Nephros Announces Strong Third Quarter Financial Results; Achieving Highest Level of Programmatic Sales in Company History

Third-Quarter Net Revenue of $4.8 million; Robust Growth Drives 35% Increase in Net Revenue and Fourth Consecutive Quarter of Profitability SOUTH ORANGE, NJ., Nov. 06, 2025 (GLOBE NEWSWIRE) -- Nephros, Inc. (Nasdaq: NEPH), a leading water technology company providing filtration solutions to the medical and commercial markets, today announced financial results for the third quarter ended September 30, 2025. Financial Highlights Net revenue increased 35% to $4.8 million compared to $3.5 million in the third quarter of 2024Net income increased 84% to $337,000, compared to $183,000 in the third quarter of 2024Adjusted EBITDA increased 42% to $418,000, compared to $295,000 in the third quarter of 2024 For the nine months ended September 30, 2025: Net revenue increased 37% to $14.1 million, compared to $10.3 million in the same period of 2024Net income was $1.1 million, compared to a net loss of ($275,000) in the same period of 2024Adjusted EBITDA was $1.4 million, compared to $67,000 in the same period of 2024 “Q3 2025 marks another powerful milestone—delivering not only continued profitability but achieving the highest level of programmatic sales in company history,” said Robert Banks, President and Chief Executive Officer of Nephros. “This performance is a direct result of our strategic focus on the execution of customer-centered initiatives. By expanding our series of educational webinars, on-site training, and field installation and replacement capabilities, we helped facilities achieve stronger results from their water treatment programs. Collectively, these efforts created sustainable value for both our customers and company.” “It’s an energizing time at Nephros as we are also seeing the impact of our recent investments in innovation,” Banks continued. “In the third quarter, we finalized development and market preparation for our new PFAS filtration solution, which officially launched in early October. This latest release positions Nephros to expand into new markets where water quality is critical and regulatory standards drive action. In parallel, the same customer-centered initiatives that strengthened our programmatic business also supported expansion in the number of active sites across all key segments—infection control, dialysis, and commercial. These results provide further evidence that our approach resonates with customers seeking reliable support, who value both product quality and consistent high performance.” Mr. Banks concluded, “With strong cash reserves, zero debt, and a robust innovation pipeline, we remain confident that Nephros is well-positioned to sustain growth, broaden our market reach, and deliver durable value in the quarters ahead.” Financial Performance for the Quarter Ended September 30, 2025Net revenue for the three months ended September 30, 2025, and 2024 was $4.8 million and $3.5 million, respectively, an increase of 35%. Our core programmatic revenue grew by 51% over the same period in 2024. The increase in programmatic sales reflects strong reorders, a number of new active sites and significant growth in our service revenue. Cost of goods sold for the third quarter of 2025 was $1.9 million, compared with $1.4 million in the third quarter of 2024, an increase of 35%. Gross margin for the third quarter of 2025 was 61%, consistent with 61% in the third quarter of 2024. Selling, general and administrative expenses for the third quarter of 2025 were approximately $2.2 million, compared with $1.7 million in 2024, an increase of 30% due to higher sales commissions resulting from increased revenue, and higher accrual for employee bonuses. Research and development expenses were approximately $0.3 million for the third quarter of 2025, compared with $0.2 million reported in the third quarter of 2024, an increase of 80% due to higher accrual for employee bonuses and higher salary expense. Depreciation and amortization expenses were approximately $34,000 for the third quarter of 2025, consistent with approximately $34,000 in the third quarter of 2024. As a result of the improved sales, net income for the third quarter of 2025 was $0.3 million, compared with $0.2 million during the same period in 2024, marking four consecutive quarters of net income in the Company’s history. Adjusted EBITDA for the third quarter 2025 was approximately $0.4 million, compared with approximately $0.3 million in the third quarter of 2024. Financial Performance for the Nine Months Ended September 30, 2025Net revenue for the nine months ended September 30, 2025, and 2024 was $14.1 million, and $10.3 million respectively, an increase of 37%. This increase was primarily driven by increased revenue in both programmatic and emergency