Key insights
- TOMI Environmental Solutions reported a 5% YoY revenue increase in Q1 2026, reaching $1.65 million, despite an EPS miss of -$0.04. The stock surged nearly 13% post-earnings, signaling investor confidence in the company's growth strategy and product innovation. Positive market reaction continued into premarket trading. While the company is small, the positive reaction to revenue growth suggests a broader market appetite for growth stories, even with EPS misses.
TOMI Environmental Solutions, Inc. reported its Q1 2026 financial results, highlighting a revenue increase to $1.65 million, a 5% year-over-year growth. Despite an EPS of -$0.04, missing expectations, the company’s stock surged 12.98% post-earnings, reflecting investor confidence in its strategic direction and growth potential.
TOMI Environmental Solutions demonstrated significant sequential growth, with revenue rising 67% from Q4 2025. The company’s strategic focus on product sales and innovation initiatives, including the expansion of applicator sales and BIT solution, contributed to this performance. Despite a decline in service revenue, the company portrayed resilience through effective cost management and operational efficiency.
TOMI Environmental Solutions’ EPS of -$0.04 fell short of expectations, while revenue met forecasts at $1.65 million. The EPS miss is minor compared to historical trends, reflecting ongoing efforts to balance strategic investments with profitability.
Following the earnings announcement, TOMI’s stock price increased by 12.98%, closing at $0.801. The positive market reaction continued into premarket trading, with a further 2.75% increase. This upward trend indicates investor optimism, likely driven by revenue growth and strategic initiatives.
The company projects continued revenue growth, with future forecasts indicating an increase in both EPS and revenue over the coming quarters. Strategic initiatives in product innovation and market expansion are expected to drive these improvements.
CEO Dr. Halden Shane emphasized, "Our strategic focus on expanding our product offerings and market reach is yielding positive results. We anticipate further growth as we continue to innovate and penetrate new markets."
During the earnings call, analysts inquired about the impact of regulatory approvals on future revenue streams and the company’s strategy to mitigate margin compression. Management reiterated their confidence in margin recovery through increased sales of high-margin consumables and strategic cost management.
Operator: Good day, everyone. Welcome to the TOMI Environmental Solutions, Inc. first quarter 2026 financial results conference call. At this time, all participants are placed on a listen-only mode. If you have any questions or comments during the presentation, you may press star one on your phone to enter the question queue at any time. We will open the floor for your questions and comments after the presentation. It is now my pleasure to hand the floor over to your host, John Nesbett of IMS Investor Relations. Sir, the floor is yours.
John Nesbett, Investor Relations, IMS Investor Relations: Thank you for joining us today for the TOMI Environmental Solutions Investor Update conference call. On today’s call is TOMI’s Chief Executive Officer and Chairman, Dr. Halden Shane, E.J. Shane, our Chief Operating Officer, and our Chief Financial Officer, David Vanston. A telephone replay of today’s call will be available through May 15th. The details of which are included in the company’s press release. A webcast replay will also be available on TOMI’s website, steramist.com. Certain written and oral statements made by management of TOMI may constitute forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These forward-looking statements should be evaluated in light of important risk factors that could cause actual results to differ materially from our anticipated results. The information provided in this conference call is based upon the facts and circumstances known at this time.
Please refer to our filings with the Securities and Exchange Commission for a discussion of these risk factors. The company undertakes no obligation to update these forward-looking statements after the date of this call. I will now turn the call over to TOMI’s Chief Executive Officer and Chairman of the Board, Dr. Halden Shane. Please go ahead.
Dr. Halden Shane, Chief Executive Officer and Chairman, TOMI Environmental Solutions, Inc.: Thank you, John, and thank you all for joining us today. Q1 2026 marked a healthy start to the year, highlighted by a pivotal strategic development for TOMI. Our first quarter results demonstrated significant momentum across key metrics. Revenue increased by 5% year-over-year and 67% sequentially from Q4 of 2025. Notably, applicator sales in Q1 alone surpassed our total applicator sales for the entire year of 2025, representing a remarkable 139% year-over-year growth. This success underscores the effectiveness of our razor blade consumable model as we expand our installed base. Additionally, BIT solution sales have consistently grown by 21% annually since 2024 and remained above the 2025 levels in Q1 of 2026.
