EMCORE Reports Fiscal 2025 First Quarter Results

Rhea-AI Summary

EMCORE (EMKR) reported its fiscal 2025 first quarter results, showing mixed performance. Revenue decreased to $19.3M from $21.7M in the previous quarter, but gross margin improved significantly to 32% from 21%. Operating expenses increased to $9.7M from $7.8M.

The company reported a net loss on continuing operations of $5.5M, or $(0.60) per share, compared to a loss of $3.2M, or $(0.35) per share in 4Q24. However, non-GAAP metrics showed improvement with positive net income of $0.5M and Adjusted EBITDA of $1.1M. Cash position at quarter end was $9.0M, down from $10.8M.

Positive

• Gross margin increased significantly from 21% to 32%
• Non-GAAP net income turned positive at $0.5M vs. $(2.0M) loss in previous quarter
• Adjusted EBITDA improved to $1.1M from $(0.4M)
• Strong backlog reported by management

Negative

• Revenue declined by $2.4M to $19.3M
• Operating expenses increased by $1.9M to $9.7M
• Net loss widened to $5.5M from $3.2M
• Cash position decreased by $1.8M to $9.0M

Insights

Financial Analyst

The Q1 FY25 results reveal EMCORE's strategic transformation is gaining traction, albeit with some growing pains. The standout metric is the gross margin expansion to 32%, an 11% improvement quarter-over-quarter, demonstrating that restructuring efforts are delivering tangible benefits to operational efficiency.

The divergence between GAAP and non-GAAP metrics tells an important story. While GAAP losses widened to $5.5M, the company achieved positive non-GAAP earnings of $0.5M and Adjusted EBITDA of $1.1M. This spread typically indicates one-time charges and restructuring costs that mask underlying operational improvements. The operating expenses increased by $1.9M to $9.7M, but non-GAAP operating expenses rose only marginally by $0.3M, suggesting most of the increase was non-recurring.

However, the cash position decline of $1.8M to $9.0M warrants attention. With a quarterly cash burn rate at this level, the company has approximately 5 quarters of runway at current spending levels. The strong backlog mentioned by management could provide some comfort, but improving working capital management will be crucial.

The revenue decline of $2.4M to $19.3M needs to be viewed in the context of the company's strategic shift toward higher-margin business in the aerospace and defense sector. The improved gross margins suggest EMCORE is successfully pivoting toward more profitable contracts, though this transition period may continue to show revenue volatility.

BUDD LAKE, NJ / ACCESS Newswire / February 13, 2025 / EMCORE Corporation (Nasdaq:EMKR), a leading provider of inertial navigation solutions to the aerospace and defense industry, today announced results for the fiscal 2025 first quarter (1Q25) ended December 31, 2024.

"Gross profit margins increased significantly in fiscal 1Q25, primarily driven by the completion of all restructuring-related cost reduction activities during the prior quarter, as well as a favorable revenue mix. Backlog remains strong and we are also happy to report that, despite the GAAP earnings loss, we achieved positive non-GAAP earnings and positive Adjusted EBITDA," said Matt Vargas, interim Chief Executive Officer.

		Three Months Ended
		Dec 31, 2024 1Q25				Sep 30, 2024 4Q24				+increase/ -decrease
Revenue		$	19.3M			$	21.7M			$	-2.4M
Gross margin			32	%			21	%			+11	%
Operating expenses		$	9.7M			$	7.8M			$	+1.9M
Net loss on continuing operations		$	(5.5M	)			(3.2M	)		$	-2.3M
Net loss on continuing operations per share, basic and diluted		$	(0.60	)		$	(0.35	)		$	-0.25
Non-GAAP gross margin (a)			36	%			23	%			+13	%
Non-GAAP operating expenses (a)		$	6.4M			$	6.1M			$	+0.3M
Non-GAAP net income (loss) on continuing operations (a)		$	0.5M			$	(2.0M	)		$	+2.5M
Non-GAAP net income (loss) on continuing operations per share, basic and diluted (a)		$	0.05			$	(0.22	)		$	+0.27
Adjusted EBITDA (a)		$	1.1M			$	(0.4M	)		$	+1.5M
Cash, cash equivalents and restricted cash at end of period		$	9.0M			$	10.8M			$	-1.8M
(a) Please refer to the schedules at the end of this press release for GAAP to non-GAAP reconciliations and other information related to non-GAAP financial measures.

About EMCORE

EMCORE Corporation is a leading provider of inertial navigation solutions to the aerospace and defense markets. We leverage industry-leading Photonic Integrated Chip (PIC) and Quartz MEMS chip-level technology to deliver state-of-the-art component and system-level products across our end-market applications. EMCORE has vertically-integrated manufacturing capability at its facilities in Budd Lake, NJ, Concord, CA, and Tinley Park, IL. Our manufacturing facilities all maintain ISO 9001 quality management certification, and we are AS9100 aerospace quality certified at our facilities in Budd Lake and Concord. For further information about EMCORE, please visit https://www.emcore.com.

