Nephros Reports Slight Revenue Decline but Achieves First Profitability in 2024

Nephros, Inc. reported a slight decline in total net revenues for the fiscal year ended December 31, 2024, totaling $14.2 million, down 1% from $14.2 million in 2023. The decrease was primarily attributed to a reduction in emergency response orders, which were unusually high in the previous year. However, the company noted a 9% increase in programmatic sales, driven by the efforts of newly hired sales personnel and the acquisition of new customer accounts. The gross profit margin improved to 62% from 59% in the prior year, reflecting more favorable terms with its largest supplier.

In terms of profitability, Nephros achieved a net income of $74,000 in 2024, marking its first profitable year since inception, compared to a net loss of $1.6 million in 2023. This turnaround was supported by a 14% reduction in selling, general, and administrative expenses, which fell to $7.7 million from $8.9 million. Research and development expenses increased slightly by 4% to $906,000, reflecting the company's ongoing commitment to product development.

Operationally, Nephros employed 31 full-time staff as of December 31, 2024, with a focus on sales, marketing, and customer support. The company has been expanding its distribution network, particularly after ending its exclusive relationship with Donastar LLC in September 2024. This strategic shift aims to enhance market reach and pursue additional national accounts in the commercial sector, which the company believes could lead to significant revenue growth.

Nephros continues to navigate challenges related to market acceptance of its products and the need for ongoing capital to support operations. As of December 31, 2024, the company reported an accumulated deficit of $144.3 million. Despite achieving profitability, Nephros acknowledged the potential for future operating losses and emphasized the importance of maintaining tight expense management and increasing product sales to ensure long-term sustainability.

Looking ahead, Nephros remains optimistic about its growth prospects, particularly in the commercial market, where it anticipates that water safety management programs will become more prevalent. The company plans to leverage its expertise in water filtration to capture a larger share of this expanding market. Nephros believes that its current cash balances will be sufficient to fund operations for at least the next 12 months, although it may need to take further actions to reduce discretionary expenditures if market conditions do not improve.