Nephros Announces Strong Third Quarter Financial Results; Achieving Highest Level of Programmatic Sales in Company History

Rhea-AI Summary

Nephros (Nasdaq: NEPH) reported third-quarter results for the period ended September 30, 2025, with Q3 net revenue $4.8M (up 35% year-over-year) and Q3 net income $0.3M (up 84% year-over-year), marking the company’s fourth consecutive profitable quarter.

For the nine months ended Sept 30, 2025, net revenue was $14.1M (up 37% YTD) and net income was $1.1M versus a $0.3M loss in prior year; Adjusted EBITDA improved to $1.44M YTD. The company reported cash and equivalents $5.2M and zero debt. Programmatic revenue showed strong growth (Q3 +51%; YTD +35%) and a new PFAS filtration product launched in early October.

Positive

• Q3 net revenue +35% to $4.8M
• Q3 net income +84% to $337,000
• Nine-month revenue +37% to $14.1M
• Nine-month net income turned to $1.1M from ($275,000)
• Adjusted EBITDA YTD +$1.37M to $1.44M
• Programmatic revenue Q3 +51% (YTD +35%)
• Cash and equivalents $5.2M; zero debt

Negative

• Q3 selling, general & administrative expenses +30%
• Q3 research & development expenses +80%
• YTD non-cash stock-based compensation increased to $217,000

Insights

Senior Water Tech Financial Analyst

Nephros shows clear operational leverage: accelerating revenue and sustained profitability driven by programmatic sales and a new product launch.

Revenue rose to $4.8 million in Q3, up 35%, while nine‑month revenue reached $14.1 million, up 37%; core programmatic revenue grew 51% year‑over‑year in the quarter. These results convert higher top‑line into improved margins and cash: Q3 gross margin stayed at 61%, nine‑month gross margin improved to 63%, adjusted EBITDA rose to $418,000 for the quarter and $1.4 million year‑to‑date, and cash increased to $5.2 million with zero debt. Together, these figures describe a business where recurring programmatic sales and services now drive scalable profitability rather than one‑off transactions.

Key dependencies and risks remain explicit: continued growth relies on sustaining programmatic reorder rates, service revenue expansion, and successful commercialization of the new PFAS filtration product launched in early October. Cost drivers such as higher sales commissions, bonus accruals, and R&D spending reduced operating leverage relative to gross margin gains; those expenses rose and should be monitored to ensure operating margins continue to improve. The company’s statements tie much of the improvement to customer‑focused activities (webinars, on‑site training, field installs), so execution consistency across active sites matters materially.

Concrete items to watch over the next 2–4 quarters include: continued programmatic revenue growth and churn metrics, the revenue contribution and adoption rate of the new PFAS filtration solution (launched early October), trends in service revenue and active site counts, and quarterly changes in sales commission and bonus accruals that drove SG&A higher. Monitoring adjusted EBITDA reconciliation items (notably non‑cash stock compensation and inventory impairments) will clarify underlying cash profitability in upcoming filings.

Third-Quarter Net Revenue of $4.8 million; Robust Growth Drives 35% Increase in Net Revenue and Fourth Consecutive Quarter of Profitability

SOUTH ORANGE, NJ., Nov. 06, 2025 (GLOBE NEWSWIRE) -- Nephros, Inc. (Nasdaq: NEPH), a leading water technology company providing filtration solutions to the medical and commercial markets, today announced financial results for the third quarter ended September 30, 2025.

Financial Highlights

Net revenue increased 35% to $4.8 million compared to $3.5 million in the third quarter of 2024
Net income increased 84% to $337,000, compared to $183,000 in the third quarter of 2024
Adjusted EBITDA increased 42% to $418,000, compared to $295,000 in the third quarter of 2024

For the nine months ended September 30, 2025:

Net revenue increased 37% to $14.1 million, compared to $10.3 million in the same period of 2024
Net income was $1.1 million, compared to a net loss of ($275,000) in the same period of 2024
Adjusted EBITDA was $1.4 million, compared to $67,000 in the same period of 2024

“Q3 2025 marks another powerful milestone—delivering not only continued profitability but achieving the highest level of programmatic sales in company history,” said Robert Banks, President and Chief Executive Officer of Nephros. “This performance is a direct result of our strategic focus on the execution of customer-centered initiatives. By expanding our series of educational webinars, on-site training, and field installation and replacement capabilities, we helped facilities achieve stronger results from their water treatment programs. Collectively, these efforts created sustainable value for both our customers and company.”

