Executive Summary\n\n- Financially, Sonoma delivered Q3 2025 revenue of $3.564 million, up 13.6% year over year (YoY) and down 0.4% quarter over quarter (QoQ) from Q2 2025. Gross profit was $1.27 million, yielding a gross margin of 35.6%. Operating income was a loss of $1.031 million and net income stood at a loss of $0.928 million, or about a $0.63 per share loss on 1.464 million weighted shares. The YoY decline in profitability metrics reflects ongoing investments in the core HOCl portfolio against a small revenue base.\n\n- Profitability metrics remained negative, with EBITDA at $(0.998) million and an EBITDAR of approximately $(0.28) per dollar of revenue. Despite the ongoing losses, the company generated positive operating cash flow of $0.565 million and free cash flow of $0.563 million in the quarter. Cash at period end was $5.236 million, supporting liquidity in the near term. The current ratio was 3.34 and the quick ratio was 2.49, underscoring a solid shortâterm liquidity position given modest nearâterm cash needs.\n\n- The balance sheet shows meaningful accumulated deficits (retained earnings of $(197.03) million) and a relatively small stockholdersâ equity base of $4.87 million, but with low leverage reflected by total debt of $119 thousand and net debt of $(5.12) million after netting cash. Management commentary on strategic milestones was not included in the provided data, limiting the ability to quantify near-term catalysts. Overall, Sonoma remains a highârisk, smallâcap healthcare name with limited revenue scale but meaningful liquidity to pursue product commercialization and market expansion over the next several quarters.
Key Performance Indicators
Revenue
3.56M
QoQ: -0.42% | YoY:13.58%
Gross Profit
1.27M
35.63% margin
QoQ: -6.69% | YoY:-13.01%
Operating Income
-1.03M
QoQ: -21.29% | YoY:-22.16%
Net Income
-928.00K
QoQ: -52.13% | YoY:-7.16%
EPS
-0.63
QoQ: -6.78% | YoY:60.32%
Revenue Trend
Margin Analysis
Key Insights
Revenue: $3.564 million; YoY growth +13.58%; QoQ change -0.42%.\n- Gross Profit: $1.270 million; Gross margin 35.63%; YoY gross profit change -13.01%; QoQ change -6.69%.\n- Operating Income: -$1.031 million; Operating margin -28.93%; YoY change -22.16%; QoQ change -21.29%.\n- Net Income: -$0.928 million; Net margin -26.04%; YoY change -7.16%; QoQ change -52.13%.\n- EPS (diluted): -$0.63; YoY change +60.32%; QoQ change -6.78%.\n- EBITDA: -$0.998 million; EBITDA margin -28.00%; EBITDAR -$0.28 per revenue dollar.\n- Operating cash flow: $0.565 million; Free cash flow: $0.563 million; Cash at end of period: $5.236 million.\n- Balance sheet highlights: Total assets $13.668 million; Total current assets $12.380 million; Total current liabilities $3.703 million; Total debt $0.119 million; Net debt $(5.118) million. Retained earnings $(197.030) million; Accumulated other comprehensive loss $(4.554) million; Total stockholdersâ equity $4.870 million. Current ratio 3.34; Quick ratio 2.49; Cash ratio 1.414.\n- Efficiency and liquidity context: Revenue base is small, but the company maintains positive working capital and solid liquidity relative to nearâterm obligations; net losses persist, signaling ongoing investment needs to scale the HOCl portfolio.
Financial Highlights
Key Metrics (QQ3 2025 vs. QQ3 2024 and QQ2 2025)\n- Revenue: $3.564 million; YoY growth +13.58%; QoQ change -0.42%.\n- Gross Profit: $1.270 million; Gross margin 35.63%; YoY gross profit change -13.01%; QoQ change -6.69%.\n- Operating Income: -$1.031 million; Operating margin -28.93%; YoY change -22.16%; QoQ change -21.29%.\n- Net Income: -$0.928 million; Net margin -26.04%; YoY change -7.16%; QoQ change -52.13%.\n- EPS (diluted): -$0.63; YoY change +60.32%; QoQ change -6.78%.\n- EBITDA: -$0.998 million; EBITDA margin -28.00%; EBITDAR -$0.28 per revenue dollar.\n- Operating cash flow: $0.565 million; Free cash flow: $0.563 million; Cash at end of period: $5.236 million.\n- Balance sheet highlights: Total assets $13.668 million; Total current assets $12.380 million; Total current liabilities $3.703 million; Total debt $0.119 million; Net debt $(5.118) million. Retained earnings $(197.030) million; Accumulated other comprehensive loss $(4.554) million; Total stockholdersâ equity $4.870 million. Current ratio 3.34; Quick ratio 2.49; Cash ratio 1.414.\n- Efficiency and liquidity context: Revenue base is small, but the company maintains positive working capital and solid liquidity relative to nearâterm obligations; net losses persist, signaling ongoing investment needs to scale the HOCl portfolio.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.56M
13.58%
-0.42%
Gross Profit
1.27M
-13.01%
-6.69%
Operating Income
-1.03M
-22.16%
-21.29%
Net Income
-928.00K
-7.16%
-52.13%
EPS
-0.63
60.32%
-6.78%
Key Financial Ratios
currentRatio
3.34
grossProfitMargin
35.6%
operatingProfitMargin
-28.9%
netProfitMargin
-26%
returnOnAssets
-6.79%
returnOnEquity
-19.1%
debtEquityRatio
0.02
operatingCashFlowPerShare
$0.39
freeCashFlowPerShare
$0.39
priceToBookRatio
0.81
priceEarningsRatio
-1.06
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Transcript highlights not available in the provided data. The earnings transcript is empty; consequently, key management quotes and thematic commentary from an earnings call could not be extracted. For a complete view, please supply the QQ3 2025 earnings call transcript or a link to management commentary.
