Escalon Medical Corp (ESMC) Q4 2024 Earnings Report

Q4 2024 for Escalon Medical Corp (ESMC) demonstrates resilient top-line growth and margin stability, accompanied by a positive but modest bottom-line contribution. Revenue for the quarter rose to 3.47 million, up 10.7% year-over-year and 28.8% quarter-over-quarter, with gross margin at 42.4% and an EBIT/EBITDA-positive profile (EBITDA $157k; operating income $138k; net income $134k; EPS $0.0164). These results signal improving profitability on a quarterly basis despite the company’s small scale and OTC listing.

However, cash flow remains a material constraint. Cash flow from operations was negative at about -$339.9k and free cash flow was -$349.1k, driven primarily by working capital dynamics (change in working capital -$532k; accounts receivable -$728k; inventory +$192k; accounts payable +$239k). The company ended the period with cash and cash equivalents of roughly $209k (total cash at end $465k) and a total debt load of $524.7k, yielding net debt of about $315.7k. The balance sheet shows solid liquidity metrics for a micro-cap (current ratio ~1.65; quick ratio ~1.04) but a very modest cash buffer that leaves sensitivity to receivables collection cycles and inventory swings.

Looking ahead, Escalon has no explicit forward guidance in the provided data. The trajectory suggests continued gross-margin resilience and potential earnings stability, but the cash-flow discipline and working-capital optimization will be critical to fund ongoing operations and any growth initiatives. Relative valuation against peers appears favorable on earnings multiples and enterprise-value metrics, yet the market will closely watch cash-generation ability and the ability to scale distribution channels and product adoption in ophthalmology. Investors should monitor working capital normalization, debt levels, and any strategic actions to expand the distributor network and accelerate revenue growth.