response. Our core programmatic revenue grew by 35% over the same period in 2024. The increase in programmatic sales reflects strong reorders, and a number of new active sites. We also saw significant growth in our service revenue. Cost of goods sold for the nine months ending September 30, 2025, and 2024 was $5.2 million and $4 million, respectively, an increase of 28%. Gross margin for the nine months ended September 30, 2025, was 63%, compared with 61% during the same period in 2024. The increase in gross margin was primarily driven by lower product costs resulting from a more favorable product mix and a reduction in inventory reserve adjustments. Selling, general and administrative expenses for the nine months ended September 30, 2025, and 2024 were approximately $6.7 million and $5.8 million, respectively, an increase of 15% primarily driven by higher sales commission expense, increased employee bonus accruals, and higher stock-based compensation expense. Research and development expenses for the nine months ending September 30, 2025, and 2024 were $0.9 million and $0.7 million, respectively, an increase of 44% primarily due to higher accrual for employee bonuses and higher salary expense. Depreciation and amortization expenses for the nine months ending September 30, 2025, and 2024 were approximately $108,000, and $101,000 respectively. As a result of the improved sales and gross margins, net income for the nine months ending September 30, 2025, was $1.1 million compared to a net loss of ($0.3 million) during the same period in 2024. Adjusted EBITDA for the nine months ending September 30, 2025, was approximately $1.4 million, compared with approximately $0.1 million in the same period of 2024. As of September 30, 2025, Nephros had cash and cash equivalents of approximately $5.2 million, compared to $3.8 million as of December 31, 2024, and remains debt free. Adjusted EBITDA Definition and Reconciliation to GAAP Financial MeasuresAdjusted EBITDA is calculated by taking net income (loss) calculated in accordance with generally accepted accounting principles (“GAAP”) and excluding all interest-related expenses and income, tax-related expenses and income, non-recurring expenses and income, and non-cash items, including depreciation, amortization, non-cash inventory write-offs, and non-cash compensation. The following tables present a reconciliation of Adjusted EBITDA to net income (loss), the most directly comparable GAAP financial measure, for the third quarter and year-to-date period of the 2025 fiscal year: (unaudited) Three Months Ended September 30, 20252024 (in $ thousands) Net income337 183 Adjustments: Depreciation of property and equipment12 12 Amortization of other assets22 21 Interest expense- - Interest income(41)(20)Income taxes3 - Non-cash stock-based compensation70 65 Non-cash inventory impairments15 34 Adjusted EBITDA Income418 295 (unaudited) Nine Months Ended September 30, 20252024 (in $ thousands) Net Income (loss)1,132 (275) Adjustments: Depreciation of property and equipment42 34 Amortization of other assets65 68 Interest expense1 1 Interest income(85)(66)Income taxes12 - Non-cash stock-based compensation217 91 Non-cash inventory impairments56 214 Adjusted EBITDA Income1,440 67 Adjusted EBITDA Income (loss) Nephros believes that Adjusted EBITDA provides useful information to management and investors regarding certain financial and business trends relating to Nephros’ financial condition and results of operations. Management does not consider Adjusted EBITDA in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of Adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recognized in Nephros’ financial statements. In addition, Adjusted EBITDA is subject to inherent limitations as it reflects the exercise of judgments by management about which expenses and income are excluded or included in determining Adjusted EBITDA. To compensate for these limitations, management presents Adjusted EBITDA in connection with net income (loss), the most directly comparable GAAP financial measure. Nephros urges investors to review the reconciliation of Adjusted EBITDA to net income (loss) and not to rely on any single financial measure to evaluate the business. About NephrosNephros is committed to improving the human relationship with water through leading, accessible technology. We provide innovative water filtration products and services, along with water-quality education, as part of an integrated approach to water safety. Nephros goods serve the needs of customers within healthcare and commercial markets, offering both proactive and emergency solutions for water management. For more information about Nephros, please visit nephros.com. Forward-Looking StatementsThis release contains forward-looking statements that are subject to various risks