CSP Inc. Reports 2% Sales Growth and Net Income Turnaround for Q4 2024

CSP Inc. reported a modest increase in financial performance for the three months ended December 31, 2024, with total sales reaching $15.67 million, up 2% from $15.38 million in the same period last year. The Technology Solutions (TS) segment contributed to this growth, with service sales increasing by 16% to $4.66 million, while product sales remained relatively stable. The High-Performance Products (HPP) segment, however, experienced a decline in product sales, dropping 83% to $82,000, which was partially offset by a 45% increase in service sales. The company's gross profit improved to $4.56 million, resulting in a gross margin of 29%, compared to 27% in the prior year.

In terms of profitability, CSP Inc. reported a net income of $472,000 for the quarter, a significant turnaround from a net loss of $73,000 in the same quarter of 2023. This improvement was aided by a foreign exchange gain of $295,000 and a reduction in income tax expenses, which resulted in an income tax benefit of $115,000. Operating expenses increased to $4.92 million, primarily due to higher selling, general, and administrative costs, which rose by 10% to $4.13 million.

CSP Inc. continues to focus on strategic developments, including the ongoing enhancement of its ARIA product lines and cybersecurity solutions. The company has not reported any significant acquisitions during this period but remains committed to expanding its market presence. As of December 31, 2024, the company had 9,880,413 shares of common stock outstanding, reflecting a slight increase from the previous quarter. The company also declared a dividend of $0.03 per share, payable on January 15, 2025.

Operationally, CSP Inc. reported a decrease in total current assets to $52.19 million from $54.85 million at the end of the previous quarter. The company’s cash and cash equivalents increased slightly to $30.65 million. The total liabilities decreased to $20.07 million, down from $22.17 million, indicating improved financial stability. The company’s employee headcount remained stable, supporting its operational capabilities.

Looking ahead, CSP Inc. anticipates continued growth in its TS segment, driven by increased demand for managed services and cybersecurity solutions. However, the company acknowledges potential risks, including geopolitical tensions and market competition, which could impact future performance. Management remains focused on enhancing internal controls and operational efficiencies to navigate these challenges effectively.