Nephros, Inc. reported financial results for the fourth quarter and fiscal year ended December 31, 2025, marking a period of substantial growth 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. Fourth-quarter net revenue reached $4.7 million, up 22% from $3.9 million in the same period last year.
The company reported net income of $1.2 million for the full year, compared with $74,000 in 2024, marking the second consecutive year of positive net income in Nephros' history. Adjusted EBITDA for 2025 was $1.6 million, a significant increase from $548,000 in the previous year. As of December 31, 2025, Nephros maintained a strong financial position with approximately $5.4 million in cash and cash equivalents, compared to $3.8 million at the end of 2024, while remaining debt-free.
President and CEO Robert Banks described 2025 as transformational for the company, attributing the performance to execution of a disciplined strategy built around three growth pillars: Products, Service, and Education. "Our differentiated product portfolio remains at the center of our success," Banks stated. The company noted continued expansion of reorder rates, deployment of additional sales associates, and growth beyond traditional healthcare applications as key drivers of revenue gains.
Nephros extended its long-term supply agreement with key partner Medica, ensuring continuity of supply and supporting sustained multi-year growth. The company also advanced its service offering through expansion of installation and replacement capabilities led by Director of Service Alfred Vargas. This development of in-house functions has reduced barriers to adoption, strengthened customer relationships, and increased opportunities for recurring revenue.
A significant milestone was the launch of the Nephros Water Institute, led by Director of Business Development Brianne McGuire, which establishes Nephros as an authority in waterborne pathogen mitigation and facility water safety. The Institute expands engagement with customers and industry stakeholders while supporting long-term demand for filtration, service, and compliance-driven solutions. More information about Nephros is available at https://nephros.com.
Financial performance details reveal gross margin remained steady at 62% for both 2025 and 2024, though fourth-quarter gross margin decreased to 58% from 64% in the same period last year. The company attributed margin erosion during the second half of fiscal 2025 primarily to tariff impacts. Since April 2025, Nephros has been subject to a 15% tariff on all goods imported from Italy, 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.
Selling, general and administrative expenses increased 17% to $9 million for the year, primarily due to higher bonuses and sales commissions. Research and development expenses grew to $1.3 million from $0.9 million in 2024, reflecting increased investment in innovation. The company's emergency response business showed solid growth alongside significant expansion in service revenue.
For business and technology leaders, Nephros' performance demonstrates how specialized technology companies can achieve sustainable growth through integrated strategies that combine product innovation with value-added services and educational initiatives. The company's focus on water filtration solutions addresses critical needs in healthcare and commercial markets, particularly as water safety concerns continue to gain prominence globally. The financial results suggest Nephros has established a durable foundation for continued growth and operational scale in an increasingly important sector of environmental technology.
The latest news and updates relating to Nephros are available in the company's newsroom at https://tinyurl.com/nephnewsroom. The company will host a conference call to discuss these financial results and provide a general business overview, with an audio archive available shortly after the call on the Nephros Investor Relations page.
