Key Takeaways
CVD Equipment Corporation’s revenue plunged 70.9% in the first quarter of 2026, as lower system bookings led to a wider net loss and overshadowed an increase in new orders.
“Our bookings for our business continue to be affected by several factors, including geopolitical uncertainty, reduced U.S. government funding for universities and a slower pace of adoption of our solutions in certain end markets,” Chief Executive Officer Emmanuel Lakios said on the earnings call.
The company reported first-quarter revenue from continuing operations of $1.8 million, down from $6.3 million a year earlier. The net loss from continuing operations widened to $1.7 million, or 25 cents per share, from $229,000, or 3 cents per share, in the same period last year. Gross margin contracted to 8% from 27.4% a year ago.
Shares of CVD Equipment have fallen 12.7% since the May 14 report. The results highlight the impact of a strategic overhaul that includes outsourcing fabrication and reducing headcount, which is expected to lower annual operating costs by $1.8 million in 2026.
Despite the steep revenue decline, the company saw orders rise to $1.8 million from $0.8 million in the prior-year quarter, driven by higher demand for spare parts. The company’s backlog remained flat at $4.7 million as of March 31, 2026, compared to the end of the previous quarter.
A key development during the period was the sale of the company's Stainless Design Concepts (SDC) business to Atlas Copco, which closed on April 1, 2026. The transaction brought in net cash proceeds of $14.8 million, boosting CVD Equipment’s cash position to approximately $23 million and eliminating all long-term debt. An additional $900,000 was placed in escrow.
Management confirmed the company will retain ownership of its Saugerties, New York facility, which is being leased to Atlas Copco for an initial two-year term.
During the earnings call, Lakios noted that while the company is seeing a higher rate of requests for quotations (RFQs) compared to 2025, the conversion of these inquiries into firm orders can take several quarters. He specifically addressed the market for silicon carbide equipment, noting that a flood of lower-cost wafers from Chinese vendors has "deflated the PVT market," making it economically challenging for U.S. wafer producers to expand and purchase new equipment.
The company's revenue remains highly concentrated, with three customers accounting for 66% of total revenue in the first quarter.
The sharp revenue drop and wider loss underscore the challenges facing CVD Equipment as it navigates a difficult market. The successful divestiture provides significant financial flexibility, but a return to profitability depends on converting its pipeline into tangible orders. Investors will be watching for signs of improved equipment order flow in the upcoming quarters.
This article is for informational purposes only and does not constitute investment advice.
