Company: TOMZ
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001654954-25-009631
Chunk: 33

Company: TOMI Environmental Solutions, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 33
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&A should be read in conjunction with the Annual Report filed with the SEC and the condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Form 10-Q.

Quarterly Highlights

Business and Financial Update

Our total recognized and deferred revenue for the three months ended June 30, 2025 amounted to $1,750,350, consisting of approximately $1,031,000 in recognized revenue in the quarter and deferred revenue of approximately $719,235 at the end of June 2025.

Recognized revenue for the three months ended June 30, 2025, was $1,031,000, down 66% from $3,013,000 in the three months ended June 30, 2024. This was primarily driven by customers deferring capital expenditure projects due to the uncertain economic environment with the impact of announced and implemented tariffs on their supply chain and long term planning. This was not a factor in the second quarter of 2024, which had higher sales in mobile equipment of approximately $1.0 million and our Custom Engineered Systems or CES of approximately $0.5 million. 

Service-based revenue for the three months ended June 30, 2025 and 2024, was $378,000 and $285,000 respectively, representing an increase of $93,000 or 33%. Service-based revenue for the six months ended June 30, 2025 and 2024, was $955,000 and $656,000 respectively, representing an increase of $299,000 or 46%. The increase in service revenue was due to increased demand from current and new life sciences customers, expansion of services in additional industries being served by our products, and more stringent regulated procedures, resulting in quotes up 35% year over year, leading to expectations of continuing higher growth in the second half of the year.

As of June 30, 2025, our sales order backlog totaled approximately $1.4 million. As of August 7, 2025, the combined total of recognized revenue, deferred revenue, and sales order backlog was approximately $4.6 million, with active projects on schedule for delivery in 2025. In addition, we are negotiating approximately $2 million in new custom and integrated contracts, with bids expected to close prior to year-end.

Our iHP Corporate Service division, primarily utilized by our Life Science pharma customers, is a seasonal business dependent on customer shutdowns. This year, we are experiencing higher