Nephros, Inc. reported financial results for the fourth quarter and fiscal year ended December 31, 2025, marking significant growth and sustained profitability. The water technology company's performance demonstrates the increasing demand for filtration solutions in healthcare and commercial markets, with implications for water safety standards and business resilience in regulated industries.
Full-year net revenue increased 33% year-over-year to $18.8 million, while fourth-quarter revenue rose 22% to $4.7 million. The company achieved net income of $1.2 million for the year, representing its second consecutive year of positive net income. According to President and CEO Robert Banks, "2025 was transformational for Nephros. We delivered 33% revenue growth following a record year in 2024 and we achieved the highest revenue in a quarter in our history."
The company attributes its success to a three-pillar strategy focusing on products, service, and education. Product expansion included higher reorder rates, additional sales associates, and growth beyond traditional healthcare applications. Nephros also extended its long-term supply agreement with key partner Medica, ensuring continuity of supply. Service capabilities expanded under Director of Service Alfred Vargas, with in-house installation and replacement functions reducing adoption barriers and strengthening customer relationships.
A significant development was the launch of the Nephros Water Institute, led by Director of Business Development Brianne McGuire. This initiative positions Nephros as an authority in waterborne pathogen mitigation and facility water safety, expanding 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.
Despite revenue growth, the company faced margin pressures from tariffs. Since April 2025, Nephros has been subject to tariffs on goods imported from Italy, initially at 15% and reduced to 10% as of February 22, 2026. Gross margin for the fourth quarter was 58%, compared with 64% in the same period last year, with tariffs cited as a primary factor. The company noted that "U.S. tariff policy remains unpredictable, creating uncertainty around potential future margin impacts."
Financial details show cost of goods sold increased 32% for the year to $7.2 million, while selling, general and administrative expenses rose 17% to $9 million due to increased bonuses and sales commissions. Research and development expenses grew to $1.3 million from $0.9 million, reflecting higher headcount and bonuses. Adjusted EBITDA for the year was $1.6 million, compared with $0.5 million in 2024. The company ended the year with $5.4 million in cash and cash equivalents, remaining debt-free.
This financial performance matters because it signals growing market acceptance of specialized water filtration technology amid increasing concerns about water safety and regulatory compliance. For industries ranging from healthcare to commercial facilities, Nephros's integrated approach offers solutions for both proactive water management and emergency response situations. The company's educational initiatives through the Nephros Water Institute could influence industry standards and practices, potentially creating new market opportunities while addressing public health concerns related to waterborne pathogens.
The company's forward-looking statements acknowledge risks including dependence on emergency response sales, U.S. tariff and trade policy, inflationary factors, and regulatory reforms. These factors are detailed in Nephros's reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2025. Investors can access additional information through the company's newsroom at https://tinyurl.com/nephnewsroom.
