EnWave Corporation

Q3 revenue was $3.3 million, up $569 thousand or 21% year over year from $2.7 million. Gross margin was 25% versus 19% a year ago, and adjusted EBITDA loss improved to $93 thousand from a $575 thousand loss. Base royalty revenue was $536 thousand, up $104 thousand or 24% from $432 thousand, but included a one-time $60 thousand adjustment related to MicroDried. The company ended Q3 with $2.5 million in cash and cash equivalents, $7.1 million in net working capital, and $1.9 million drawn on a Desjardins credit facility with $360 thousand undrawn availability. Management guided to roughly $3 million of royalties in fiscal 27 and said it expects to reduce the expense base to about $3.5 million, with more than $1 million of expense reduction targeted by fiscal 28.

Brent Charleton framed the quarter as a turning point after two weaker quarters, emphasizing that EnWave is shifting from building interest to converting the pipeline into equipment sales and recurring royalties. He stressed four priorities: converting commercial opportunities, expanding the installed base, growing recurring royalty revenue, and building relationships with large food companies. His tone was upbeat and confident, with repeated comments that the business is moving toward scale and that several material opportunities are now closer to decision points.

Nav Dhami highlighted the core financial improvement in Q3: revenue of $3.3 million, gross margin of 25%, SG&A including R&D of $1.2 million, and a narrowed adjusted EBITDA loss of $93 thousand. She also pointed to balance sheet details, including $2.5 million of cash and cash equivalents, $7.1 million of net working capital, and a Desjardins facility with $1.9 million drawn. Inventory increased to $3 million from $1.4 million at year end because the company was manufacturing a 100-kilowatt nutraREV machine and two small-scale machines that were about 90% complete.

Analysts focused on whether the planned expense cuts, combined with expected royalty growth, could bring royalties close to covering cash operating costs; management said it wants to get there faster and expects base expenses to come down to about $3.5 million. Questions also centered on where blue-chip CPG interest is coming from and what the sales cycle looks like; Brent said the opportunities are mainly in pet and human CPG, mostly North American launches, and typically take 1 to 1.5 years of development. On delayed machine deals, management said three large opportunities are still active and that delays were due to changed facility plans, product-launch timing, or customers waiting for enough business success to justify capex.