and uncertainties. Such statements include statements regarding Nephros’ expected future revenue growth and the timing of such growth, the extent to which Nephros’ customer installation and replacement programs will lead to increased product reorders and revenue, the extent to which Nephros’ operational activities and product innovations will lead to revenue growth, Nephros’ ability to continue realizing net income from its operations, the effect of new regulations on future revenue growth, the expected competitive advantages and anticipated impact of new product offerings, and other statements that are not historical facts, including statements that may be accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words. Actual results could differ materially from those described in these forward-looking statements due to certain factors, including Nephros’ ability to further develop its sales organization and realize increased revenues, the extent to which financial results based on emergency response sales can be outside Nephros’ control, the extent to which U.S. tariffs may increase our expenses, inflationary factors and other economic and competitive conditions, the availability of capital when needed, dependence on third-party manufacturers and researchers, and regulatory reforms. These and other risks and uncertainties are detailed in Nephros’ reports filed with the U.S. Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2024, which it may update in Part II, Item 1A – Risk Factors in its Quarterly Reports on Form 10-Q that it has filed or will file hereafter. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of this release, and Nephros does not undertake any responsibility to update any forward-looking statements that it makes, except as may be required by law. Investor Relations Contacts:Kirin Smith, PresidentPCG Advisory, Inc.(646) 823-8656ksmith@pcgadvisory.com Robert Banks, CEONephros, Inc.(201) 343-5202 x110robert.banks@nephros.com NEPHROS, INC. BALANCE SHEETS(In thousands, except share and per share amounts)(Unaudited) ASSETS September 30, 2025 December 31, 2024Current assets: Cash and cash equivalents $5,171 $3,760 Accounts receivable, net 2,661 1,781 Inventory 2,738 2,615 Prepaid expenses and other current assets 136 142 Total current assets 10,706 8,298 Property and equipment, net 119 161 Lease right-use-of assets 1,112 1,377 Intangible assets, net 326 349 Goodwill 759 759 License and supply agreement, net 175 216 Other assets 50 50 TOTAL ASSETS $13,247 $11,210 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 936 649 Accrued expenses 1,151 565 Current portion of lease liabilities 380 348 Total current liabilities 2,467 1,562 Lease liabilities, net of current portion 774 1,063 TOTAL LIABILITIES 3,241 2,625 STOCKHOLDERS' EQUITY: Preferred stock, $.001 par value; 5,000,000 shares authorized at September 30, 2025 and December 31, 2024; no shares issued and outstanding September 30, 2025 and December 31, 2024. - - Common stock, $.001 par value; 40,000,000 shares authorized at September 30, 2025 and December 31, 2024; 10,626,683 and 10,544,691 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively. 11 11 Additional paid-in capital 153,195 152,906 Accumulated deficit (143,200) (144,332)TOTAL STOCKHOLDERS' EQUITY 10,006 8,585 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $13,247 $11,210 NEPHROS, INC. STATEMENTS OF OPERATIONS (In thousands, except share and per share amounts)(Unaudited) Three Months Ended Sep 30, Nine Months Ended September 30, 2025 2024 2025 2024Net revenue: Product revenues $4,596 $3,472 $13,613 $10,186 Service, royalty and other revenues 168 46 447 106 Total net revenues 4,764 3,518 14,060 10,292 Cost of goods sold 1,849 1,369 5,196 4,044 Gross margin 2,915 2,149 8,864 6,248 Operating expenses: Selling, general and administrative 2,229 1,721 6,684 5,804 Research and development 338 188 944 654 Depreciation and amortization 34 34 108 101 Total operating expenses 2,601 1,943 7,736 6,559 Operating income (loss) 314 206 1,128 (311)Other (expense) income: Interest expense - - (1) (1)Interest income 41 20 85 66 Other income (expense), net (15) (43) (68) (29)Total other expense: 26 (23) 16 36 Income (loss) before income taxes 340 183 1,144 (275)Income tax expense (3) - (12) - Net income (loss) $337 $183 $1,132 $(275) Net income (loss) per common share, basic $0.03 $0.02 $0.11 $(0.03)Net income (loss) per common share, diluted $0.03 $0.02 $0.10 $(0.03) Weighted average common shares outstanding, basic 10,612,012 10,544,139 10,604,300 10,518,742 Weighted average common shares outstanding, diluted 11,040,925 10,580,906 10,846,477 10,518,742

Nephros Announces Strong Third Quarter Financial Results; Achieving Highest Level of Programmatic Sales in Company History

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