Vaso Stock Down Following Q2 Earnings as Revenue and Margins Fall

Shares of Vaso Corporation VASO have lost 4.3% since the company reported its earnings for the quarter ended June 30, 2025. This compares to the S&P 500 Index’s 1.1% loss over the same time frame. Over the past month, the stock lost 10.7% against the S&P 500’s 1.5% growth.VASO’s Earnings SnapshotVaso’s second-quarter 2025 revenues came in at $19.9 million, down 1.3% from $20.2 million in the prior-year quarter. The bottom line swung to a net loss of $0.2 million against a net income of $1.2 million a year ago. On a per-share basis, this translated to a breakeven result versus $0.01 earnings per share in the prior-year quarter.Segment-wise, professional sales services revenue fell 4% to $8.7 million from $9.1 million, largely reflecting lower diagnostic imaging equipment deliveries by partner GE HealthCare. The IT segment grew 0.9% to $10.7 million from $10.6 million, supported by stronger network services, while the equipment segment was nearly flat, inching up 0.8% to $0.5 million.Vaso’s Other Key Business MetricsGross profit slipped 2.9% year over year to $11.8 million in the quarter from $12.2 million, with margin at 59% versus 60% a year ago. The IT segment contributed $4.3 million in gross profit, down 5.6% from $4.6 million, reflecting higher costs and a weaker mix in healthcare IT revenues. Professional sales service profit was $7.1 million, a 1.2% decline from $7.2 million, largely due to fewer diagnostic imaging deliveries, though ultrasound product sales and commission rates partially offset the drop. Equipment gross profit was $387,000, down 2.3% from $396,000, as lower margins in China outweighed SaaS gains in the United States.Selling, general and administrative (SG&A) expenses surged 11.2% year over year to $12.1 million from $10.8 million, driven by higher personnel costs in the IT and professional sales service units, though partially offset by lower spending in the equipment segment. This rise in operating costs was a key contributor to the quarter’s $0.4 million operating loss, against operating income of $0.9 million in the prior-year quarter.Adjusted EBITDA fell sharply to a loss of $0.3 million from a positive $1.2 million in the prior year, primarily due to the swing in net income. Cash flow from operations was a bright spot, improving to $6.2 million in the first half from $1.7 million a year ago, driven by higher collections and deferred revenues.Vaso Corporation Price, Consensus and EPS Surprise Vaso Corporation price-consensus-eps-surprise-chart | Vaso Corporation QuoteVASO’s Management CommentaryManagement attributed the quarter’s revenue decline to fewer GE HealthCare imaging equipment deliveries, which remain a significant revenue source. Deferred commission revenue grew to $38.1 million from $31.7 million a year earlier, reflecting a higher value of new bookings compared to deliveries. Recurring IT services revenue continued to stabilize results, with monthly recurring revenue representing 89% of segment revenues versus 83% in the year-ago quarter.Operating expenses rose 9.5% year over year to $12.2 million from $11.2 million, mainly due to higher salesforce compensation and investor relations costs. Management noted that profitability was pressured by both these expenses and product mix changes, although SaaS adoption in the equipment segment offered margin support.Factors Influencing Vaso’s Headline NumbersThe swing to a quarterly loss stemmed from both contracting gross profit and a sharp rise in SG&A expenses. In the IT division, margins narrowed due to a heavier skew toward network services, which carry lower margins than healthcare IT products. For professional sales services, results were linked closely to GE HealthCare’s delivery mix, which leaned more toward ultrasound and less toward high-value imaging systems. Meanwhile, Vaso’s China equipment sales underperformed, reflecting a challenging market environment.Interest income slipped year over year due to lower interest rates, further pressuring the bottom line. Nonetheless, tax expenses declined, partially mitigating losses.VASO’s GuidanceVaso did not issue formal quantitative guidance for the remainder of 2025. However, management highlighted confidence in ongoing IT recurring revenues and a strong deferred revenue balance that supports future visibility. VASO emphasized continued focus on internal growth, partnerships and strategic investments following the termination of its Achari merger agreement in 2024.Vaso’s Other DevelopmentsNo acquisitions, divestitures or restructuring initiatives were announced during the quarter. VASO remains bound by its extended sales representation agreement with GE HealthCare, running through 2026, which underpins its professional sales services segment. Additionally, Vaso drew a short-term RMB 7 million loan in China during June 2025 to support working capital needs, repaid in July.Free Report: 3 Software Stocks Poised to SkyrocketSoftware stocks are poised to catapult higher in the coming months (and years) thanks to several factors, especially the explosive growth of AI. Zacks' urgent report reveals 3 top software stocks to own right now.Access the report free today >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Vaso Corporation (VASO): Get Free ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks