CSP Inc. Reports 23% Decline in Sales, Net Income Drops to $91,000

CSP Inc. reported a significant decline in financial performance for the three months ended December 31, 2025, with total sales decreasing by approximately 23% to $12.0 million, down from $15.7 million in the same period last year. The Technology Solutions (TS) segment experienced a notable drop in product sales, which fell by 41% to $6.5 million, primarily due to the absence of several large orders that had occurred in the previous year. Conversely, service sales in the TS segment increased by 9% to $4.7 million, attributed to higher third-party maintenance and managed services. The High-Performance Products (HPP) segment, however, saw a 98% increase in total sales, reaching $853,000, driven by growth in both product and service sales.

The company's gross profit for the quarter increased to $4.7 million, resulting in a gross margin of 39%, up from 29% in the prior year. This improvement was largely due to a favorable product mix and the absence of lower-margin large sales from the previous year. Operating expenses decreased slightly to $4.8 million, leading to an operating loss of $112,000, an improvement from the loss of $354,000 reported in the same quarter of 2024. Net income for the quarter was $91,000, a decrease from $472,000 in the prior year, with net income per share dropping to $0.01 from $0.05.

CSP Inc. also reported changes in its balance sheet, with total assets decreasing to $69.2 million from $71.2 million at the end of the previous quarter. Current liabilities fell significantly to $17.9 million, down from $22.2 million, primarily due to a reduction in accounts payable and accrued expenses. The company’s cash and cash equivalents decreased to $24.9 million from $27.4 million, reflecting cash used in operating activities. The company declared a dividend of $0.03 per share, payable on January 15, 2026.

In terms of strategic developments, CSP Inc. continues to focus on enhancing its product offerings, particularly in the cybersecurity space with the development of the ARIA Zero Trust Gateway. The company is also navigating challenges posed by geopolitical tensions, including the ongoing conflicts in Ukraine and Israel, which have not yet significantly impacted its operations but could affect future performance. Looking ahead, CSP Inc. anticipates that its available cash, operational cash flow, and line of credit will be sufficient to meet its working capital and capital expenditure needs for at least the next 12 months.