TOMZ — TOMI Environmental Solutions, Inc.

TOMI Environmental Solutions, Inc. Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Revenue: $5.6 million for the year ended December 31, 2025, down from $7.7 million in 2024, primarily due to the timing of customer equipment purchases.
• Service Revenue: Remained stable year-over-year, indicating durability of the installed base.
• Gross Margin: Improved to approximately 55%, up from 46% in 2024.
• Operating Expenses: Totaled $6.9 million, a 10% decrease from 2024, reflecting disciplined cost management.
• Net Loss: $3.7 million or $0.19 per share, an improvement from a net loss of $4.5 million or $0.22 per share in 2024.
• Cash Position: Approximately $88,000 in cash and $1 million in working capital; used $1.2 million in operating cash during 2025.

2. Strategic Updates and Business Highlights:

• SteraMist Integration System (SIS): Achieved first commercial installation and ended the year with four operational SIS installations. Secured a $500,000 contract with a global biopharmaceutical leader.
• Customer Expansion: Significant wins in the life sciences sector, including partnerships with NASA and a leading cell and gene therapy manufacturer.
• OEM Partnerships: Strengthening relationships with companies like PBSC and Steelco to embed iHP technology in clean room environments.
• Food Safety Sector: Engaged with major partners like Danone and Nestle, capitalizing on FDA approval of hydrogen peroxide as a food additive.
• Regulatory Approvals: Received approvals from HSE and BPR in the UK and Netherlands, with expectations for further EU approvals.
• Recurring Revenue Growth: Backlog for support services up 16% and BIT Solutions up 24% year-over-year.

3. Forward Guidance and Outlook:

• 2026 Revenue Projections: Anticipated revenue of approximately $12 million, with first-quarter 2026 revenue expected to exceed $3 million.
• Integration Project Pipeline: Total opportunity book for integration projects stands at $16 million, with an additional $20 million for SteraMist iHP.
• Focus on Recurring Revenue: Continued emphasis on transitioning to a service-based model to enhance financial stability and predictability.

4. Bad News, Challenges, or Points of Concern:

• Revenue Decline: Notable decrease in overall revenue compared to 2024, attributed to deferrals in capital expenditure by customers due to economic uncertainty.
• Liquidity Issues: Cash reserves remain low, necessitating additional financing efforts, including a recent convertible note and equity line of credit.
• Market Headwinds: Challenges from tariffs, geopolitical tensions, and economic uncertainty impacting customer purchasing decisions.
• Operational Scaling: Need for capital to scale operations effectively in response to increased demand.

5. Notable Q&A Insights:

• Customer Deferrals: Some customers are beginning to move forward with delayed capital expenditure projects, indicating potential recovery.
• BIT Solution Revenue Trends: Increased usage of BIT Solutions noted, with expectations of continued growth in 2026.
• Military Applications: Interest in exploring SteraMist applications for military use, particularly in crowded environments like Navy ships.
• Distributor Expansion: Ongoing efforts to add more distributors both domestically and internationally remain a priority for growth.

Overall, TOMI Environmental Solutions is navigating a challenging financial landscape while positioning itself for future growth through strategic partnerships and a focus on recurring revenue models. The company remains optimistic about its prospects in 2026, despite facing significant headwinds in 2025.