Capstone Holding Corp. Reports Q3 2025 Net Loss of $2.0 Million Despite 11% Revenue Growth

Capstone Holding Corp. reported its financial results for the third quarter of 2025, revealing a net loss of $2.0 million, compared to a net income of $34,000 in the same period last year. The company's revenue for the quarter reached $13.7 million, an increase of 11% from $12.3 million in the prior year, primarily driven by the acquisition of Carolina Stone Holdings, which contributed approximately $957,000 in incremental revenue. Despite the increase in sales, the cost of goods sold also rose by 12% to $10.4 million, leading to a slight decrease in gross profit margin from 24.3% to 23.8%.

For the nine months ending September 30, 2025, Capstone's net sales were $34.4 million, a marginal decline from $34.6 million in the same period of 2024. The company reported a net loss of $4.4 million for the nine-month period, significantly higher than the $1.5 million loss recorded in the previous year. The increase in losses was attributed to higher selling, general, and administrative expenses, which rose by 22% to $9.5 million, largely due to increased investor relations costs and expenses related to the Carolina Stone acquisition.

Operationally, Capstone has expanded its customer base to over 400 active clients across 32 states, enhancing its distribution network. The company has also made significant strides in geographic expansion with the acquisition of Carolina Stone Holdings, which bolsters its presence in the Southeastern U.S. The acquisition is expected to enhance service capacity and strengthen relationships with builders and distributors in a growing market.

In terms of financial health, Capstone's total assets increased to $58.5 million as of September 30, 2025, up from $47.2 million at the end of 2024. The company reported current liabilities of $20.0 million, up from $12.6 million, reflecting increased accounts payable and accrued expenses. The company’s working capital, excluding the current portion of long-term debt, was $2.8 million, indicating a solid liquidity position despite the operational losses.

Looking ahead, Capstone plans to leverage its recent acquisitions and expand its product offerings to drive organic growth. The company has also entered into various financing arrangements, including a public offering that generated approximately $3.3 million in net proceeds, and a convertible note financing that raised an additional $3.0 million. These funds are expected to support ongoing operations and future growth initiatives, although the company acknowledges that its ability to maintain liquidity and meet financial covenants remains subject to market conditions and operational performance.