We also achieved a 15% reduction in operating expenses compared to Q1 of 2025 while maintaining our full capacity. The company also generated positive operating cash flow of $296,000, which is a $572,000 improvement over the same period last year. A notable trend this year is strengthening and dynamic nature of our integrated project pipeline, which continues to demonstrate meaningful momentum. This is the pipeline the company has highlighted since November of 2025 and which evolves as we advance or complete contracts. The expansion of this pipeline aligns closely with growth in our backlog, and we are disclosing only opportunities that suppliers have indicated are near signing. These opportunities tend to involve longer sales cycles. While near-term closings are communicated as they firm up, they do not represent our entire potential opportunity.
The trend is reflected in our backlog of orders. At year-end of 2025, TOMI reported $1.6 million in backlog, which grew by $500,000 by the close of Q1 2026 and is currently at $2.2 million. This steady backlog expansion underscores the strength of our automated integrated system and the many service offerings we implemented. Critically, backlog growth continues even as we fulfill existing orders, illustrating demand and execution across sales. At the end of quarter one, TOMI received $440,000 annual purchase orders for recurring decontamination services with a leading global medical technology company. This contract involves quarterly professional iHP decontamination services for critical clean room and laboratory environments, aligning perfectly with our strategy to build a high-margin, repeatable revenue model in addition to increasing the backlog order number.
In Q1, we achieved several other notable milestones. A private East Coast research university purchased and installed a SteraMist Hybrid system for high-level decontamination of reusable medical equipment. We sold a custom-engineered system in the U.K. to an international pharmaceutical manufacturer, which was integrated into Total Clean Air’s modular cleanroom platform. We established Total Clean Air as our preferred European partner for SteraMist iHP technology when the U.K. Health and Safety Executive granted regulatory authorization for our BIT solution and SteraMist iHP products. The food safety sector is gaining real traction. We launched an important case study that demonstrated up to 95% reduction in sanitization testing costs for an egg food manufacturer. Our longstanding partner, DisinfectCare, secured a service contract at a major Mexican dairy facility, where rigorous testing highlighted SteraMist iHP’s efficacy while preserving product quality.
Further, the end user is looking to expand its use of SteraMist iHP in Mexico to its other facilities. There are other positive food safety tests that the company has received to be discussed at a later date. This is all exciting stuff for us. Regulatory advancements have also played a critical role in our progress. In February, we received official authorization from the Health and Safety Executive for our BIT solution and SteraMist iHP products for use in Great Britain and Northern Ireland. In March, we secured product authorization from the Dutch Regulatory Authority, making our first product approval within an EU member state and facilitating a streamlined recognition pathway across the EU. This past week, we received notification of further approvals in Germany, Belgium, Denmark, and Hungary. We anticipate many other regulatory wins in the near future.
On April 30th, 2026, we executed a non-binding letter of intent to merge with Carbonium Core Incorporated, a U.S.-based producer of nuclear-grade graphite for advanced reactor technologies and AI data center infrastructure. Carbonium Core boasts a vertical integrated production platform and exclusive purification technology developed with Oak Ridge National Laboratory. This merger targets a specialty market currently dominated by foreign supply, coinciding with increasing domestic demand for non-Chinese origin graphite due to new U.S. FEOC regulations and federal support for advanced nuclear energy. To be clear, with this transaction, our country will become the leader in Generation IV nuclear reactors, a class of advanced systems designed to offer significantly improved safety, efficacy, and sustainability compared to current commercial plants.
These reactors are characterized by their ability to operate at a much higher temperature gas-cooled reactor pebble bed module recognized as the world’s first operational Generation IV reactor. These systems aim to overcome limitations of current technology by producing more fuel than they consume and ensuring that severe accidents resulting in radioactive release are physically impossible. Under the terms of the LOI, Carbonium Core would become a wholly owned subsidiary of TOMI. Former stockholders would receive TOMI common stock equal to 19.99% of shares outstanding prior to the merger, along with shares of a newly created series of convertible preferred stock, implying an enterprise valuation of $120 million. We aim to finalize definitive agreements by May 30th, 2026,