CPS Technologies Reports 24% Revenue Decline to $21.1 Million for Fiscal Year 2024

CPS Technologies Corp. reported a total revenue of $21.1 million for the fiscal year ending December 28, 2024, marking a 24% decrease from $27.6 million in the previous year. This decline was primarily attributed to the completion of a significant armor contract in April 2024, which had contributed to revenue throughout 2023. The company's gross profit for 2024 was a loss of $0.1 million, or -1% of sales, compared to a gross profit of $6.8 million, or 25% of sales, in 2023. The decrease in gross margin was largely due to fixed operational costs being spread over a reduced revenue base, alongside increased expenses related to ramping up production for AlSiC baseplates.

In terms of operational metrics, CPS Technologies reported an operating loss of $4.4 million in 2024, a significant decline from an operating income of $1.7 million in 2023. The net loss for the year was $3.1 million, compared to a net income of $1.4 million in the prior year. Selling, general, and administrative expenses decreased to $4.3 million from $5.1 million, primarily due to reduced variable compensation expenses linked to lower revenue and profit levels. The company’s cash and cash equivalents decreased to $3.3 million from $8.8 million at the end of 2023, reflecting the impact of operational losses.

CPS Technologies continues to focus on strategic developments, including its participation in the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs, which have led to funding for innovative research and development projects. The company has also entered into a licensing agreement with Triton Systems for Fiber Reinforced Aluminum (FRA), which is expected to enhance its product offerings in the future. The company’s backlog stood at $26 million as of December 28, 2024, primarily consisting of orders scheduled for shipment in 2025.

The company’s customer base remains concentrated, with three customers accounting for 57% of total revenue in 2024, down from 60% in 2023. CPS Technologies serves a diverse range of markets, including transportation, automotive, energy, and defense, and is positioned to benefit from the growing demand for advanced material solutions. The company reported that approximately 70% of its revenue in 2024 was derived from commercial applications, while 30% came from defense-related applications.

Looking ahead, CPS Technologies management expressed optimism about the potential for sustained growth, citing a diversified customer base and ongoing opportunities for new product development. The company believes that its business model, which focuses on providing advanced material solutions across various high-growth markets, positions it well for future success. However, the company also acknowledged the challenges posed by a highly concentrated customer base and the lengthy sales cycles associated with its products, which could impact financial forecasting and operational stability.