Exchange: NASDAQ | Sector: Technology | Industry: Hardware Equipment Parts
Q3 2025
Published: Feb 4, 2025
Earnings Highlights
Revenue of $62.84M up 17.5% year-over-year
EPS of $-0.31 decreased by 179.5% from previous year
Gross margin of 63.3%
Net income of -1.68M
"Our focus on expanding our market presence within the biopharmaceutical sector has been beneficial. We've witnessed strong uptake of our automated systems, which is reflected in our revenue growth." - CEO, Mesa Laboratories
Mesa Laboratories Inc reported a revenue of $62.84 million for Q3 2025, marking a significant year-over-year increase of 17.52% and a quarter-over-quarter rise of 8.66%. However, despite this encouraging revenue growth, the company faced substantial profitability challenges, posting a net loss of $1.68 million, which translates to an EPS of -$0.31. Management acknowledged these hurdles during the earnings call, indicating that operational inefficiencies and increased costs have been critical factors in impacting overall profitability.
Despite the challenges, the company's strong revenue growth showcases its resilience and highlights the effectiveness of its strategic initiatives in expanding market share, particularly in the biopharmaceutical and sterilization segments. Mesa remains focused on improving operational efficiency and navigating through its current financial difficulties while enhancing value for shareholders in the long term.
Key Performance Indicators
Revenue
62.84M
QoQ: 8.66% | YoY:17.52%
Gross Profit
39.75M
63.26% margin
QoQ: 12.13% | YoY:19.02%
Operating Income
5.78M
QoQ: 64.74% | YoY:8 725.37%
Net Income
-1.68M
QoQ: -148.89% | YoY:-179.21%
EPS
-0.31
QoQ: -149.21% | YoY:-179.49%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $62.84 million (YoY: 17.52%, QoQ: 8.66%)
Gross Profit: $39.75 million (YoY: 19.02%, QoQ: 12.13%)
Operating Income: $5.78 million (YoY: 8,725.37%, QoQ: 64.74%)
Net Income: -$1.68 million (YoY: -179.21%, QoQ: -148.89%)
Operating Expenses: $33.98 million
Financial Highlights
Revenue Metrics:
- Revenue: $62.84 million (YoY: 17.52%, QoQ: 8.66%)
- Gross Profit: $39.75 million (YoY: 19.02%, QoQ: 12.13%)
- Operating Income: $5.78 million (YoY: 8,725.37%, QoQ: 64.74%)
- Net Income: -$1.68 million (YoY: -179.21%, QoQ: -148.89%)
Operational Expenses:
- Operating Expenses: $33.98 million
- Research and Development Expenses: $5.05 million
- Selling and Marketing Expenses: $10.45 million
Liquidity Ratios:
- Current Ratio: 0.711
- Quick Ratio: 0.531
- Cash at End of Period: $30.96 million
Management noted the importance of controlling operational costs to improve profitability while continuing investments in R&D to drive future growth.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
62.84M
17.52%
8.66%
Gross Profit
39.75M
19.02%
12.13%
Operating Income
5.78M
8 725.37%
64.74%
Net Income
-1.68M
-179.21%
-148.89%
EPS
-0.31
-179.49%
-149.21%
Key Financial Ratios
currentRatio
0.71
grossProfitMargin
63.3%
operatingProfitMargin
9.2%
netProfitMargin
-2.67%
returnOnAssets
-0.38%
returnOnEquity
-1.08%
debtEquityRatio
1.36
operatingCashFlowPerShare
$3.4
freeCashFlowPerShare
$3.25
dividendPayoutRatio
-51.8%
priceToBookRatio
4.61
priceEarningsRatio
-106.79
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management highlighted several key themes during the recent earnings call:
1. Strategic Initiatives: "Our focus on expanding our market presence within the biopharmaceutical sector has been beneficial. We've witnessed strong uptake of our automated systems, which is reflected in our revenue growth."
2. Operational Challenges: "While revenue growth is promising, we need to address the operational inefficiencies that have led to increased costs, which we recognize impacted our profitability this quarter."
3. Future Outlook: "We are committed to improving our production processes and enhancing our service delivery. This will be crucial for us to improve margins going forward."
Our focus on expanding our market presence within the biopharmaceutical sector has been beneficial. We've witnessed strong uptake of our automated systems, which is reflected in our revenue growth.
â CEO, Mesa Laboratories
While revenue growth is promising, we need to address the operational inefficiencies that have led to increased costs, which we recognize impacted our profitability this quarter.
â CFO, Mesa Laboratories
Forward Guidance
Looking ahead, management has guided for continued revenue growth but expects ongoing pressure on profitability due to rising costs and operational inefficiencies. Key targets moving forward include:
- Aiming for revenue growth between 15-20% for the next quarter.
- Expecting to reduce operating expenses by 10% over the next fiscal year through strategic cost control measures.
Investors should monitor the company's efforts in improving operational efficiency and the impact of ongoing cost pressures on profitability metrics.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
MLAB Focus
63.26%
9.20%
-1.08%
-106.79%
NOVT
44.70%
13.30%
2.59%
82.66%
ITRI
34.10%
12.00%
5.78%
15.41%
FTV
60.00%
19.30%
2.10%
31.20%
VPG
40.00%
5.07%
-0.41%
-62.52%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Despite the challenging profitability metrics this quarter, Mesa Laboratories' strong revenue growth indicates potential for recovery and improvement. Investors should focus on the company's ability to tackle operational inefficiencies and maintain the upward trajectory in revenue. Monitoring the implementation of cost control measures and improvements in operational efficiency will be key factors in determining the long-term investment thesis.
Key Investment Factors
Growth Potential
Mesa Laboratories continues to show solid revenue growth driven by demand in its biopharmaceutical and calibration segments. The company aims to enhance operational efficiency to leverage this growth potential further.
Profitability Risk
Significant operational inefficiencies and rising costs have impacted profitability. Additionally, reliance on specific markets may expose the company to sector-specific risks.
Financial Position
Mesa's balance sheet remains solid with a current ratio of 0.711, although long-term debt relative to equity indicates moderate leverage, posing potential risks if operating conditions do not improve.
SWOT Analysis
Strengths
Strong revenue growth of 17.52% YoY.
Diverse product offerings across multiple segments.
Weaknesses
Negative net income indicating profitability issues.
High operational expenses reducing overall margins.
Opportunities
Growing demand in biopharmaceutical and calibration markets.
Potential for margin improvement through efficiency gains.
Threats
Rising operational costs impacting profitability.
Dependency on specific market segments could expose the company to instability.