Use of Non-GAAP Financial Measures

The Company conforms to U.S. Generally Accepted Accounting Principles ("GAAP") in the preparation of its financial statements. We disclose supplemental non-GAAP earnings measures, including for gross profit, gross margin, operating expenses, net loss, net loss per share, and adjusted EBITDA. The Company has, regardless of result, applied consistent rationale and methods when presenting supplemental non-GAAP measures.

Management believes these supplemental non-GAAP measures reflect the Company's core ongoing operating performance and facilitate comparisons across reporting periods. The Company uses these measures when evaluating its financial results and for planning and forecasting of future periods. We believe that these supplemental non-GAAP measures are also useful to investors in assessing our operating performance. While we believe in the usefulness of these supplemental non-GAAP measures, there are limitations. Our non-GAAP measures may not be reported by other companies in our industry and/or may not be directly comparable to similarly titled measures of other companies due to potential differences in calculation. We compensate for these limitations by using these non-GAAP measures as a supplement to GAAP and by providing the reconciliations to the most comparable GAAP measure.

The schedules at the end of this press release reconcile the Company's non-GAAP measures to the most directly comparable GAAP measure. The adjustments share one or more of the following characteristics: (a) they are unusual and the Company does not expect them to recur in the ordinary course of its business, (b) they do not involve the expenditure of cash, (c) they are unrelated to the ongoing operation of the business in the ordinary course, or (d) their magnitude and timing is largely outside of the Company's control. All of these items meet one or more of the characteristics listed above. The criteria that must be met for litigation-related expense to qualify as a non-GAAP measure is that it must be directly connected to active litigation that the Company infrequently encounters and is unrelated to the ongoing operations of the business in the ordinary course. Due to the November 7, 2024 Merger Agreement, the Company incurred higher-than-normal transaction-related costs in Q125 that are included in the reconciliation as they are unrelated to the ongoing operation of the business in the ordinary course. All legal expenses related to the ordinary course of business are included in the non-GAAP results consistently for all reporting periods. The Company has, for all reporting periods disclosed in this press release, applied consistent rationale, method, and adjustments in reconciling non-GAAP measures to the most directly comparable GAAP measure, reflecting the Company's core ongoing operating performance and facilitating comparisons across reporting periods that the Company uses when evaluating its financial results, planning and forecasting future periods, and that are useful to investors in assessing our performance.

Non-GAAP measures are not in accordance with or an alternative to GAAP, nor are they meant to be considered in isolation or as a substitute for comparable GAAP measures. Our disclosures of these measures should be read only in conjunction with our financial statements prepared in accordance with GAAP. Non-GAAP measures should not be viewed as a substitute for the Company's GAAP results.

EMCORE CORPORATION
Condensed Consolidated Balance Sheets
(unaudited)

		December 31,				September 30,
(in thousands)		2024				2024
ASSETS
Current assets:
Cash and cash equivalents		$	8,480			$	10,291
Restricted cash			495				495
Accounts receivable, net of allowances for credit loss of $41 and $173, respectively			14,654				14,342
Contract assets			560				1,182
Inventory			26,017				25,065
Prepaid expenses			3,604				3,504
Other current assets			128				137
Total current assets			53,938				55,016
Property, plant, and equipment, net			7,298				7,868
Operating lease right-of-use assets			17,367				18,094
Intangible assets, net			9,807				10,289
Other non-current assets			2,659				2,646
Total assets		$	91,069			$	93,913
LIABILITIES and SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$	8,037			$	8,563
Accrued expenses and other current liabilities			6,095				5,220
Contract liabilities			2,483				1,424
Financing payable			148				587
Operating lease liabilities - current			2,298				2,668
Total current liabilities			19,061				18,462
Operating lease liabilities - non-current			17,843				18,247
Asset retirement obligations			2,398				2,378
Warrant liability			6,606				4,660
Total liabilities			45,908				43,747
Commitments and contingencies
Shareholders' equity:
Common stock, no par value, 100,000 shares authorized; 9,771 shares issued and 9,081 shares outstanding as of December 31, 2024; 9,764 shares issued and 9,703 shares outstanding as of September 30, 2024			826,131				825,625
Treasury stock at cost; 691 shares as of December 31, 2024 and September 30, 2024			(47,721	)			(47,721	)
Accumulated other comprehensive income			958				958
Accumulated deficit			(734,207	)			(728,696	)
Total shareholders' equity			45,161				50,166
Total liabilities and shareholders' equity		$	91,069			$	93,913