“It’s an energizing time at Nephros as we are also seeing the impact of our recent investments in innovation,” Banks continued. “In the third quarter, we finalized development and market preparation for our new PFAS filtration solution, which officially launched in early October. This latest release positions Nephros to expand into new markets where water quality is critical and regulatory standards drive action. In parallel, the same customer-centered initiatives that strengthened our programmatic business also supported expansion in the number of active sites across all key segments—infection control, dialysis, and commercial. These results provide further evidence that our approach resonates with customers seeking reliable support, who value both product quality and consistent high performance.”

Mr. Banks concluded, “With strong cash reserves, zero debt, and a robust innovation pipeline, we remain confident that Nephros is well-positioned to sustain growth, broaden our market reach, and deliver durable value in the quarters ahead.”

Financial Performance for the Quarter Ended September 30, 2025
Net revenue for the three months ended September 30, 2025, and 2024 was $4.8 million and $3.5 million, respectively, an increase of 35%. Our core programmatic revenue grew by 51% over the same period in 2024. The increase in programmatic sales reflects strong reorders, a number of new active sites and significant growth in our service revenue.

Cost of goods sold for the third quarter of 2025 was $1.9 million, compared with $1.4 million in the third quarter of 2024, an increase of 35%. Gross margin for the third quarter of 2025 was 61%, consistent with 61% in the third quarter of 2024.

Selling, general and administrative expenses for the third quarter of 2025 were approximately $2.2 million, compared with $1.7 million in 2024, an increase of 30% due to higher sales commissions resulting from increased revenue, and higher accrual for employee bonuses.

Research and development expenses were approximately $0.3 million for the third quarter of 2025, compared with $0.2 million reported in the third quarter of 2024, an increase of 80% due to higher accrual for employee bonuses and higher salary expense.

Depreciation and amortization expenses were approximately $34,000 for the third quarter of 2025, consistent with approximately $34,000 in the third quarter of 2024.

As a result of the improved sales, net income for the third quarter of 2025 was $0.3 million, compared with $0.2 million during the same period in 2024, marking four consecutive quarters of net income in the Company’s history.

Adjusted EBITDA for the third quarter 2025 was approximately $0.4 million, compared with approximately $0.3 million in the third quarter of 2024.

Financial Performance for the Nine Months Ended September 30, 2025
Net revenue for the nine months ended September 30, 2025, and 2024 was $14.1 million, and $10.3 million respectively, an increase of 37%. This increase was primarily driven by increased revenue in both programmatic and emergency response. Our core programmatic revenue grew by 35% over the same period in 2024. The increase in programmatic sales reflects strong reorders, and a number of new active sites. We also saw significant growth in our service revenue.

Cost of goods sold for the nine months ending September 30, 2025, and 2024 was $5.2 million and $4 million, respectively, an increase of 28%. Gross margin for the nine months ended September 30, 2025, was 63%, compared with 61% during the same period in 2024. The increase in gross margin was primarily driven by lower product costs resulting from a more favorable product mix and a reduction in inventory reserve adjustments.

Selling, general and administrative expenses for the nine months ended September 30, 2025, and 2024 were approximately $6.7 million and $5.8 million, respectively, an increase of 15% primarily driven by higher sales commission expense, increased employee bonus accruals, and higher stock-based compensation expense.

Research and development expenses for the nine months ending September 30, 2025, and 2024 were $0.9 million and $0.7 million, respectively, an increase of 44% primarily due to higher accrual for employee bonuses and higher salary expense.

Depreciation and amortization expenses for the nine months ending September 30, 2025, and 2024 were approximately $108,000, and $101,000 respectively.

As a result of the improved sales and gross margins, net income for the nine months ending September 30, 2025, was $1.1 million compared to a net loss of ($0.3 million) during the same period in 2024.

