EPS of $-0.02 decreased by 351.9% from previous year
Gross margin of 38.9%
Net income of -23.93M
""Our TRUFORMA platform is designed to provide results that veterinarians need quickly and effectively, helping to meet the growing demand in companion animal diagnostics," said CEO Larry Heaton during the earnings call." - Larry Heaton
Zomedica Corp reported revenue of $6.13 million in Q2 2025, reflecting a YoY growth of 1.84% but a slight QoQ decrease of 2.09%. The company's gross profit margin has significantly declined to 38.9%, down from nearly 66% in the prior year, highlighting challenges in maintaining pricing power amidst rising costs and competitive pressures in the specialty drug manufacturing market. Management emphasized the importance of the TRUFORMA diagnostic platform as a strategic driver for future growth, particularly amid expanding market opportunities for veterinary care.
However, despite revenue growth, Zomedica posted a net loss of $23.93 million, showcasing deteriorating profitability as reflected in the negative earnings per share (EPS) of -$0.0244. Increased operational expenditures, especially in general and administrative costs, have conversely impacted the bottom line, prompting management to explore further operational efficiencies. Investors should closely monitor upcoming product launches and strategic partnerships, as these could influence Zomedica’s financial recovery trajectory.
Key Performance Indicators
Revenue
6.13M
QoQ: -2.09% | YoY:1.84%
Gross Profit
2.39M
38.90% margin
QoQ: -42.07% | YoY:-41.08%
Operating Income
-9.04M
QoQ: 12.93% | YoY:-34.13%
Net Income
-23.93M
QoQ: -161.26% | YoY:-355.92%
EPS
-0.02
QoQ: -162.37% | YoY:-351.85%
Revenue Trend
Margin Analysis
Key Insights
Q2 2025 Revenue: $6.13 million, up 1.84% YoY, down 2.09% QoQ.
Gross Profit: $2.39 million, down 41.08% YoY.
Operating Income: Loss of $9.04 million, down 34.13% YoY but showing a 12.93% improvement QoQ.
Net Income: Loss of $23.93 million, with a 355.92% decline YoY.
Total Assets: $219.88 million with a current ratio of 11.39, indicating strong short-term liquidity.
Financial Highlights
Revenue Performance:
- Q2 2025 Revenue: $6.13 million, up 1.84% YoY, down 2.09% QoQ.
Profitability:
- Gross Profit: $2.39 million, down 41.08% YoY.
- Operating Income: Loss of $9.04 million, down 34.13% YoY but showing a 12.93% improvement QoQ.
- Net Income: Loss of $23.93 million, with a 355.92% decline YoY.
Balance Sheet Health:
- Total Assets: $219.88 million with a current ratio of 11.39, indicating strong short-term liquidity.
- Cash and Short-Term Investments: $79.51 million, indicating ample liquidity to support operations.
Cash Flow:
- Cash Used in Operating Activities: -$6.62 million, reflecting capital draining challenges but also the investment in growth initiatives. Free cash flow stands at -$7.86 million.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
6.13M
1.84%
-2.09%
Gross Profit
2.39M
-41.08%
-42.07%
Operating Income
-9.04M
-34.13%
12.93%
Net Income
-23.93M
-355.92%
-161.26%
EPS
-0.02
-351.85%
-162.37%
Key Financial Ratios
currentRatio
11.39
grossProfitMargin
38.9%
operatingProfitMargin
-147.5%
netProfitMargin
-390%
returnOnAssets
-10.9%
returnOnEquity
-11.5%
debtEquityRatio
0.01
operatingCashFlowPerShare
$-0.01
freeCashFlowPerShare
$-0.01
priceToBookRatio
0.69
priceEarningsRatio
-1.5
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Market Position & Strategy:
Management expressed confidence in the TRUFORMA platform's potential to scale and meet the increasing demand for rapid diagnostic solutions in veterinary care. Projects linked to TRUFORMA are expected to capture a significant market share in the upcoming quarters.
Cost Management:
"We are actively seeking avenues to streamline our operational expenditures and bring efficiency to our high-cost structure," stated Zomedica’s CFO during the earnings call, reflecting the need for cost optimization given the current operational losses.
Future Outlook:
Management indicated that new product launches scheduled for later this year could enhance revenue diversification and stabilize margins, conveying optimism surrounding their collaborations with innovative partners in the biotech space.
"Our TRUFORMA platform is designed to provide results that veterinarians need quickly and effectively, helping to meet the growing demand in companion animal diagnostics," said CEO Larry Heaton during the earnings call.
— Larry Heaton
"We recognize the current strains on our margins; however, we are committed to re-establishing profitability through strategic market engagement and cost initiatives," stated CFO Steve M. Smith.
— Steve M. Smith
Forward Guidance
Management anticipates steady revenue growth as the adoption of TRUFORMA diagnostics accelerates. They project revenues to grow approximately 10% in the coming quarters, contingent upon successful market penetration and product acceptance. Also, Zomedica aims to improve its gross profit margin through cost-control measures and enhanced operational efficiencies. Investors are encouraged to monitor product launch timelines and market reaction to upcoming veterinary health solutions as indicators of future performance.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ZOM Focus
38.90%
-1.48%
-11.50%
-1.50%
TLRY
29.00%
-20.00%
-2.46%
-3.40%
ACB
52.00%
-2.95%
-2.22%
-9.03%
CGC
34.70%
-72.90%
-25.20%
-1.10%
HEXO
-24.70%
-1.23%
0.28%
31.66%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Investors should consider Zomedica as a long-term growth prospect, leveraging its unique position in the veterinary diagnostic space. While current losses and a challenging margin environment raise concerns, the company’s cash position provides a buffer to innovate and refine its business model. The anticipated product launches and proactive strategies for cost containment are crucial areas to watch. Engagement with key industry trends will also be pivotal for Zomedica to regain profitability and market confidence.
Key Investment Factors
Growth Potential
Zomedica has significant growth potential stemming from its focus on the veterinary diagnostics market, particularly with the innovative TRUFORMA platform. Continued product development and partnerships may provide new revenue streams.
Profitability Risk
Key risks include exposure to competitive pressures that impact pricing strategies, escalating operational costs, and dependency on the successful launch of product innovations to drive revenue growth.
Financial Position
Zomedica's financial position remains robust with a strong liquidity profile. However, the company needs to address ongoing operational inefficiencies to turn around profitability.
SWOT Analysis
Strengths
Strong cash reserves and liquidity position with total cash and short-term investments of $79.51 million.
Innovative product offering with the TRUFORMA platform targeting niche veterinary markets.
Weaknesses
Deteriorating profitability signals potential challenges in managing operational costs effectively.
Declining gross margins reflecting pressures from competition and rising costs.
Opportunities
Growing demand for veterinary diagnostics as pet ownership continues to rise post-pandemic.
Potential collaborations and partnerships with leading veterinary companies could enhance market presence.
Threats
Intense competition from established players in veterinary diagnostics and therapeutics.
Regulatory hurdles and market acceptance rates that could impact the speed of product adoption.