CSP (CSPI) Inc. Stock: Drops 16.98%, Despite Impressive Q4 Revenue Growth

TLDR

• CSP Inc. reports 11% Q4 revenue growth, driven by cybersecurity expansion.
• CSP Inc. sees 63% surge in services revenue despite stock price drop.
• CSP Inc. improves margins and reduces net loss in fiscal Q4 2025.
• CSP Inc. continues strong growth, focusing on technology and cybersecurity.
• CSP Inc. boosts services revenue and strategic partnerships in Q4 2025.

CSP Inc. (CSPI) stock experienced a significant decline of 16.98%, falling to $12.42 as of 10:59 AM EST.

CSP Inc., CSPI

Despite this drop, the company reported strong growth for the fiscal fourth quarter ended September 30, 2025. Total revenue increased by 11% compared to the same period last year, driven by a 63% surge in services revenue. CSP Inc. continues to expand its operations and offerings, particularly in the cybersecurity space, with notable achievements during the quarter.

Q4 Revenue Growth and Profit Margins

For the fiscal fourth quarter, CSP Inc. reported revenue of $14.5 million, an 11% increase from the previous year’s $13 million. This growth was primarily attributed to a substantial rise in services revenue, which makes up 44% of total revenue. Gross profit for the quarter increased to $5.3 million, compared to $3.7 million a year ago, with gross margins rising by 9% to 37%.

The higher proportion of services revenue, which carries a better gross margin, contributed significantly to this improvement. CSP Inc. also noted a sharp reduction in its net loss, which decreased to $191,000, or $0.02 per share. This compares favorably to the net loss of $1.7 million, or $0.18 per share, reported in the fourth quarter of the previous fiscal year. These results reflect the company’s ability to improve both top-line growth and bottom-line performance.

Growth in Technology Solutions and Strategic Partnerships

CSP Inc. saw continued growth in its Technology Solutions (TS) division, which recorded an 11% increase in revenue for both the fiscal fourth quarter and full year. This growth was fueled by expanding existing customer relationships and gaining new customers, particularly in managed services and cloud-based solutions. The company is also making strides in its cybersecurity offerings, with the AZT PROTECTTM solution showing increased customer engagement.

One of the standout developments in Q4 was the integration of AZT PROTECTTM with Acronis’ Cyber Protect Solution. The partnership enhances the value of CSP Inc.’s cybersecurity platform, expanding its market reach. Furthermore, the company’s largest AZT PROTECT customer, a global pharmaceutical company, renewed its annual support contract in a deal worth six figures. CSP Inc. believes that these relationships, combined with new customer gains, will drive further growth in fiscal 2026.

Fiscal Year 2025 Performance and Future Outlook

For the full fiscal year 2025, CSP Inc. reported a 6% increase in revenue, totaling $58.7 million, up from $55.2 million in 2024. Gross profit for the year stood at $18.5 million, or 32% of sales, slightly down from $18.9 million in the previous year. The company’s net loss for the fiscal year was $91,000, or $0.01 per share, a significant improvement compared to the $326,000 net loss, or $0.04 per share, reported in fiscal 2024.

CSP Inc. has also maintained a solid balance sheet, with $27.4 million in cash and cash equivalents as of September 30, 2025. The company remains well-positioned to invest in growth strategies, especially for its AZT PROTECT solution. CSP Inc. repurchased approximately 19,500 shares during the quarter for a total cost of $234,000. With continued expansion in its technology services and cybersecurity offerings, CSP Inc. remains optimistic about achieving further growth in fiscal 2026.

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