CEA Industries Inc. Reports First Quarter 2025 Results
Rhea-AI Summary
Positive
- Revenue increased 203% year-over-year to $0.7 million
- Achieved gross profit of $39,000 vs loss of $154,000 in Q1 2024
- Net bookings increased to $1.0 million from $0.3 million year-over-year
- Strong balance sheet with $8.7 million cash and no debt
- Strategic acquisition of Fat Panda progressing, entering vape industry
Negative
- Net loss increased to $1.1 million from $0.9 million year-over-year
- Operating expenses increased 45% to $1.1 million
- Cash position decreased from $9.5M to $8.7M quarter-over-quarter
- Working capital decreased by $1.0 million during the quarter
Insights
CEA shows mixed Q1 results with revenue growth but continued losses; pending Fat Panda acquisition represents strategic pivot into vape industry.
CEA Industries' Q1 2025 results reveal a company in transition, with revenue increasing significantly to
Despite the revenue growth, CEA continues to operate at a loss. While gross profit improved to
The company's backlog stands at
Management's strategy focuses on a lean operating model with disciplined expense management, though this is somewhat contradicted by the rise in operating expenses. The company has implemented headcount reductions and eliminated product development costs to preserve capital.
The pending acquisition of Fat Panda represents a strategic pivot into the vape industry, moving away from their traditional business model. This acquisition appears to be central to the company's transformation strategy, though specific financial details about Fat Panda's performance are not disclosed beyond general statements about "consistent growth and strong margin profile."
While the revenue growth is encouraging, CEA's continued losses and decreasing cash position raise questions about long-term sustainability without successful integration of Fat Panda or additional capital infusion.
Louisville, Colorado, May 15, 2025 (GLOBE NEWSWIRE) -- CEA Industries Inc. (NASDAQ: CEAD, CEADW) (“CEA Industries” or the “Company”), is reporting results for the three months ended March 31, 2025.
First Quarter 2025 Financial Summary (in $ thousands, excl. margin items):
| Q1 2025 (unaudited) | Q4 2024 (unaudited) | Q1 2024 (unaudited) | ||||||||||
| Revenue | $ | 713 | $ | 417 | $ | 235 | ||||||
| Gross Profit (Loss) | $ | 39 | $ | (175 | ) | $ | (154 | ) | ||||
| Operating Expenses | $ | 1,113 | $ | 850 | $ | 769 | ||||||
| Net Income/(Loss) | $ | (1,069 | ) | $ | (1,019 | ) | $ | (917 | ) | |||
“We continue to uphold our lean operating model, emphasizing disciplined expense management and capital preservation as we support our pending acquisition and work through our remaining backlog,” said Tony McDonald, Chairman and CEO of CEA Industries. “Excluding acquisition-related costs, we minimized our operating expenses through headcount reductions, the elimination of product development costs and reduced advertising and marketing spend, with the goal of preserving our balance sheet and minimizing cash burn.”
“We are also making continued progress toward completing our acquisition of Fat Panda and remain enthusiastic about the strategic opportunity it presents. This transaction marks a significant milestone in our transformation strategy, providing a pathway into the high growth vape industry through Fat Panda’s established leadership, expansive retail presence, vertically integrated infrastructure, and experienced management team. Their consistent growth and strong margin profile positions us well to drive sustainable value creation. We look forward to sharing additional updates as we work toward closing the transaction.”
First Quarter 2025 Financial Results
Revenue in the first quarter of 2025 increased to
Net bookings in the first quarter of 2025 increased to
Gross profit in the first quarter of 2025 increased to
Operating expenses in the first quarter of 2025 were
Net loss in the first quarter of 2025 was
Cash and cash equivalents were
About CEA Industries Inc.
CEA Industries Inc. (www.ceaindustries.com) provides a suite of complementary and adjacent offerings to the controlled environment agriculture industry. The Company’s comprehensive solutions, when aligned with industry operators’ product and sales initiatives, support the development of the global ecosystem for indoor cultivation.
Forward Looking Statements
This press release may contain statements of a forward-looking nature relating to future events. These forward-looking statements are subject to the inherent uncertainties in predicting future results and conditions. These statements reflect our current beliefs, and a number of important factors could cause actual results to differ materially from those expressed in this press release, including the factors set forth in “Risk Factors” set forth in our annual and quarterly reports filed with the Securities and Exchange Commission (“SEC”), and subsequent filings with the SEC. Please refer to our SEC filings for a more detailed discussion of the risks and uncertainties associated with our business, including but not limited to the risks and uncertainties associated with our business prospects and the prospects of our existing and prospective customers; the inherent uncertainty of product development; regulatory, legislative and judicial developments, especially those related to changes in, and the enforcement of, cannabis laws; increasing competitive pressures in our industry; and relationships with our customers and suppliers. Except as required by the federal securities laws, we undertake no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise. The reference to CEA’s website has been provided as a convenience, and the information contained on such website is not incorporated by reference into this press release.
Non-GAAP Financial Measures
To supplement our financial results on U.S. generally accepted accounting principles (“GAAP”) basis, we use non-GAAP measures including net bookings and backlog, as well as other significant non-cash expenses such as stock-based compensation and depreciation expenses. We believe these non-GAAP measures are helpful in understanding our past performance and are intended to aid in evaluating our potential future results. The presentation of these non-GAAP measures should be considered in addition to our GAAP results and are not intended to be considered in isolation or as a substitute for financial information prepared or presented in accordance with GAAP. We believe these non-GAAP financial measures reflect an additional way to view aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business.
Investor Contact:
Sean Mansouri, CFA or Aaron D’Souza
Elevate IR
info@ceaindustries.com
(720) 330-2829
CEA Industries Inc.
