Nephros (NEPH) investor relations material

Executive summary

• Achieved record Q2 2026 net revenue of $6 million, a 36% year-over-year increase, driven by programmatic and service revenue growth.

• Net income for Q2 2026 rose to $1.2 million from $0.2 million in Q2 2025, reflecting improved margins and a one-time $0.6 million tariff refund.

• Revenue for the first six months of 2026 increased 21% to $11.2 million, with strong multi-channel and recurring revenue growth.

• The company is evolving into an integrated water safety platform, emphasizing products, services, and education, and operates as a single segment focused on high-performance water filtration.

• Recent product launches and expanded service offerings contributed to growth and market expansion.

Financial highlights

• Q2 2026 net revenue: $6 million (up from $4.4 million in Q2 2025); gross margin: 67% (up from 63%), aided by a $0.6 million tariff refund.

• Net income for Q2 2026 increased over 400% to $1.2 million; adjusted EBITDA up 260% to $1.3 million.

• Six-month net income rose 68% to $1.3 million; adjusted EBITDA up 46% to $1.5 million.

• Ended Q2 2026 with $4.7 million in cash and no debt; working capital increased to $10.3 million.

• Q2 2026 EPS (basic and diluted): $0.11; six-month EPS: $0.12.

Outlook and guidance

• Management expects continued sustainable growth, driven by core programmatic revenue, service expansion, and new product adoption.

• New products addressing PFAS, microplastics, and nanoplastics are anticipated to contribute more in future quarters as market education and regulatory drivers increase.

• Margin improvement remains a focus, with ongoing efforts in pricing, sourcing, and operational efficiency.

• Management expects sufficient liquidity to fund operations for at least the next 12 months, with a focus on revenue growth and expense control.

• Cautious optimism expressed regarding broader economic environment.