Covalon Technologies Ltd. (TSXV: COV; OTCQX: CVALF) Q2 2025 Earnings Call | 05/28/2025

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Covalon Technologies Ltd. (TSXV: COV; OTCQX: CVALF) reported its Q2 2025 results for the period ended March 31, 2025, posting total revenue of $7.59 million, a 9.6% year-over-year decline from $8.39 million, primarily due to a normalization of inventory levels at a key U.S. distributor. Despite the revenue decrease, this quarter marked Covalon’s fifth consecutive period of profitability, with net income of $429,139 and earnings per share of $0.02, though both figures missed analyst expectations of $0.03 per share. Gross profit for the quarter was $4.14 million, with gross margin at 55%, down from 63% a year earlier, reflecting changes in geographic and product mix. Operating expenses remained stable at $3.86 million, with slight increases in operations expenses due to higher employee training costs aimed at improving operational efficiency and regulatory compliance. The company’s cash position strengthened to $18 million, up from $7 million a year ago, and Covalon ended the quarter with no debt, supporting ongoing investments in growth and innovation. Strategically, Covalon signed a major distribution agreement with Paul Hartmann USA for its ColActive Plus® and ColActive Plus® with Silver advanced wound care dressings, reinforcing its U.S. Advanced Wound Care sales channel as a key growth driver. Year-to-date, the company achieved 21% revenue growth and a 57% increase in adjusted EBITDA, with U.S. product revenue delivering a three-year CAGR of over 30%. Vascular access and surgical consumables segments saw over 40% growth year-to-date, contributing to the company’s robust performance. Looking ahead, management anticipates sequential quarterly growth in Q3 and a strong second half of the fiscal year, citing a clear line of sight to improved performance based on in-house orders, forecasts, and recent partner sell-through trends. Covalon continues to explore mergers, acquisitions, and shareholder value creation opportunities, with plans to expand its ValGuard product line substantially by 2030. Outlook: Q3 2025: Expected sequential revenue growth and stronger second half performance. FY2025: Continued focus on U.S. wound care channel, margin improvement, and expansion of core product lines. Strategic initiatives include new distribution partnerships and potential M&A activity to accelerate long-term growth. About Inside Ticker: For more expert analysis and real-time updates on Covalon Technologies Ltd. (TSXV: COV; OTCQX: CVALF) and other market movers, follow Inside Ticker and visit InsideTicker.com for in-depth reports, financial insights, and the latest news on leading companies. #Covalon #COV #CVALF #EarningsCall #Q22025 #MedicalDevices #WoundCare #RevenueGrowth #Profitability #StockMarket #InsideTicker