Surge Components Reports 12.2% Revenue Growth and 39.4% Increase in Net Income for Six Months Ending May 31, 2025

Surge Components, Inc. reported a notable increase in financial performance for the six months ending May 31, 2025, with consolidated net sales reaching $16.15 million, a 12.2% rise from $14.40 million in the same period last year. The company also saw a significant increase in net income, which rose to $175,320 compared to $125,938 in the prior year, reflecting a 39.4% growth. The gross profit for the period increased by 17.0% to $4.73 million, with a gross margin of 29.3%, up from 28.1% in the previous year. This growth was attributed to increased business with both new and existing customers, as well as higher-margin sales.

In terms of operational metrics, Surge's accounts receivable increased slightly to $6.09 million from $5.96 million, while inventory rose to $5.60 million from $5.00 million. The company’s cash position decreased to $4.01 million from $5.63 million, primarily due to investments in marketable securities and operational cash flow challenges. The total assets of Surge increased to $26.39 million, up from $25.44 million, indicating a solid asset base to support future growth.

Strategically, Surge has been active in expanding its product offerings and customer base. The company reported a significant increase in commission revenue from acting as a sales agent, totaling $203,019 for the six months ended May 31, 2025, compared to $37,683 in the prior year. This reflects Surge's efforts to diversify its revenue streams and enhance its market presence. Additionally, the company has been adapting to market conditions by passing on tariff costs to customers, which contributed approximately $380,332 to net sales during the reporting period.

Looking ahead, Surge Components anticipates continued challenges due to inflation and evolving customer purchasing behaviors, particularly as many customers are centralizing their supply chains and extending payment terms. The company is also facing pressures from rising raw material costs and potential impacts from tariffs. Despite these challenges, Surge remains cautiously optimistic about its growth prospects, emphasizing the importance of maintaining strong relationships with customers and suppliers to navigate the changing market landscape. The company plans to leverage its cash resources for potential growth opportunities while managing operational costs effectively.