Transcript not available in dataset.
â Management
Transcript not available in dataset.
â Management
Forward Guidance
Forward Guidance and Outlook (qualitative assessment)\n- Management commentary was not provided in the data set. The forward outlook therefore relies on the quantified results and standard industry considerations for a micro-cap HOCl product line.\n- Growth catalysts to monitor: (1) Commercialization progress for Epicyn, Levicyn, Celacyn, and other HOCl-based portfolio products; (2) Expansion into animal health and dermatology segments; (3) International market penetration and partnerships to broaden the revenue base; (4) Operating expense discipline to convert top-line improvements into sustainable profitability.\n- Challenges and risks: The business remains heavily lossâmaking with a small revenue base, which amplifies the impact of operating leverage. Any delay in product adoption, regulatory hurdles, supply chain constraints, or pricing pressure could delay a return to profitability.\n- Assessment of achievability: Without explicit management targets in the dataset, the achievability of breakeven or profitability hinges on sustained revenue growth to a level that covers SG&A and R&D spends (trends observed: SG&A ~$1.87M and R&D ~$0.43M in QQ3 2025). Investors should monitor quarterly revenue progression, gross margin stability around midâ30%+ and any guidance on cost containment, manufacturing leverage, and potential partnerships.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
SNOA Focus
35.63%
-28.90%
-19.10%
-1.06%
CPHI
-47.20%
-98.60%
-17.10%
-9.13%
ACOR
87.80%
-9.09%
-15.10%
-52.40%
AKAN
-1.08%
-5.22%
3.45%
-5.00%
PTPI
81.80%
-1.48%
-71.20%
-4.18%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Investment Outlook: Sonoma operates in a highârisk, highâvariance microâcap segment with a narrow revenue base and ongoing losses, but maintains meaningful liquidity to support nearâterm strategic initiatives. The QQ3 2025 results show a modest YoY revenue uptick (YoY revenue +13.6%) and a solid gross margin (35.6%), accompanied by positive operating cash flow and free cash flow despite a continued net loss. The nearâterm equity story hinges on successful commercialization and scaling of the HOCl portfolio, improving operating leverage, and any partnering arrangements that can broaden the revenue base.\n\n- If Sonoma can translate revenue growth into sustained profitability, the stock could transition from a speculative position toward a valueâleaning microâcap with upside potential driven by HOCl adoption in wound care, dermatology, and animal health. However, given the current deficit position, limited scale, and lack of explicit guidance in the provided data, the investment case remains highly uncertain. Key monitorables for the next quarters include: (1) quarterly revenue trajectory and gross margin stability, (2) progress toward breakeven on an operating basis, (3) reduction of nonâcore cost burn or more efficient SG&A, (4) any strategic partnerships or licensing deals, (5) timing and visibility on new product launches, and (6) changes in cash runway or capital structure.
Key Investment Factors
Growth Potential
Limited but meaningful growth potential from expanding Sonomaâs HOCl wound care and dermatology product line, with possible international expansion and animal health applications; incremental revenue upside will likely require commercialization progress, new partnerships, or price/mix improvements.
Profitability Risk
Primary risks include continued quarterly net losses given a small revenue base, dependence on a limited product portfolio, potential regulatory and competitive pressures in wound care, and dependence on thirdâparty manufacturing and distribution; negative retained earnings indicate longâstanding cumulative losses.
Financial Position
Healthy but narrow liquidity runway with cash and equivalents of $5.236M and net debt of $(5.118)M, implying strong cash cushions relative to nearâterm obligations; current ratio 3.34 and gross margin ~35.6% indicate a viable but fragile operating base that must scale to achieve profitability.