Astrotech Corporation Reports 76% Revenue Decline in Q2 Fiscal Year 2025

Astrotech Corporation reported a significant decline in financial performance for the second quarter and first half of fiscal year 2025, as detailed in its latest 10-Q filing. For the three months ended December 31, 2024, the company generated revenue of $261,000, a decrease of 76% from $1.1 million in the same period last year. The six-month revenue also fell to $295,000 from $1.54 million, marking a 81% decline. The gross profit for the quarter was $155,000, with a gross margin of 59%, while the six-month gross profit was $164,000, reflecting a gross margin of 56%. The net loss for the quarter was $4.01 million, compared to a loss of $2.64 million in the prior year, and the six-month net loss increased to $7.29 million from $5.55 million.

The decline in revenue is attributed to a reduction in device sales, particularly the TRACER 1000, which is used in security applications. The company noted that while the gross margin improved due to higher margins on device sales and minimal costs associated with grant revenue, the overall decrease in sales volume significantly impacted total revenue. Operating expenses rose by 24% in the quarter, primarily driven by a 54% increase in research and development costs, which were necessary to support the development of new mass spectrometry offerings.

Astrotech has been actively pursuing strategic developments, including the expansion of its product lines and geographic reach. The company has deployed the TRACER 1000 in approximately 30 locations across 14 countries, and it has received recent contracts from the U.S. Department of Homeland Security for further development of this technology. Additionally, Astrotech's subsidiary, AgLAB, is focused on the hemp and cannabis markets, with ongoing field trials for its AgLAB 1000-D2 mass spectrometer aimed at optimizing yields in distillation processes.

As of December 31, 2024, Astrotech's cash and cash equivalents stood at $3.16 million, down from $10.44 million at the end of June 2024. The company reported a net cash outflow of $6.73 million from operating activities during the first half of the fiscal year, reflecting increased operational losses. Looking ahead, Astrotech's management has indicated that while they are committed to advancing their technology and product offerings, they face challenges related to market conditions, competition, and the need for continued investment in research and development. The company remains focused on executing its business plan and navigating the evolving landscape of mass spectrometry applications.