Nephros Stock Earnings Reports

Nephros reported record Q1 2026 revenue of $5.2 million (up 7% YoY), the first quarter above $5.0M, driven by strong programmatic growth (~23% YoY) and expanding installations, services and education initiatives. Gross margin declined to 57% from 65% a year ago due to (1) tariffs (about $200k incremental cost), (2) currency (a stronger euro), and (3) a deliberate product-mix shift into lower-margin commercial applications. Management expects tariff relief (tariff rate fell from 15% to 10% end of Feb 2026) and new inventory to improve margins later in the year and is pursuing refund/mitigation strategies. R&D and SG&A rose on higher headcount and professional fees; net income fell ~75% to ~$140k and adjusted EBITDA fell ~69% to ~$206k. Cash was ~$4.0M at quarter end and the company is debt-free. Management emphasized strategic progress building recurring programmatic revenue, expanding into larger commercial markets (ice machines, fountains, bottle fillers, large buildings), growing the Nephros Water Institute/education pillar to accelerate adoption, and targeted sales hiring (notably New York). Key near-term risks are tariff and currency pressures and margin variability, which management views as temporary and manageable.