CEA Industries Reports 203% Revenue Increase but Faces Net Loss in Q1 2025

CEA Industries Inc. reported significant financial developments in its latest quarterly filing, revealing a substantial increase in revenue for the first quarter of 2025. The company generated $713,460 in revenue for the three months ended March 31, 2025, compared to $234,506 during the same period in 2024, marking a 203% increase. This growth was primarily attributed to higher bookings from both the current and previous quarters. However, the company also reported a net loss of $1,068,578, slightly higher than the net loss of $916,603 from the prior year, reflecting ongoing operational challenges.

The company's cost of revenue rose to $674,173, up from $388,881 in the previous year, leading to a gross profit of $39,287, a notable recovery from a gross loss of $154,375 in the first quarter of 2024. The gross margin improved significantly, increasing from a negative 66% to a positive 6%. Despite this improvement, operating expenses also increased to $1,113,124, up 45% from $769,434 in the prior year, primarily due to higher selling, general, and administrative expenses related to professional fees for a potential acquisition.

In terms of operational metrics, CEA Industries reported a backlog of approximately $844,000 as of March 31, 2025, which represents a 72% increase from $490,000 at the end of 2024. This increase was driven by new sales contracts executed during the quarter, totaling a contract value of $1,045,000. The company also noted that it executed net bookings of $1,042,000, a 104% increase from the previous quarter, indicating a positive trend in customer demand.

Strategically, CEA Industries is in the process of acquiring Fat Panda Ltd., a major player in the e-cigarette and vape market in Canada, for CAD 18 million (approximately USD 12.6 million). This acquisition is expected to enhance the company's market presence and diversify its product offerings. The completion of this acquisition is anticipated in the first half of 2025, subject to customary closing conditions. The company continues to face challenges, including inflationary pressures and potential impacts from changes in U.S. trade policies, which could affect its supply chain and operational costs.

Looking ahead, CEA Industries remains focused on improving its financial performance while navigating the complexities of the Controlled Environment Agriculture industry. The company plans to monitor its operational costs closely and may implement pricing adjustments to maintain margins amid inflationary pressures. Despite the challenges, management expresses confidence in the company's ability to meet its obligations and fund operations for the foreseeable future.