Nephros revenue jumps 18% to $5.6 million in third quarter
Key Facts
Nephros reported results on Nov. 5 for the third quarter ended Sept. 30, 2026, with net revenue of $5.6 million, up 18% from $4.8 million in the same period last year. The company said in a statement published via GlobeNewswire that revenue growth came from higher product and service revenue. Net income rose to $512,000 from $337,000 a year earlier. Adjusted EBITDA also rose to $558,000 from $418,000. The results show sales and profit growth alongside a decline in gross margin.
Nephros said core program revenue grew 8% compared with the third quarter of 2025, alongside significant growth in emergency response revenue and higher service revenue. The core program represents product sales, which the company described as the source of revenue growth during the quarter. The company also said service revenue increased, without providing a separate figure for the increase. Core program growth stands out in the quarterly results, following a 19% increase in its revenue during the first nine months of the year. The company attributed that nine-month revenue growth to reorder activity and the addition of new active locations.
Revenue growth was accompanied by a decline in gross margin to 58% from 61% in the third quarter last year, a drop of nearly 3 percentage points. The company attributed the decline mainly to higher costs for shipping and handling inventory, including tariffs. Higher service revenue also weighed on the margin, as the company said its margins are lower than those on product sales. Cost of goods sold rose 26% to $2.3 million from $1.8 million in the comparable period. This puts higher costs of goods and shipping alongside quarterly growth in revenue and net income.
For the nine months ended Sept. 30, net revenue was $16.9 million, up 20% from $14.1 million in the same period of 2025. Core program revenue rose 19% during the period, according to the company’s statement. Nephros said reorder activity and the addition of new active locations supported program growth. The nine-month figures provide a longer-term context than the quarterly results alone, covering revenue performance from the start of the year through the end of September. In the second quarter, the company had reported record quarterly revenue of $6.0 million, up 36% year over year.
The company added about 31 new customer locations during the third quarter, bringing active locations to a record 1,766. Nephros said healthcare locations accounted for about 64% of the new locations, while about 17% came from the commercial and industrial sectors. The company said healthcare remains at the core of its business as it continues to add customers in other sectors. These figures reflect the expansion of its active-location base and the distribution of new additions across sectors. The statement did not specify the share of other sectors among locations added during the quarter.
Cash and cash equivalents totaled $4,546 thousand on Sept. 30, 2026, compared with $5,400 thousand on Dec. 31, 2025, according to figures presented by the company in thousands of dollars. Nephros said it carries no debt. The CEO also said trailing 12-month revenue exceeded $21 million as the company entered the final quarter of 2026. These indicators were part of an earnings disclosure covering quarterly performance, year-to-date revenue growth and liquidity at the end of September. The company had reported revenue of $6.0 million in the second quarter, a level it described as a record.
Nephros held its earnings call on Nov. 5 at 4:30 p.m. Eastern time and said a replay would remain available through Nov. 12, 2026. In trading, EL7 data showed NEPH closing at $3.25 on Nov. 4 and then at $3.09 on Nov. 5, the day results were announced. The prices reflect the closes of the two sessions surrounding the announcement. The statement did not explain the stock’s move between the sessions. The call and replay schedule placed management’s discussion of the quarterly results among the events of announcement day.