EMCORE CORPORATION
Condensed Consolidated Statements of Operations
(unaudited)

		Three Months Ended December 31,
(in thousands, except for per share data)		2024				2023
Revenue		$	19,305			$	24,123
Cost of revenue			13,036				18,035
Gross profit			6,269				6,088
Operating expense:
Selling, general, and administrative			7,171				6,609
Research and development			1,631				3,609
Restructuring			928				-
Severance			19				211
Gain on sale of assets			-				(31	)
Total operating expense			9,749				10,398
Operating loss			(3,480	)			(4,310	)
Other expense:
Loss on extinguishment of debt and change in fair value of warrant liability			(1,946	)			-
Interest expense, net			-				(9	)
Other income (expense)			7				(16	)
Total other expense			(1,939	)			(25	)
Loss from continuing operations before income tax expense			(5,419	)			(4,335	)
Income tax expense from continuing operations			(42	)			(28	)
Net loss from continuing operations		$	(5,461	)		$	(4,363	)
Loss from discontinued operations		$	(50	)		$	(1,316	)
Net loss		$	(5,511	)		$	(5,679	)
Per share data:
Net loss on continuing operations per share, basic and diluted		$	(0.60	)		$	(0.49	)
Net loss on discontinued operations per share, basic and diluted		$	(0.01	)		$	(0.15	)
Net loss per share, basic and diluted		$	(0.61	)		$	(0.64	)
Weighted-average number of shares outstanding, basic and diluted			9,068				8,899

EMCORE CORPORATION
Reconciliations of GAAP to Non-GAAP Financial Measures
(unaudited)

		Three Months Ended
		December 31, 2024				September 30, 2024
(in thousands, except for percentages)			1Q25				4Q24
Gross profit		$	6,269			$	4,472
Gross margin			32	%			21	%
Stock-based compensation expense			120				40
Asset retirement obligation accretion			20				61
Intangible asset amortization			482				482
Non-GAAP gross profit		$	6,891			$	5,055
Non-GAAP gross margin			36	%			23	%

		Three Months Ended
		December 31, 2024				September 30, 2024
(in thousands)			1Q25				4Q24
Operating expense		$	9,749			$	7,825
Stock-based compensation expense			(386	)			(359	)
Impairment expense			-				(3	)
Severance expense			(19	)			168
Restructuring expense			(928	)			(872	)
Loss on sale of assets			-				(50	)
Transition/M&A-related expense			(2,021	)			(598	)
Litigation-related expense			-				(39	)
Non-GAAP operating expense		$	6,395			$	6,072

		Three Months Ended
		December 31, 2024				September 30, 2024
(in thousands, except for per share data and percentages)		1Q25				4Q24
Net loss from continuing operations		$	(5,461	)		$	(3,168	)
Net loss from continuing operations per share, basic and diluted		$	(0.60)			$	(0.35)
Stock-based compensation expense			506				399
Asset retirement obligation accretion			20				61
Intangible asset amortization			482				482
Impairment expense			-				3
Severance expense			19				(168	)
Restructuring expense			928				872
Loss on sale of assets			-				50
Transition/M&A-related expense			2,021				598
Litigation-related expense			-				39
Loss on extinguishment of debt and change in fair value of warrant liability			1,946				2,572
Other income			(7	)			(3,612	)
Income tax expense (benefit)			42				(85	)
Non-GAAP net income (loss) from continuing operations		$	496			$	(1,957	)
Non-GAAP net income (loss) from continuing operations per share, basic and diluted		$	0.05			$	(0.22)
Interest expense, net			-				940
Depreciation expense			570				580
Adjusted EBITDA		$	1,065			$	(437	)
Adjusted EBITDA % of revenue			5.5	%			(2.0	%)

Contact:
EMCORE Corporation
Tom Minichiello
Chief Financial Officer
investor@emcore.com

SOURCE: EMCORE Corporation

View the original press release on ACCESS Newswire

FAQ

What was EMKR's revenue in Q1 2025?

EMKR reported revenue of $19.3M for Q1 2025, down from $21.7M in the previous quarter.

How much did EMKR's gross margin improve in Q1 2025?

EMKR's gross margin improved by 11 percentage points, from 21% to 32% in Q1 2025.

What was EMKR's net loss per share in Q1 2025?

EMKR reported a net loss of $0.60 per share in Q1 2025, compared to $0.35 per share loss in Q4 2024.

Did EMKR achieve positive Adjusted EBITDA in Q1 2025?

Yes, EMKR achieved positive Adjusted EBITDA of $1.1M in Q1 2025, compared to $(0.4M) in the previous quarter.

What was EMKR's cash position at the end of Q1 2025?

EMKR had $9.0M in cash, cash equivalents and restricted cash at the end of Q1 2025, down from $10.8M.