374Water Inc. Reports 72% Revenue Increase but Faces Rising Operating Expenses and Net Loss

374Water Inc. reported its financial results for the first quarter of fiscal year 2025, revealing a significant increase in revenue compared to the same period last year. The company generated $543,100 in revenue, a 72% increase from $315,278 in the first quarter of 2024. This growth was primarily driven by a rise in service revenues, which accounted for 75% of total revenues, largely due to the completion of a full-scale demonstration for a customer. However, the company also experienced a decline in equipment manufacturing revenue, which fell by approximately $162,000.

Despite the increase in revenue, 374Water's operating expenses surged to $3,923,793, up 107% from $1,899,183 in the prior year. This rise was attributed to higher compensation and related expenses, which more than doubled due to increased headcount and stock-based compensation. General and administrative expenses also rose significantly, reflecting costs associated with relocating to a new manufacturing facility and increased operational activities. As a result, the company reported a net loss of $3,698,414, compared to a loss of $2,024,465 in the same quarter of 2024.

In terms of operational developments, 374Water has made strides in its strategic initiatives, including the preparation of its first commercial-scale AirSCWO system for testing at the City of Orlando's Iron Bridge Water Reclamation Facility. The company has also secured a waste destruction services contract with the University of North Carolina at Chapel Hill. These efforts are part of a broader strategy to enhance the company's market presence and operational capabilities, which includes plans to expand its manufacturing capacity and improve its technology.

The company's balance sheet reflects a decrease in cash and cash equivalents, which fell to $6,883,845 from $10,651,644 at the end of the previous fiscal year. Total assets also declined to $15,978,163 from $19,183,833. The company reported working capital of $8,734,300 but noted that it will require additional financing to continue operations and meet its financial obligations over the next twelve months. The management has indicated that it may pursue various funding strategies, including equity offerings, to secure the necessary capital.

Looking ahead, 374Water anticipates continued challenges, including the need for additional funding and the potential for ongoing losses. The company is focused on executing its strategic plan, which includes scaling operations and enhancing its technology to meet market demands. However, management has cautioned that the ability to achieve these goals is contingent on securing sufficient capital and successfully navigating the competitive landscape in the waste management industry.