CPS Technologies Posts Record Q1 Revenue, Returns to Profitability

Shares of CPS Technologies Corporation CPSH have declined 4.8% since reporting results for the first quarter of 2025. This compares against the S&P 500 index’s 1.5% growth over the same time frame. Over the past month, the stock has risen 9.6% compared with the S&P 500’s 12.4% growth.

Revenue & EPS Rebound

CPS Technologies posted a significant turnaround in its first quarter of 2025. Revenues reached a record $7.5 million, rising 27% year over year from $5.9 million despite the absence of any sales from its previously high-performing HybridTech Armor line. This performance was driven by robust demand for the company’s AlSiC (aluminum silicon carbide) and hermetic packaging products, along with increased manufacturing throughput, supported by the addition of a third production shift.

Gross profit increased to $1.2 million (16.4% margin) from $0.9 million (15.3% margin) a year ago, reflecting improved manufacturing efficiencies and the resolution of prior quality issues. Net income was just under $100,000, or 1 cent per share, reversing a net loss of approximately $140,000, or 1 cent per share, in the year-ago quarter.

CPS Technologies Corp. Price, Consensus and EPS Surprise

 

CPS Technologies Corp. price-consensus-eps-surprise-chart | CPS Technologies Corp. Quote

Business Metrics Reflect Operational Progress

The company's balance sheet was stable despite ongoing investments. Cash and equivalents declined to $1.9 million from $3.3 million at the start of the year, but CPSH noted this reflected working capital needs tied to revenue growth. Inventories and receivables increased to support higher sales, with trade accounts receivable rising to $6.3 million from $4.9 million in December 2024. Payables and accruals climbed modestly to $4.2 million from $4 million.

Importantly, CPS Technologies is now debt-free, following the final payoff of its debt in the first quarter. It maintains a healthy current ratio of 3.3, above the industry average of 2.4. The gross margin has room for improvement; the company previously achieved a 30% margin in 2023 and is aiming to regain higher profitability through operational improvements.

Management Emphasizes Resilience & Growth Strategy

CEO Brian Mackey and CFO Charles Griffith highlighted the strength of non-armor revenues and the growing demand for CPSH’s core products. They confirmed that customer diversification and market expansion, particularly in hermetic packaging and AlSiC components for electric trains and power modules, have helped offset the completed armor contract from 2024.

Management attributed the margin shortfall to lower yields resulting from onboarding newer third-shift staff. It anticipates further margin expansion as staff gains experience and additional initiatives, including internal process improvements and supply-chain optimizations, take hold. In the long term, the company aims to return to a gross margin of 20-25%.

Factors Supporting Headline Growth

The absence of HybridTech Armor revenues did not hinder top-line growth, underscoring rising demand in other segments. Notably, AlSiC products are being incorporated into infrastructure supporting wind power and high-voltage DC transmission systems, driven in part by growing power needs from artificial intelligence workloads. Management sees these remote and offshore applications as strong fits for AlSiC due to their durability and low-maintenance characteristics.

Hermetic packaging is also contributing to revenue expansion, and CPSH plans to begin using its new 5-axis machining capability for customer shipments this summer. This enhancement is expected to increase product margin capture and broaden addressable markets. The company estimates this segment alone to tap into a $50-million market opportunity.

Guidance & Outlook

While CPS Technologies did not issue formal financial guidance, executives voiced confidence in achieving record full-year revenues, based on the current backlog, manufacturing capacity and growing product demand. Management believes that margin and profitability improvements will accelerate in subsequent quarters as efficiency gains materialize and production scales further.

Other Developments

In product development, CPSH expanded its portfolio through six externally funded research programs, including five SBIR contracts and a NAVAIR project. These include Phase 2 projects for radiation shielding and thermal energy storage, and Phase 1 projects for fiber-reinforced aluminum (FRA) and artillery solutions. FRA, in particular, is being positioned for military vehicle weight reduction and broader aerospace uses.

However, one commercial HybridTech radiation shielding order was canceled in the quarter after the broader program it supported was terminated. CPS Technologies was compensated for work performed, and the company continues to develop radiation shielding under a $1.1-million DOE Phase 2 contract running through 2026. Despite this setback, CPSH reported growing market interest in its radiation shielding products, particularly for modular walls and glove boxes.

CPSH is also exploring new armor applications beyond naval contracts, including lightweight ballistic flooring for helicopters, which has passed structural and ballistic testing, and is now under review by OEMs.

In sum, CPS Technologies delivered a strong first-quarter recovery, demonstrating operational resilience and top-line growth without relying on its previous armor segment. While some execution risks remain, especially around staffing and margin restoration, the company’s strategic positioning across high-demand sectors points to a promising trajectory.

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