Adjusted EBITDA for the nine months ending September 30, 2025, was approximately $1.4 million, compared with approximately $0.1 million in the same period of 2024.

As of September 30, 2025, Nephros had cash and cash equivalents of approximately $5.2 million, compared to $3.8 million as of December 31, 2024, and remains debt free.

Adjusted EBITDA Definition and Reconciliation to GAAP Financial Measures
Adjusted EBITDA is calculated by taking net income (loss) calculated in accordance with generally accepted accounting principles (“GAAP”) and excluding all interest-related expenses and income, tax-related expenses and income, non-recurring expenses and income, and non-cash items, including depreciation, amortization, non-cash inventory write-offs, and non-cash compensation. The following tables present a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for the third quarter and year-to-date period of the 2025 fiscal year:

(unaudited)
	Three Months Ended September 30,
	2025		2024
	(in $ thousands)
Net income	337		183
Adjustments:
Depreciation of property and equipment	12		12
Amortization of other assets	22		21
Interest expense	-		-
Interest income	(41	)	(20	)
Income taxes	3		-
Non-cash stock-based compensation	70		65
Non-cash inventory impairments	15		34
Adjusted EBITDA Income	418		295
(unaudited)
	Nine Months Ended September 30,
	2025		2024
	(in $ thousands)
Net Income (loss)	1,132		(275	)
Adjustments:
Depreciation of property and equipment	42		34
Amortization of other assets	65		68
Interest expense	1		1
Interest income	(85	)	(66	)
Income taxes	12		-
Non-cash stock-based compensation	217		91
Non-cash inventory impairments	56		214
Adjusted EBITDA Income	1,440		67

Adjusted EBITDA Income (loss)

Nephros believes that Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to Nephros’ financial condition and results of operations. Management does not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recognized in Nephros’ financial statements. In addition, Adjusted EBITDA is subject to inherent limitations as it reflects the exercise of judgments by management about which expenses and income are excluded or included in determining Adjusted EBITDA. To compensate for these limitations, management presents Adjusted EBITDA in connection with net income (loss), the most directly comparable GAAP financial measure. Nephros urges investors to review the reconciliation of Adjusted EBITDA to net income (loss) and not to rely on any single financial measure to evaluate the business.

About Nephros
Nephros is committed to improving the human relationship with water through leading, accessible technology. We provide innovative water filtration products and services, along with water-quality education, as part of an integrated approach to water safety. Nephros goods serve the needs of customers within healthcare and commercial markets, offering both proactive and emergency solutions for water management.

For more information about Nephros, please visit nephros.com.

Forward-Looking Statements
This release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding Nephros’ expected future revenue growth and the timing of such growth, the extent to which Nephros’ customer installation and replacement programs will lead to increased product reorders and revenue, the extent to which Nephros’ operational activities and product innovations will lead to revenue growth, Nephros’ ability to continue realizing net income from its operations, the effect of new regulations on future revenue growth, the expected competitive advantages and anticipated impact of new product offerings, and other statements that are not historical facts, including statements that may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including Nephros’ ability to further develop its sales organization and realize increased revenues, the extent to which financial results based on emergency response sales can be outside Nephros’ control, the extent to which U.S. tariffs may increase our expenses, inflationary factors and other economic and competitive conditions, the availability of capital when needed, dependence on third-party manufacturers and researchers, and regulatory reforms. These and other risks and uncertainties are detailed in Nephros’ reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024, which it may update in Part II, Item 1A – Risk Factors in its Quarterly Reports on Form 10-Q that it has filed or will file hereafter. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this release, and Nephros does not undertake any responsibility to update any forward-looking statements that it makes, except as may be required by law.

