Executive Summary
- Encision reported Q2 2025 revenue of $1.756 million with gross profit of $0.828 million and a gross margin of 47.2%. The quarter produced a net loss of $0.170 million and an EBITDA loss of $0.136 million, with operating income of −$0.159 million. Despite the negative bottom line, operating cash flow was positive at $0.075 million and free cash flow was $0.035 million, aided by a favorable working capital swing.
- The company exhibits an improving, but still tight, liquidity position and a modest cash balance of $0.230 million against total debt of $1.219 million. Net debt stood at roughly $0.989 million, yielding a debt ratio of 0.35 and a debt-to-capitalization of 0.417. The current ratio is 2.00, indicating short-term liquidity is adequate but not expansive.
- Profitability remains challenged by high operating expenses relative to scale, with SG&A and R&D totaling ~$0.831 million and ~$0.156 million respectively, pushing operating expenses to $0.987 million against gross profit of $0.828 million. The company’s net income and earnings per share remain negative, a condition that is not unusual for a small-cap medical device company at this scale but is a critical hurdle for near-term valuation upside.
- On a trailing basis, Encision’s gross margin (~47.2%) sits favorably versus several medical-device peers in the same band, yet profitability remains the primary overhang. The market valuation metrics show a negative P/E (~−6.28) and a price-to-book around 2.51, signaling a discounted equity value that reflects the earnings volatility and scale. Investors should monitor working capital dynamics, product adoption of AEM instruments, and any shifts in reimbursements or hospital capex cycles that affect instrument purchases and monitoring equipment uptake.
Key Performance Indicators
QoQ: -12.11% | YoY:-3.89%
QoQ: -660.70% | YoY:-2 748.63%
QoQ: -872.48% | YoY:-2 332.31%
QoQ: -852.63% | YoY:-2 283.33%
Key Insights
Revenue: $1.756m (Q2 2025) | YoY: −3.87%, QoQ: +7.63%
Gross Profit: $0.828m | Gross Margin: 47.20% | YoY: −3.89%, QoQ: −12.11%
Operating Income: −$0.159m | Margin: −9.05% | YoY: significantly worse, QoQ: −660.70%
EBITDA: −$0.136m | EBITDARatio: −7.77%
Net Income: −$0.170m | Net Margin: −9.70% | YoY: −2332.31%, QoQ: −872.48%
EPS (Diluted): −$0.0143 | Weighted Avg Shs Out: 11.875m
Cash Flow from Operations: $0.075m | Capex: −$0.0406m | Free Cash Flow: $0.0346m
Cash at E...
Financial Highlights
Revenue: $1.756m (Q2 2025) | YoY: −3.87%, QoQ: +7.63%
Gross Profit: $0.828m | Gross Margin: 47.20% | YoY: −3.89%, QoQ: −12.11%
Operating Income: −$0.159m | Margin: −9.05% | YoY: significantly worse, QoQ: −660.70%
EBITDA: −$0.136m | EBITDARatio: −7.77%
Net Income: −$0.170m | Net Margin: −9.70% | YoY: −2332.31%, QoQ: −872.48%
EPS (Diluted): −$0.0143 | Weighted Avg Shs Out: 11.875m
Cash Flow from Operations: $0.075m | Capex: −$0.0406m | Free Cash Flow: $0.0346m
Cash at End of Period: $0.230m | Total Debt: $1.219m | Net Debt: $0.989m
Current Assets: $2.282m | Total Assets: $3.523m | Current Liabilities: $1.140m | Total Liabilities: $1.821m | Stockholders’ Equity: $1.702m
Key liquidity ratios: Current 2.00x, Quick 0.98x, Cash 0.20x; Debt/Equity 0.72x; Debt Ratio 0.35x
Valuation snapshot: P/E (negative), P/B 2.51x, P/S 2.44x, EV/EBITDA negative driven by near-term losses
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
1.76M |
-3.87% |
7.63% |
| Gross Profit |
828.48K |
-3.89% |
-12.11% |
| Operating Income |
-158.92K |
-2 748.63% |
-660.70% |
| Net Income |
-170.26K |
-2 332.31% |
-872.48% |
| EPS |
-0.01 |
-2 283.33% |
-852.63% |
Key Financial Ratios
operatingProfitMargin
-9.05%
operatingCashFlowPerShare
$0.01
Management Commentary
Note: The dataset provided contains an earnings transcript field with no entries. No QQ2 2025 management call transcript was supplied in the materials. Consequently, no direct management quotes or thematic quotes from an earnings call are available in this analysis. Recommendation: source the company’s earnings call transcript (or press release transcript) to enrich this section with management sentiment on growth drivers, cost control measures, and near-term outlook.
Forward Guidance
No explicit quantitative forward guidance appears in the provided data for QQ2 2025. Given the revenue level and persistent operating losses, the near-term path likely hinges on: (1) stabilizing and potentially expanding gross margin through product mix and pricing of AEM instruments and monitors; (2) reducing operating expenses or achieving operating leverage as volumes scale; (3) managing working capital to improve cash conversion cycles; (4) capturing new adoption cycles in laparoscopic procedures and expanding clinical adoption of AEM EndoShield and related monitoring products. Our qualitative assessment suggests management’s focus should be on scaling AEM instrument sales, expanding service contracts or monitoring solutions, and optimizing international sales channels to improve revenue base. Key factors to monitor: quarterly gross margin trajectory, R&D/sales & marketing spend as a percent of revenue, working capital dynamics (inventory turns, receivables days), and any incremental capital expenditure to support new product lines or manufacturing improvements. If the company can drive stable top-line growth while maintaining opex discipline, a path to breakeven on operating income could emerge over the next several quarters.