Reports Second Consecutive Year of Positive Net Income
SOUTH ORANGE, N.J., March 12, 2026 (GLOBE NEWSWIRE) -- Nephros, Inc. (NASDAQ:NEPH), a leading water technology company providing filtration solutions to the medical and commercial markets, today announced financial results for the fourth quarter and fiscal year ended December 31, 2025.
Financial HighlightsFourth Quarter Ended December 31, 2025.
Net revenue was $4.7 million, compared to $3.9 million in the fourth quarter of 2024, up 22%
Net income was $62,000, compared to $349,000 during the same period in 2024
Adjusted EBITDA was $131,000, compared to $481,000 in the fourth quarter of 2024
Year-End 2025
Net revenue was $18.8 million, compared to $14.2 million for the year ended December 31, 2024, up 33%
Net income was $1.2 million, compared with $74,000 in 2024
Adjusted EBITDA was $1.6 million, compared with $548,000 in 2024
"2025 was transformational for Nephros," said Robert Banks, President and Chief Executive Officer. "We delivered 33% revenue growth following a record year in 2024 and we achieved the highest revenue in a quarter in our history. This performance reflects execution of a clear, disciplined strategy built around three growth pillars: Products, Service, and Education."
"Our differentiated product portfolio remains at the center of our success. Continued expansion of reorder rates, deployment of additional sales associates, and growth beyond traditional healthcare applications drove meaningful revenue gains in 2025. Further, we extended our long-term supply agreement with our key partner, Medica, ensuring continuity of supply and supporting sustained multi-year growth."
"We also advanced our service offering through the expansion of installation and replacement capabilities led by Alfred Vargas, Director of Service. The development of these functions in-house has meaningfully reduced barriers to adoption, strengthened customer relationships, and increased opportunities for recurring revenue."
"Additionally, we launched the Nephros Water Institute, led by Brianne McGuire, Director of Business Development, a major milestone in establishing Nephros as an authority in waterborne pathogen mitigation and facility water safety. The Institute expands our engagement with customers and industry stakeholders while supporting long-term demand for filtration, service, and compliance-driven solutions."
"Following another record year, we believe our integrated product, service, and education strategy strengthens our competitive position and provides a durable foundation for continued growth and operational scale."
Financial Performance for the Fourth Quarter and Year Ended December 31, 2025Net revenue for the years ended December 31, 2025, and 2024 was $18.8 million and $14.2 million, respectively. Net revenue for the fourth quarter of 2025 was $4.7 million, compared with $3.9 million in the fourth quarter of 2024, an increase of 22%. This increase was primarily driven by higher programmatic revenue, reflecting strong reorder activity and the addition of several new active sites. In addition, we experienced solid growth in our emergency response business as well as significant growth in service revenue.
Cost of goods sold for the year ended December 31, 2025 was $7.2 million, compared with $5.4 million in 2024, an increase of 32%. Cost of goods sold for the fourth quarter of 2025 was $2 million, compared with $1.4 million in the fourth quarter of 2024, an increase of 41%.
Gross margin was 62% for both of the years ended December 31, 2025, and 2024 respectively. Gross margin for the fourth quarter of 2025 was 58%, compared with 64% in the fourth quarter of 2024. Although we achieved higher margins during the first half of fiscal 2025, those margins eroded somewhat during the second half of the year primarily due to the impact of tariffs. Since April 2025, we have been subject to a 15% tariff on all goods imported from Italy, which was reduced to 10% as of February 22, 2026. While this reduction provides some near-term relief, U.S. tariff policy remains unpredictable, creating uncertainty around potential future margin impacts.
Selling, general and administrative expenses for the year ended December 31, 2025 were $9 million, compared with $7.7 million in 2024, an increase of 17% due to an increase in bonuses and sales commissions. Selling, general and administrative expenses for the fourth quarter of 2025 were approximately $2.3 million, compared with $1.9 million in 2024, an increase of 24% due primarily to an increase in bonuses and sales commissions.
Research and development expenses for the years ended December 31, 2025, and 2024 were $1.3 million and $0.9 million, respectively. Research and development expenses for the fourth quarter of 2025 were $0.4 million, compared with $0.3 million in the fourth quarter of 2024, an increase of 57% primarily due to higher headcount and bonuses.
Depreciation and amortization expenses for the year ended December 31, 2025, were approximately $140,000, compared with approximately $135,000 in 2024, an increase of 4%. Depreciation and amortization expenses for the fourth quarter of 2025 were approximately $32,000, compared with approximately $34,000 in the fourth quarter of 2024.
Net income for the year ended December 31, 2025 was $1.2 million, compared with $0.1 million in 2024. Net income for the fourth quarter of 2025 was $0.1 million, compared with $0.3 million during the same period in 2024. Our improvement in 2025 net income was largely due to our increased sales revenue. We are extremely pleased to report positive net income for the second consecutive year, the only two in the Company's history.
Adjusted EBITDA for the year ended December 31, 2025 was $1.6 million, compared with $0.5 million in 2024. Adjusted EBITDA for the fourth quarter 2025 was approximately $0.1 million, compared with approximately $0.5 million in the fourth quarter of 2024.
As of December 31, 2025, Nephros had cash and cash equivalents of approximately $5.4 million, compared to $3.8 million as of December 31, 2024, and remains debt free.
Adjusted EBITDA Definition and Reconciliation to GAAP Financial MeasuresAdjusted EBITDA is calculated by taking net income (loss) calculated in accordance with generally accepted accounting principles ("GAAP") and excluding all interest-related expenses and income, tax-related expenses and income, non-recurring expenses and income, and non-cash items, including depreciation, amortization, non-cash inventory write-offs, and non-cash compensation. The following tables present a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for the fourth quarter and year to date of the 2025 and 2024 fiscal years:
(unaudited)
2025
Three Month Period Ended
Annual
3/31/2025
6/30/2025
9/30/2025
12/31/2025
Totals
(in $ thousands)
Net income
558
237
337
62
1,194
Adjustments:
Depreciation of property and equipment
17
13
12
13
55
Amortization of other assets
23
20
22
19
84
Interest expense
–
1
–
–
1
Interest income
(13
)
(31
)
(41
)
(54
)
(139
)
Income taxes
9
3
12
Non-cash stock-based compensation
76
71
70
79
296
Non-cash inventory impairments
6
35
15
12
68
Adjusted EBITDA Income
667
355
418
131
1,571
(unaudited)
2024
Three Month Period Ended
Annual
3/31/2024
6/30/2024
9/30/2024
12/31/2024
Totals
(in $ thousands)
Net (loss) income
(169
)
(289
)
183
349
74
Adjustments:
Depreciation of property and equipment
11
11
12
12
46
Amortization of other assets
23
24
21
23
91
Interest expense
1
–
–
–
1
Interest income
(25
)
(21
)
(20
)
(28
)
(94
)
Income taxes
15
15
Non-cash stock-based compensation
(9
)
35
65
62
153
Non-cash inventory impairments
73
107
