment); $13.2 adjusted
Liquidity ($USD Millions)—$71.4 $64.6

Segment and Category Breakdown (Q1 2025)

BreakdownAmount ($USD Millions)YoY Change
Therapeutic Devices (PulseVet, Assisi)$5.9+8%
Diagnostics (TRUFORMA, TRUVIEW, VETGuardian)$0.6-25%
Consumables$4.5+13%
Capital$2.0-12%

KPIs and Other Items (Q1 2025)

KPIQ1 2025Prior Period
International Sales Growth+32% YoY —
Gross Margin68% 66% (Q1 2024)
Cash, Cash Equivalents & AFS Securities$64.6M $71.4M (Dec 31, 2024)
Shares Outstanding979,949,668 —

Actuals vs Consensus (Q1 2025)

MetricConsensusActualResult
Revenue ($USD Millions)$7.30*$6.50 Bold miss
EPS ($USD)-$0.007*-$0.065 Bold miss

Values with asterisk retrieved from S&P Global.

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
RevenueFY/Q2 2025Not providedNot providedMaintained: No formal quantitative guidance
Gross MarginFY/Q2 2025Not providedNot providedMaintained: No formal quantitative guidance
OpExFY/Q2 2025Not providedNot providedMaintained: No formal quantitative guidance
EPS/Net IncomeFY/Q2 2025Not providedNot providedMaintained: No formal quantitative guidance
Tax RateFY/Q2 2025Not providedNot providedMaintained: No formal quantitative guidance
Segment-SpecificFY/Q2 2025Not providedNot providedMaintained: No formal quantitative guidance

Note: Q1 materials include forward-looking statements but no explicit quantitative guidance ranges .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q4 2024)Current Period (Q1 2025)Trend
AI/Technology Initiatives (TRUVIEW digital cytology, AI reports)Emphasis on expanding assays and automation; manufacturing efficiency investments “Near completion of the AI component; plan full launch; monetized via subscription + optional AI/pathology add-ons” — CEO Improving execution/feature rollout
Product Performance (TRUFORMA assays; VetGuardian)Diagnostics grew 109% YoY in Q4; TRUFORMA/VetGuardian adoption Diagnostics -25% YoY as Q1 2024 initial distributor orders did not repeat; TRUFORMA adoption continues Mixed: continued adoption but tough comp
Regional Trends80% US / 20% International; strong 2024 international progress International sales +32% YoY; new distributors Positive
Supply Chain/TariffsRisk disclosures include tariff/supply chain considerations Forward-looking note reiterates supply chain/tariff risks Ongoing monitoring
Corporate/Listing & CoverageFocus on share price improvement and strategic options post-delisting (Q4 coverage) “Institutional analysts will not cover stocks < $1/OTC; reverse split not favored by shareholders” — CEO Constraint on coverage persists

Management Commentary

  • “We posted record year over year revenue for the 17th straight quarter… bolstered by continued and robust usage of our consumable PulseVet products, and continued growth and adoption of our TRUFORMA products” — Larry Heaton, CEO .
  • “International sales continue to grow, with sales up 32% compared to the first quarter of 2024… Gross margin… came in at 68% compared to 66% in the first quarter of 2024” .
  • “Based on the momentum… supported by the strength of our balance sheet, we believe we are well positioned to aggressively execute on our strategy to drive the accelerated adoption of our innovative portfolio on a global scale” — CEO .

Q&A Highlights

  • On options and compensation: “It would not be appropriate to change the strike price of options… we periodically issue option grants… employees look forward to building value” — CEO .
  • On marketing spend: “Our marketing costs are high as a percentage of revenue because we are essentially a startup with innovative products” — CEO .
  • On TRUVIEW monetization: “Near completion of the AI component and plan a full launch soon; monetized via subscription with additional charges for AI reports and pathologist reviews” — CEO .
  • On listing/coverage: “Institutional analysts will not cover a stock below $1 or on the OTC… shareholders are not in favor of a reverse split” — CEO .
  • CFO transition: Interim CFO Mike Zuehlke performing well; full-time hire not a priority to save costs .

Estimates Context

  • Revenue and EPS both missed S&P Global consensus: revenue $6.50M vs $7.30M estimate; EPS -$0.065 vs -$0.007 estimate; magnitude driven by non-cash impairment and softer capital/diagnostics contributions versus tough prior-year distributor comp * *.
  • Only one covering estimate for both revenue and EPS, indicating limited analyst coverage (EPS # of estimates = 1; Revenue # of estimates = 1)*.

Values with asterisk retrieved from S&P Global.

Key Takeaways for Investors

  • Consumables strength (PulseVet trodes) and TRUFORMA adoption underpin recurring revenue; monitor diagnostics order cadence to smooth lumpy distributor effects .
  • Gross margin remains structurally high at 68%, providing a path toward profitability as scale improves and capital placements translate into consumables pull-through .
  • The $55.8M non-cash impairment materially distorts GAAP EPS; focus on adjusted operating expenses ($13.2M, -9% YoY) and adjusted EBITDA (-$5.75M) for operational trend assessment .
  • Liquidity of $64.6M with no explicit guidance provides flexibility to invest in portfolio growth (e.g., VETIGEL, TRUFORMA assays) while weathering near-term revenue variability .
  • AI-enabled TRUVIEW monetization and automation investments can improve revenue quality and cost structure; watch timing of AI launch and adoption curve .
  • Limited analyst coverage/OTC trading status constrain investor base; management commentary suggests no near-term reverse split, keeping re-listing prospects dependent on operating improvements .
  • Near-term trading: expect sensitivity to diagnostics/capital order trajectories and additional product launches; medium-term thesis hinges on consumables growth, margin durability, and disciplined OpEx management .