EPS of $-0.01 increased by 69.4% from previous year
Gross margin of 70.3%
Net income of -7.19M
""While we experienced better revenue, our operational expenses grew significantly due to expanded marketing outreach and R&D initiatives. However, we believe these investments will pay off as we broaden our market presence."" - Zomedica CEO
Zomedica Corp (ZOM) Financial Results Q4 2025: A Challenging Quarter Highlighting Opportunities in Veterinary Diagnostics
Executive Summary
In Q4 2025, Zomedica Corp reported revenues of $7.895 million, a 12.83% increase quarter-over-quarter (QoQ) and a 7.61% rise year-over-year (YoY). Despite the revenue growth, the company faced persistent challenges with profitability, registering a net loss of $7.194 million. Management highlighted efforts to streamline operations and improve gross margins, which stood at 70.27%. Strategic investments in research and development remain pivotal as Zomedica seeks to expand its product offerings aimed at veterinarians, particularly in diagnostics and treatments for companion animals.
The quarter reflects a period of both challenges and opportunities as Zomedica aims to increase market share within the veterinary health sector. The management's commentary emphasized a forward-looking strategy focused on innovation and understanding the driving needs of veterinarians. As Zomedica continues to adjust its operational efficiencies, the company is positioned to capture a larger share of the growing market for pet health diagnostics and treatment solutions.
Key Performance Indicators
Revenue
7.90M
QoQ: 12.83% | YoY:7.61%
Gross Profit
5.55M
70.27% margin
QoQ: 9.64% | YoY:73.21%
Operating Income
-8.16M
QoQ: -9.68% | YoY:28.35%
Net Income
-7.19M
QoQ: -7.42% | YoY:67.89%
EPS
-0.01
QoQ: -2.94% | YoY:69.43%
Revenue Trend
Margin Analysis
Key Insights
**Revenue**: $7.895 million - up 12.83% QoQ and 7.61% YoY
**Gross Profit**: $5.548 million with a gross margin of 70.27%, reflecting an increase of 73.21% YoY despite a QoQ raise of 9.64%.
**Operating Income**: Loss of $8.160 million, showing a decrease of 28.35% YoY due to increased operational expenses.
**Net Income**: A net loss of $7.194 million, improving by 67.89% YoY but decreasing by 7.42% QoQ.
**EPS**: Diluted EPS at -$0.007, a 69.43% improvement YoY but a 2.94% decline QoQ.
Financial Highlights
Financial Overview
- Revenue: $7.895 million - up 12.83% QoQ and 7.61% YoY
- Gross Profit: $5.548 million with a gross margin of 70.27%, reflecting an increase of 73.21% YoY despite a QoQ raise of 9.64%.
- Operating Income: Loss of $8.160 million, showing a decrease of 28.35% YoY due to increased operational expenses.
- Net Income: A net loss of $7.194 million, improving by 67.89% YoY but decreasing by 7.42% QoQ.
- EPS: Diluted EPS at -$0.007, a 69.43% improvement YoY but a 2.94% decline QoQ.
Balance Sheet and Cash Flow
- Cash at End of Period: $7.021 million, down from $9.747 million at the beginning of the quarter.
- Free Cash Flow: -$6.602 million, signaling ongoing investments without immediate returns.
- Current Ratio: 8.76, indicating strong liquidity, far exceeding industry averages.
- Total Assets: $207.36 million with total liabilities of $11.696 million leads to a healthy equity position.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
7.90M
7.61%
12.83%
Gross Profit
5.55M
73.21%
9.64%
Operating Income
-8.16M
28.35%
-9.68%
Net Income
-7.19M
67.89%
-7.42%
EPS
-0.01
69.43%
-2.94%
Key Financial Ratios
currentRatio
8.76
grossProfitMargin
70.3%
operatingProfitMargin
-103.4%
netProfitMargin
-91.1%
returnOnAssets
-3.47%
returnOnEquity
-3.68%
debtEquityRatio
0.01
operatingCashFlowPerShare
$-0
freeCashFlowPerShare
$-0.01
priceToBookRatio
0.6
priceEarningsRatio
-4.09
Net Income vs. Revenue
Expense Breakdown
Management Commentary
In the recent earnings call, management emphasized several key themes:
- Product Development: "Our focus remains on expanding our TRUFORMA diagnostic platform. We see a significant growth opportunity particularly in the liquid biopsy market, which answers unmet needs in veterinary oncology."
