Nephros, Inc.

Nephros reported second-quarter 2026 net revenue of $6 million, up 36% from $4.4 million in Q2 2025, and up about 15% sequentially from Q1. Gross margin was approximately 67% versus 63% in the prior-year quarter. Net income increased to approximately $1.2 million from $237,000, and adjusted EBITDA rose to approximately $1.3 million from $355,000. For the first half of 2026, revenue increased 21% to approximately $11.2 million from $9.3 million, gross margin was approximately 63% versus 64%, net income was $1.3 million versus $800,000, and adjusted EBITDA was $1.5 million versus $1 million. Cash was approximately $4.7 million at June 30, 2026, versus $4 million at March 31, 2026, and the company remained debt-free. Management did not provide formal next-quarter or full-year financial guidance; instead, it highlighted continued focus on expanding the installed base, growing services and replacement activity, improving underlying margins, and building awareness of newer products and markets.

Robert Banks framed the quarter as a major inflection point, calling it an exceptional quarter and saying the company is in the strongest position in its history. He emphasized that growth is coming from three pillars—products, services and education—and said Nephros is becoming an integrated water safety platform, not just a filter company. He also said the business is growing across multiple channels and is more durable because it is not dependent on a single product, geography or revenue source. His tone was upbeat but tempered on margins, acknowledging tariff and cost pressures while stressing execution and long-term growth investments.

Judy Krandel provided the detailed financial bridge, citing $6 million of Q2 revenue, a 36% increase, and gross margin of about 67% versus 63% last year. She explained that gross profit benefited from a roughly $600,000 tariff refund, with about $0.5 million relating to prior-period inventory and only about $100,000 tied to current-quarter sales; she also noted that the weaker U.S. dollar versus the euro, higher shipping expense and lower-margin service growth weighed on margin. R&D rose about $366,000, or 18%, SG&A was about $2.4 million, up 10%, and net cash provided by operations was $681,000 in Q2 versus $994,000 last year. For the first half, she cited $11.2 million of sales, 63% gross margin, $1.3 million of net income, $1.5 million of adjusted EBITDA, and $4.7 million of cash with no debt.

Analysts pressed for how much of the upside came from new products versus the core business, and management said the new PFAS/microplastics products have not yet gained traction and are more likely to contribute in future quarters after education and trials. On the revenue mix, management said growth was broad-based and mainly came from existing sites and customers rather than a surge in new customers, and that emergency response revenue was steady and not especially notable. A follow-up on services and education asked whether those are now durable revenue streams; management said installation and replacement services are intended to continue growing, while education is currently a demand-generation tool and not yet a monetized revenue stream. A Trinity Health customer also praised the company’s education and support, reinforcing management’s view that the service model is resonating.