Executive Summary
Cavitation Technologies Inc. (CVAT) reported Q3 2025 results with a minimal revenue base of $122,000 and a sizable operating burn. Gross profit stood at $97,000, yielding a robust gross margin of 79.50%, but operating expenses dominated the P&L, producing an EBITDA of -$228,000 and a net loss of -$230,000. The quarterly performance shows a material YoY deterioration in revenue and profitability metrics (revenue down 76.5% YoY; net income down 169% YoY), while a QoQ improvement in revenue of 60.5% from the prior quarter is noted. The company’s balance sheet remains liquidity-positive on a net cash basis, but cash burn from operations (~$248,000) and a tiny revenue run-rate raise sustainability concerns absent additional monetization of Cavitation’s technology platform.
Looking forward, CVAT did not publish explicit guidance in the QQ3 2025 filing. Management commentary would be essential to gauge expectations for commercialization of Nano Reactor and related systems, potential licensing deals, and expansion into adjacent markets (renewable fuels, water treatment, wines/spirits, algae). The near-term investment thesis hinges on (1) converting research and engineering leverage into commercial deployments, (2) achieving meaningful revenue scale to absorb fixed costs, and (3) preserving liquidity to weather a prolonged top-line recovery. Investors should monitor operating cost control, product/market traction, and any material licensing or collaboration announcements that could lift recurring revenue while reducing cash burn.
Key Performance Indicators
QoQ: 60.53% | YoY:-76.49%
QoQ: 53.97% | YoY:-81.05%
QoQ: 23.75% | YoY:-168.47%
QoQ: -139.72% | YoY:-169.49%
QoQ: -140.00% | YoY:-166.67%
Key Insights
Revenue: $122,000; Cost of Revenue: $25,000; Gross Profit: $97,000; Gross Margin: 79.50% (YoY: -81.05%; QoQ: +53.97%)
R&D Expenses: $42,000; General & Administrative Expenses: $283,000; Operating Expenses: $325,000; EBITDA: -$228,000; EBIT: -$228,000; Interest: -$2,000; Net Income: -$230,000; Earnings per Share (Diluted): -$0.0008
Liquidity & Cash Flow: Cash & Equivalents end of period $432,000; Net cash provided by operating activities -$248,000; Net change in cash -$249,000; Ca...
Financial Highlights
Revenue: $122,000; Cost of Revenue: $25,000; Gross Profit: $97,000; Gross Margin: 79.50% (YoY: -81.05%; QoQ: +53.97%)
R&D Expenses: $42,000; General & Administrative Expenses: $283,000; Operating Expenses: $325,000; EBITDA: -$228,000; EBIT: -$228,000; Interest: -$2,000; Net Income: -$230,000; Earnings per Share (Diluted): -$0.0008
Liquidity & Cash Flow: Cash & Equivalents end of period $432,000; Net cash provided by operating activities -$248,000; Net change in cash -$249,000; Cash at beginning of period $681,000; Net debt: -$296,000 (net cash position)
Balance Sheet: Total Assets $576,000; Total Liabilities $277,000; Total Stockholders’ Equity $299,000; Current Ratio 3.77; Quick Ratio 3.77; Cash Ratio 2.88; Asset Turnover 0.212; Revenue run-rate is critically small, causing material leverage of fixed costs and resulting in negative earnings despite a healthy gross margin.
Key YoY/QoQ trends: Revenue YoY -76.49%, QoQ +60.53%; Gross Profit YoY -81.05%, QoQ +53.97%; Operating Income YoY -168.47%, QoQ +23.75%; Net Income YoY -169.49%, QoQ -139.72%; EPS YoY -166.67%, QoQ -140.00%.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
122.00K |
-76.49% |
60.53% |
| Gross Profit |
97.00K |
-81.05% |
53.97% |
| Operating Income |
-228.00K |
-168.47% |
23.75% |
| Net Income |
-230.00K |
-169.49% |
-139.72% |
| EPS |
0.00 |
-166.67% |
-140.00% |
Key Financial Ratios
operatingProfitMargin
-186.9%
operatingCashFlowPerShare
$-0
Management Commentary
Note: No earnings call transcript data is provided in the supplied information. The following highlights reflect likely themes if a call were available and are framed as guidance for interpretation unless quotes are provided:
- Strategy and technology monetization: Discussion would likely center on scaling Nano Reactor deployments, licensing opportunities, and expansion into additional markets (renewable fuels, water treatment, wine/spirits enhancement, algae processing). Signposts to watch include signed pilots, LOIs, or strategic partnerships.
- Operational efficiency: Management commentary would assess cost-control measures, R&D-to-revenue productivity, and potential headcount or SG&A rationalization to move toward breakeven as revenue scales.
- Market conditions and adoption: Commentary on customer demand cycles, regulatory considerations, and competitive dynamics in the industrial machinery segment that could influence adoption timelines for CVAT’s cavitation-based systems.
Forward Guidance
No explicit forward guidance was disclosed in the QQ3 2025 filing. Given the ultra-low current revenue base and a meaningful operating burn, the plausible path to improved profitability will depend on: (1) securing commercial deployments or long-term licensing agreements for Nano Reactor and related systems, (2) achieving revenue scale sufficient to absorb fixed costs, and (3) continuing cost discipline across R&D and G&A. Industry-wide catalysts to monitor include progressive commercialization milestones, pilot-to-contract transitions, and partnerships that de-risk capital expenditure for customers.
Critical factors to monitor: (i) new customer wins or pilots converting to recurring revenue, (ii) expected cadence of revenue recognition from licensing or technology deployment, (iii) any one-time non-operating income items that could distort quarterly profitability (as observed in prior quarters), and (iv) liquidity runway given the current burn rate. If management targets breakeven or positive EBITDA within the next 4-8 quarters, a meaningful re-rating could be possible contingent on demonstrated revenue scale and durable gross margins.