- Challenges in Scaling: "While we experienced better revenue, our operational expenses grew significantly due to expanded marketing outreach and R&D initiatives. However, we believe these investments will pay off as we broaden our market presence."
- Market Trends: "The evolving landscape in pet care diagnostics is driving demand for our products, and we are committed to delivering innovative solutions that clinicians need."
Management painted a picture of a company at a critical growth juncture, strategizing on both product innovation and market engagement.
"While we experienced better revenue, our operational expenses grew significantly due to expanded marketing outreach and R&D initiatives. However, we believe these investments will pay off as we broaden our market presence."
— Zomedica CEO
"Our focus remains on expanding our TRUFORMA diagnostic platform. We see a significant growth opportunity particularly in the liquid biopsy market, which answers unmet needs in veterinary oncology."
— Zomedica CEO
Forward Guidance
Zomedica's management reiterated its commitment to investing in R&D to enhance product offerings and operational capabilities. Specific targets include:
- **Revenue Goal**: Management aims for revenue to exceed $30 million in the next fiscal year, fueled by continued rollout of new products and enhanced market penetration strategies.
- **Cost Management**: The intent to streamline operational expenses remains a core focus, with projections to reduce SG&A expenses by up to 15% by the end of FY 2026.
- **Market Expansion**: Anticipation of expanding into new geographic markets, particularly in regions showing significant growth in pet ownership and veterinary care spending. Investors should monitor the rollout progress of its TRUFORMA platform, as well as the outcomes from recent product launches.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
ZOM Focus
70.27%
-1.03%
-3.68%
-4.09%
TLRY
27.50%
-8.96%
-0.92%
-11.25%
ACB
75.90%
4.67%
-3.11%
-4.32%
CGC
10.70%
-26.50%
-45.30%
-11.10%
HEXO
-84.20%
-2.58%
-32.00%
-50.56%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Overall, Zomedica Corp portrays a mixed investment outlook. The company is showcasing resilience with revenue growth in Q4 2025; however, the persistent losses present a concern. The high liquidity underscores the potential for recovery, supported by emerging opportunities in veterinary diagnostics. Investors should closely follow management’s effectiveness in translating R&D investments into marketable products. With a focus on cost management and product innovation, Zomedica is well-positioned to capture growth opportunities in a niche but expanding market.
Key Investment Factors
Growth Potential
Zomedica Corp is positioned to benefit from the increasing spending in pet healthcare and diagnostics driven by rising pet ownership and demand for comprehensive veterinary services. The company’s focus on innovative products keeps it ahead in a rapidly evolving market.
Profitability Risk
The primary risks include constrained profitability margins, reliance on successful product launches, and potential challenges in managing operational expenses. The competitive landscape in veterinary diagnostics could also create pricing pressures.
Financial Position
Zomedica maintains a solid balance sheet with a current ratio of 8.76, indicating strong liquidity. However, operating losses could weigh on future cash flow unless corrective measures are taken quickly.
SWOT Analysis
Strengths
Strong product offering with TRUFORMA and PulseVet equipment
High gross profit margins indicating effective pricing strategy
Robust balance sheet with strong liquidity ratios
Weaknesses
Ongoing operating losses may deter potential investors
High R&D and operational costs affecting net income
Limited product diversification compared to larger competitors
Opportunities
Market growth in veterinary diagnostics driven by increasing pet healthcare spending
Expansion potential into under-served geographic markets
Innovative product pipeline in development
Threats
Intense competition from established players in veterinary diagnostics