Nephros Reports Record Fiscal Year 2025 with 33% Revenue Growth and Second Consecutive Year of Profitability

Nephros, Inc. reported financial results for the fourth quarter and fiscal year ended December 31, 2025, marking a transformative period with record revenue and continued profitability. The water technology company achieved full-year net revenue of $18.8 million, representing a 33% increase compared to $14.2 million in 2024, while fourth-quarter revenue grew 22% to $4.7 million from $3.9 million in the same period last year. This performance resulted in net income of $1.2 million for the year, compared with $74,000 in 2024, marking the company's second consecutive year of positive net income.

President and Chief Executive Officer Robert Banks described 2025 as transformational for Nephros, attributing the success to execution of a disciplined strategy built around three growth pillars: Products, Service, and Education. The company's differentiated product portfolio drove meaningful revenue gains through continued expansion of reorder rates, deployment of additional sales associates, and growth beyond traditional healthcare applications. Nephros also extended its long-term supply agreement with key partner Medica, ensuring continuity of supply and supporting sustained multi-year growth.

The company advanced its service offering through expanded installation and replacement capabilities led by Director of Service Alfred Vargas, which reduced barriers to adoption and strengthened customer relationships. Additionally, Nephros launched the Nephros Water Institute under Director of Business Development Brianne McGuire, establishing the company as an authority in waterborne pathogen mitigation and facility water safety. This initiative expands engagement with customers and industry stakeholders while supporting long-term demand for filtration, service, and compliance-driven solutions.

Financial performance showed gross margin of 62% for both 2025 and 2024, though fourth-quarter 2025 gross margin decreased to 58% from 64% in the prior year period. This erosion was primarily due to the impact of tariffs, as the company has been subject to a 15% tariff on all goods imported from Italy since April 2025, which was reduced to 10% as of February 22, 2026. While this reduction provides some near-term relief, U.S. tariff policy remains unpredictable, creating uncertainty around potential future margin impacts.

Cost of goods sold increased 32% to $7.2 million for the year, while selling, general and administrative expenses rose 17% to $9 million due to increased bonuses and sales commissions. Research and development expenses grew to $1.3 million from $0.9 million in 2024, reflecting higher headcount and bonuses. Adjusted EBITDA for the year reached $1.6 million compared with $548,000 in 2024, while fourth-quarter Adjusted EBITDA was approximately $131,000 compared with $481,000 in the same period last year.

As of December 31, 2025, Nephros maintained a strong financial position with cash and cash equivalents of approximately $5.4 million, compared to $3.8 million as of December 31, 2024, and remains debt free. The company's integrated product, service, and education strategy has strengthened its competitive position and provides a durable foundation for continued growth and operational scale. More information about Nephros is available at nephros.com, while the latest news and updates relating to the company are available in its newsroom at https://tinyurl.com/nephnewsroom.