Investor Relations Contacts:
Kirin Smith, President
PCG Advisory, Inc.
(646) 823-8656
ksmith@pcgadvisory.com

Robert Banks, CEO
Nephros, Inc.
(201) 343-5202 x110
robert.banks@nephros.com

NEPHROS, INC.
BALANCE SHEETS
(In thousands, except share and per share amounts)
(Unaudited)
ASSETS		September 30, 2025				December 31, 2024
Current assets:
Cash and cash equivalents		$	5,171			$	3,760
Accounts receivable, net			2,661				1,781
Inventory			2,738				2,615
Prepaid expenses and other current assets			136				142
Total current assets			10,706				8,298
Property and equipment, net			119				161
Lease right-use-of assets			1,112				1,377
Intangible assets, net			326				349
Goodwill			759				759
License and supply agreement, net			175				216
Other assets			50				50
TOTAL ASSETS		$	13,247			$	11,210
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable			936				649
Accrued expenses			1,151				565
Current portion of lease liabilities			380				348
Total current liabilities			2,467				1,562
Lease liabilities, net of current portion			774				1,063
TOTAL LIABILITIES			3,241				2,625
STOCKHOLDERS' EQUITY:
Preferred stock, $.001 par value; 5,000,000 shares authorized at September 30, 2025 and December 31, 2024; no shares issued and outstanding September 30, 2025 and December 31, 2024.			-				-
Common stock, $.001 par value; 40,000,000 shares authorized at September 30, 2025 and December 31, 2024; 10,626,683 and 10,544,691 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively.			11				11
Additional paid-in capital			153,195				152,906
Accumulated deficit			(143,200	)			(144,332	)
TOTAL STOCKHOLDERS' EQUITY			10,006				8,585
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	13,247			$	11,210

NEPHROS, INC.
STATEMENTS OF OPERATIONS
(In thousands, except share and per share amounts)
(Unaudited)
		Three Months Ended Sep 30,								Nine Months Ended September 30,
		2025				2024				2025				2024
Net revenue:
Product revenues		$	4,596			$	3,472			$	13,613			$	10,186
Service, royalty and other revenues			168				46				447				106
Total net revenues			4,764				3,518				14,060				10,292
Cost of goods sold			1,849				1,369				5,196				4,044
Gross margin			2,915				2,149				8,864				6,248
Operating expenses:
Selling, general and administrative			2,229				1,721				6,684				5,804
Research and development			338				188				944				654
Depreciation and amortization			34				34				108				101
Total operating expenses			2,601				1,943				7,736				6,559
Operating income (loss)			314				206				1,128				(311	)
Other (expense) income:
Interest expense			-				-				(1	)			(1	)
Interest income			41				20				85				66
Other income (expense), net			(15	)			(43	)			(68	)			(29	)
Total other expense:			26				(23	)			16				36
Income (loss) before income taxes			340				183				1,144				(275	)
Income tax expense			(3	)			-				(12	)			-
Net income (loss)		$	337			$	183			$	1,132			$	(275	)
Net income (loss) per common share, basic		$	0.03			$	0.02			$	0.11			$	(0.03	)
Net income (loss) per common share, diluted		$	0.03			$	0.02			$	0.10			$	(0.03	)
Weighted average common shares outstanding, basic			10,612,012				10,544,139				10,604,300				10,518,742
Weighted average common shares outstanding, diluted			11,040,925				10,580,906				10,846,477				10,518,742

FAQ

What were Nephros (NEPH) Q3 2025 revenue and net income figures?

Nephros reported Q3 2025 net revenue $4.8M and Q3 net income $337,000.

How much did Nephros programmatic sales grow in Q3 2025 for NEPH?

Core programmatic revenue grew 51% in Q3 2025 versus Q3 2024.

What is Nephros’ nine-month 2025 financial performance (NEPH)?

For the nine months ended Sept 30, 2025, revenue was $14.1M (up 37%) and net income $1.1M.

Did Nephros (NEPH) report positive Adjusted EBITDA in 2025?

Yes; Adjusted EBITDA was $418,000 for Q3 2025 and $1.44M for the nine months ended Sept 30, 2025.

What product or commercial progress did Nephros announce in October 2025?

Nephros launched a new PFAS filtration solution in early October 2025 after completing development and market preparation in Q3.

What is Nephros’ cash and debt position as of Sept 30, 2025 (NEPH)?

As of Sept 30, 2025, Nephros had $5.2M cash and cash equivalents and reported zero debt.