Condensed Consolidated Balance Sheets
(in US Dollars except share numbers)
| March 31, | December 31, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Audited) | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and cash equivalents | $ | 8,707,353 | $ | 9,452,826 | ||||
| Accounts receivable, net | 56,844 | 13,041 | ||||||
| Contract assets, net | 234,328 | 234,328 | ||||||
| Inventory, net | 20,283 | 25,980 | ||||||
| Prepaid expenses and other | 179,258 | 368,068 | ||||||
| Total Current Assets | 9,198,066 | 10,094,243 | ||||||
| Noncurrent Assets | ||||||||
| Property and equipment, net | 4,566 | 5,698 | ||||||
| Intangible assets, net | 1,830 | 1,830 | ||||||
| Deposits | 14,747 | 14,747 | ||||||
| Operating lease right-of-use asset | 216,891 | 245,270 | ||||||
| Total Noncurrent Assets | 238,034 | 267,545 | ||||||
| TOTAL ASSETS | $ | 9,436,100 | $ | 10,361,788 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| LIABILITIES | ||||||||
| Current Liabilities | ||||||||
| Accounts payable and accrued liabilities | $ | 514,962 | $ | 550,477 | ||||
| Deferred revenue | 474,679 | 343,790 | ||||||
| Current portion of operating lease liability | 137,875 | 135,651 | ||||||
| Total Current Liabilities | 1,127,516 | 1,029,918 | ||||||
| Noncurrent Liabilities | ||||||||
| Operating lease liability, net of current portion | 101,314 | 134,147 | ||||||
| Total Noncurrent Liabilities | 101,314 | 134,147 | ||||||
| TOTAL LIABILITIES | 1,228,830 | 1,164,065 | ||||||
| Commitments and Contingencies (Note 9) | - | - | ||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Preferred stock, | - | - | ||||||
| Common stock, | 8 | 8 | ||||||
| Additional paid in capital | 49,612,075 | 49,533,950 | ||||||
| Accumulated deficit | (41,404,813 | ) | (40,336,235 | ) | ||||
| Total Shareholders’ Equity | 8,207,270 | 9,197,723 | ||||||
| TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 9,436,100 | $ | 10,361,788 | ||||
CEA Industries Inc.
Condensed Consolidated Statements of Operations
(in US Dollars except share numbers)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Revenue | $ | 713,460 | $ | 234,506 | ||||
| Cost of revenue | 674,173 | 388,881 | ||||||
| Gross profit (loss) | 39,287 | (154,375 | ) | |||||
| Operating expenses: | ||||||||
| Advertising and marketing expenses | 2,968 | 9,324 | ||||||
| Selling, general and administrative expenses | 1,110,156 | 760,110 | ||||||
| Total operating expenses | 1,113,124 | 769,434 | ||||||
| Operating loss | (1,073,837 | ) | (923,809 | ) | ||||
| Other income : | ||||||||
| Interest income, net | 5,259 | 7,206 | ||||||
| Total other income | 5,259 | 7,206 | ||||||
| Loss before provision for income taxes | (1,068,578 | ) | (916,603 | ) | ||||
| Income taxes | - | - | ||||||
| Net loss | $ | (1,068,578 | ) | $ | (916,603 | ) | ||
| Loss per common share – basic and diluted | $ | (1.33 | ) | $ | (1.34 | ) | ||
| Weighted average number of common shares outstanding, basic and diluted | 802,229 | 684,328 | ||||||
CEA Industries Inc.
Condensed Consolidated Statements of Cash Flows
(in US Dollars except share numbers)
(Unaudited)
| For the Three Months Ended March 31, | ||||||||
| 2025 | 2024 | |||||||
| Cash Flows From Operating Activities: | ||||||||
| Net loss | $ | (1,068,578 | ) | $ | (916,603 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation and intangible asset amortization expense | 1,132 | 6,914 | ||||||
| Share-based compensation | 78,125 | 76,969 | ||||||
| Provision for doubtful accounts (bad debt recovery) | (33 | ) | (34,566 | ) | ||||
| Provision for excess and obsolete inventory | (14,847 | ) | 38,360 | |||||
| Loss on disposal of assets | - | 12,625 | ||||||
| Operating lease expense | 28,379 | 27,317 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (43,770 | ) | 33,096 | |||||
| Inventory | 20,544 | 12,151 | ||||||
| Prepaid expenses and other | 188,811 | 85,600 | ||||||
| Accounts payable and accrued liabilities | (35,515 | ) | (262,849 | ) | ||||
| Deferred revenue | 130,888 | 40,156 | ||||||
| Operating lease liability, net | (30,609 | ) | (28,585 | ) | ||||
| Net cash used in operating activities | (745,473 | ) | (909,415 | ) | ||||
| Cash Flows From Investing Activities | ||||||||
| Net cash provided by investing activities | - | - | ||||||
| Cash Flows From Financing Activities | ||||||||
| Net cash provided by financing activities | - | - | ||||||
| Net change in cash and cash equivalents | (745,473 | ) | (909,415 | ) | ||||
| Cash and cash equivalents, beginning of period | 9,452,826 | 12,508,251 | ||||||
| Cash and cash equivalents, end of period | $ | 8,707,353 | $ | 11,598,836 | ||||
| Supplemental cash flow information: | ||||||||
| Interest paid | $ | - | $ | - | ||||
| Income taxes paid | $ | - | $ | - | ||||
FAQ
What were CEA Industries (CEAD) Q1 2025 earnings results?
How much did CEAD's revenue grow in Q1 2025 compared to Q1 2024?
What is CEA Industries' (CEAD) cash position as of March 2025?
What acquisition is CEA Industries (CEAD) currently pursuing?
How did CEAD's operating expenses change in Q1 2025?
