EPS of $-0.07 decreased by 652.7% from previous year
Gross margin of 67.8%
Net income of -63.81M
""Navigating through this challenging market demands a focus on innovation and operational efficiency to enhance our value proposition to veterinarians."" - Zomedica CEO
In Q1 2026, Zomedica Corp reported revenues of $6.5 million, a 3.8% increase year-over-year but a notable decline of 17.67% quarter-over-quarter. Despite witnessing a growth in revenue, the company suffered a net loss of approximately $63.8 million, reflecting substantial operational challenges and increased expenditures largely due to ramped-up marketing and R&D efforts aimed at bolstering its product offerings in the veterinary diagnostics market.
The management emphasized on the earnings call the ongoing efforts to expand market penetration and improve product adoption by veterinarians, as evidenced by investments in the TRUFORMA platform. However, continuous operational losses highlight significant financial stress which the CEO framed as "a necessary phase for the future success of our innovative product lineup." Investors should be cautious, as the transition phase may require several quarters before reaching operational profitability.
### Profitability Metrics
- Gross Profit: $4,407,000 (Gross Profit Margin: 67.8%)
- Operating Income: -$64,548,000 (Operating Income Ratio: -9.93%)
- Net Income: -$63,809,000 (Net Income Ratio: -9.82%)
- EPS: -$0.070
### Cash Flow Analysis
- Net Cash Used in Operating Activities: -$6,648,000
- Cash at End of Period: $8,837,000, complemented by $54,770,000 in short-term investments, providing liquidity amidst operational losses.
### Financial Health Indicators
- Current Assets: $73,224,000
- Total Liabilities: $10,549,000
- Total Stockholders’ Equity: $132,444,000
- Debt Levels: Low with total debt of $670,000, which provides stability against insolvency risks.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
6.50M
3.80%
-17.67%
Gross Profit
4.41M
7.04%
-20.57%
Operating Income
-64.55M
-521.49%
-691.03%
Net Income
-63.81M
-596.60%
-786.98%
EPS
-0.07
-652.69%
-900.00%
Key Financial Ratios
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Management Commentary on Strategy:
"The growth trajectory we are experiencing in Q1 2026 is a positive signal of market acceptance. However, managing our expenses wisely remains a priority." - CEO's Comment
On Product Development:
"We've made significant inroads with our TRUFORMA platform, and we're committed to seeing these investments bear fruit as veterinary practices seek more accurate diagnostics." - Chief Marketing Officer
"Navigating through this challenging market demands a focus on innovation and operational efficiency to enhance our value proposition to veterinarians."
— Zomedica CEO
"We recognize that our financials are under pressure, but the investments we’re making today are designed to secure our future market position."
— Zomedica CFO
Forward Guidance
Management provided cautious optimism for the rest of 2026, expressing confidence in achieving breakeven status by mid-year 2027, contingent upon product line acceptance and effective cost management strategies. Key factors to watch include market adoption rates and expense management efficiency. Also, the company is closely monitoring the evolving diagnostic needs of veterinary practices, which could impact future product innovations and service offerings.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ZOM Focus
67.80%
N/A
N/A
N/A
TLRY
29.80%
-18.30%
-1.13%
-9.56%
ACB
53.40%
1.05%
1.16%
12.58%
CGC
34.80%
-32.20%
-23.90%
-1.36%
HEXO
-48.50%
-1.13%
-21.30%
-69.90%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Given Zomedica Corp's significant operational losses and the current financial health, the stock remains a high-risk investment, suitable for investors with a higher tolerance for volatility who are betting on its long-term operational turnaround. Successful execution of management's strategic initiatives will be pivotal in determining investor sentiment and long-term stock performance.
Key Investment Factors
Growth Potential
Zomedica Corp shows growth potential through increasing adoption of its TRUFORMA diagnostic platform, targeting a growing market in veterinary diagnostics. However, the market's response to new product releases will be crucial for sustaining growth in the upcoming quarters.
Profitability Risk
The company faces significant risks including ongoing operational losses, high R&D expenditures that may not yield immediate returns, potential delays in product launches, and competitive pressures in the veterinary diagnostics market.
Financial Position
Zomedica maintains a reasonably strong liquidity position with sufficient cash reserves and short-term investments, but its operational cash flow challenge raises concerns about sustainability without corrective strategic actions.
SWOT Analysis
Strengths
Innovative product offerings like TRUFORMA
Strong market presence in veterinary diagnostics
Improving revenue growth year-over-year
Weaknesses
High operational costs leading to significant net losses
Dependence on market adoption of new technologies
Limited product diversification
Opportunities
Expanding veterinary healthcare market with increasing pet ownership
Potential collaborations or strategic partnerships for product development
Growth in online veterinary services and diagnostics
Threats
Intense competition from established players in the diagnostics space