Applied Energetics Reports 56% Revenue Increase in Q1 2025 Amid Rising Losses

Applied Energetics, Inc. reported a significant increase in revenue for the first quarter of 2025, generating approximately $209,753 compared to $134,235 in the same period last year, marking a 56% increase. The company attributed this growth to the commencement of a new contract in June 2024. However, the cost of revenue also saw a substantial decrease, falling to $63,914 from $274,432, primarily due to the unavailability of federal funds. Despite the revenue increase, the company reported a net loss of $3,105,666, which is an 18.9% increase from the net loss of $2,611,378 in the prior year, driven by higher general and administrative and research and development expenses.

In terms of operational changes, Applied Energetics has been actively expanding its capabilities and facilities. The company opened a new Battle Lab in February 2025, designed to test and demonstrate advanced laser technologies. This facility is expected to enhance the company's research and development efforts and support its strategic collaboration with Kord Technologies, Inc. to integrate its Ultrashort Pulse technology into Kord's High Energy Laser Weapon System. The company also expanded its leased space at the University of Arizona Tech Park to accommodate its growing operations.

The company's total operating expenses increased to $3,251,519 for the first quarter of 2025, up from $2,473,239 in the same period last year. This rise was largely due to increased spending on research and development, which surged to $323,047 from $80,780, reflecting the company's commitment to advancing its laser technologies. General and administrative expenses also rose, driven by higher salaries, employee benefits, and consulting costs. Selling and marketing expenses, however, decreased significantly, primarily due to the costs associated with the development of the Battle Lab.

As of March 31, 2025, Applied Energetics had total current assets of $4,529,504 and total current liabilities of $766,108, resulting in working capital of $3,763,396. The company reported cash and cash equivalents of $4,285,276, a notable increase from $164,812 at the end of 2024. Despite this positive cash position, the company faces challenges due to the discontinuation of funding for two contracts, which has raised concerns about future cash flows and operational sustainability. Management is actively seeking additional financing opportunities to support ongoing operations and development efforts.

Looking ahead, Applied Energetics remains focused on its strategic plan to enhance its laser technologies and expand its market presence. The company is exploring new funding sources and partnerships to mitigate the impact of recent funding cuts from government contracts. While uncertainties in the defense budget and ongoing geopolitical tensions pose risks, the company believes that its innovative technologies position it well for future growth in both defense and commercial markets.