Worksport Ltd. Reports 337% Revenue Growth to $2.24 Million Despite Increased Net Loss

Worksport Ltd. reported significant financial growth in its latest quarterly filing, with net sales for the three months ended March 31, 2025, reaching $2.24 million, a substantial increase of approximately 337% compared to $512,637 in the same period of 2024. This surge in revenue was primarily driven by enhanced branding and marketing efforts, which bolstered direct-to-consumer sales and expanded business-to-business channels through distributors and wholesalers. The company noted that sales in the U.S. accounted for $2.23 million, reflecting a 369% increase year-over-year, while Canadian sales decreased by 38% to $12,456.

Despite the increase in sales, Worksport reported a net loss of $4.46 million for the first quarter of 2025, up from a loss of $3.71 million in the prior year, marking a 20% increase in losses. The rise in net loss was attributed to higher operating expenses, which increased by $975,605 to $4.65 million. Notably, general and administrative expenses rose significantly due to increased labor costs and overhead absorption related to production volume requirements. The company also ramped up its sales and marketing efforts, which contributed to the overall increase in operating expenses.

In terms of operational developments, Worksport has expanded its dealer network by 30% in early 2025 and launched its new flagship product line, the AL4 Hardcover. The company has also made strides in its research and development efforts, unveiling the AetherLux™ heat pump system through its subsidiary, Terravis Energy. This product is designed to operate efficiently in extreme temperatures, addressing a significant gap in the market. Additionally, Worksport entered into a warrant inducement agreement that generated approximately $6.73 million in gross proceeds, enhancing its liquidity position.

As of March 31, 2025, Worksport's total assets amounted to $26.66 million, up from $25.74 million at the end of 2024. The company reported cash and cash equivalents of $5.08 million, an increase from $4.88 million, and had a working capital of $7.94 million. The increase in cash was primarily due to capital raised through financing activities, including the exercise of warrants. However, the company continues to face challenges, with an accumulated deficit of $68.94 million and ongoing reliance on equity and debt financing to support operations.

Looking ahead, Worksport aims to transition towards generating cash flows from operations as its primary source of liquidity. The company plans to continue expanding its product offerings and customer base while improving manufacturing efficiencies. However, management has expressed uncertainty regarding its ability to maintain sufficient cash balances for planned operations and future developments, indicating that additional capital may be necessary. The company remains focused on leveraging its recent product launches and market strategies to drive growth in the coming quarters.