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Applied Energetics Posts Wider Y/Y Loss in 2024 as Revenues Slip 7.8%
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Shares of Applied Energetics, Inc. (AERG - Free Report) have gained 4.2% since reporting 2024 results. This compares favorably with the S&P 500 index’s 0.5% decline over the same period. However, over the past month, the AERG stock has lost 6.3% compared with the S&P 500’s 4.2% decline.
Revenue & Net Loss Deepen Y/Y
For 2024, Applied Energetics reported revenues of $2.43 million, representing a 7.8% decrease from $2.63 million in 2023. The downturn in revenues stemmed primarily from a contract modification that reduced the contract’s price while extending its term. This revenue contraction occurred despite an additional contract continuation and a new award in the year.
The net loss for 2024 widened 24.8% to $9.17 million from $7.35 million in the prior year. The deeper loss was primarily attributed to increases in general and administrative expenses, which rose by $738,000 or 8.4%, and research and development costs, which inched up 2.3% year over year. Applied Energetics reported a net loss per share of 4 cents in 2024 compared with a net loss of 3 cents in 2023.
Applied Energetics Inc. Price, Consensus and EPS Surprise
Business Metrics Reflect Higher Costs & Strained Liquidity
The company's cost of revenues skyrocketed 132.1% to $1.48 million from $637,697 a year earlier, driven by increased material, supply and direct labor costs tied to revised contracts. Meanwhile, selling and marketing expenses dropped modestly by 2.5% to $375,000 as the company continued its business development initiatives via Westpark Advisors and other consultants.
Cash and cash equivalents at the end of 2024 totaled $164,812, a sharp decline from $1.32 million at the close of 2023. The company’s current liabilities exceeded its current assets, resulting in a working capital deficit of $67,639.
Applied Energetics acknowledged that ongoing supply-chain disruptions, especially in semiconductor chips and optical components, create constraints on contract execution and internal development efforts. The company also flagged labor market dynamics as a challenge but noted some improvement in recruiting specialized personnel.
In its strategic commentary, AERG emphasized continued investment in recruiting scientific and technical talent and building a robust intellectual property portfolio. The leadership is considering adding board members and exploring equity financing options. Notably, a focus remains on enhancing ultra-short pulse optical technologies with goals to increase energy and peak power output while reducing system size and costs.
Factors Influencing Performance
Beyond supply-chain and labor constraints, the company cited macroeconomic pressures and policy shifts in Washington as significant risk factors. Proposed federal budget cuts, particularly for the Department of Defense and Homeland Security — key revenue sources for Applied Energetics — could affect its cash flow and project execution. While some federal support for innovative defense technologies like directed energy remains intact, administrative hurdles and delayed government payments have added uncertainty to the operational forecast.
The company’s gross profit plunged more than 50% from nearly $2 million in 2023 to under $1 million in 2024 as cost increases outpaced revenues. This margin compression, coupled with higher operating expenses and minimal other income, contributed to the steep net loss.
Outlook
Applied Energetics did not issue any formal revenue or earnings guidance for 2025. However, management expressed cautious optimism, citing its ongoing performance under Department of Defense contracts and recent federal budget extensions that preserve defense-related spending through Sept. 30, 2025. The company raised approximately $6 million via a private equity placement in early 2025 to bolster short-term liquidity.
Other Developments
In 2024, AERG continued execution under its $1.15-million Phase II Small Business Technology Transfer contract with the U.S. Army, initiated in May 2023. This project, which builds on earlier feasibility studies, aims to develop and test an infrared system, and is being performed in collaboration with the University of Arizona.
During the year, Applied Energetics expanded its physical footprint, exercising an option to lease an additional 5,000 square feet at the University of Arizona Tech Park. As of the end of 2024, the company occupied roughly 26,000 square feet across its facilities. The additional space is expected to support its operational and R&D efforts moving forward.
In terms of financing activity, the company raised $4.17 million through a private sale of nearly 1.9 million shares at $2.20 each. It also received proceeds from the exercise of stock options and warrants totaling $89,499.
Overall, while the company continues to invest in capabilities and contract execution, persistent cost pressures and macro headwinds weighed on the 2024 performance. Investors will likely look for signs of revenue stabilization and improved cash flow management as key indicators going forward.
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Applied Energetics Posts Wider Y/Y Loss in 2024 as Revenues Slip 7.8%
Shares of Applied Energetics, Inc. (AERG - Free Report) have gained 4.2% since reporting 2024 results. This compares favorably with the S&P 500 index’s 0.5% decline over the same period. However, over the past month, the AERG stock has lost 6.3% compared with the S&P 500’s 4.2% decline.
Revenue & Net Loss Deepen Y/Y
For 2024, Applied Energetics reported revenues of $2.43 million, representing a 7.8% decrease from $2.63 million in 2023. The downturn in revenues stemmed primarily from a contract modification that reduced the contract’s price while extending its term. This revenue contraction occurred despite an additional contract continuation and a new award in the year.
The net loss for 2024 widened 24.8% to $9.17 million from $7.35 million in the prior year. The deeper loss was primarily attributed to increases in general and administrative expenses, which rose by $738,000 or 8.4%, and research and development costs, which inched up 2.3% year over year. Applied Energetics reported a net loss per share of 4 cents in 2024 compared with a net loss of 3 cents in 2023.
Applied Energetics Inc. Price, Consensus and EPS Surprise
Applied Energetics Inc. price-consensus-eps-surprise-chart | Applied Energetics Inc. Quote
Business Metrics Reflect Higher Costs & Strained Liquidity
The company's cost of revenues skyrocketed 132.1% to $1.48 million from $637,697 a year earlier, driven by increased material, supply and direct labor costs tied to revised contracts. Meanwhile, selling and marketing expenses dropped modestly by 2.5% to $375,000 as the company continued its business development initiatives via Westpark Advisors and other consultants.
Cash and cash equivalents at the end of 2024 totaled $164,812, a sharp decline from $1.32 million at the close of 2023. The company’s current liabilities exceeded its current assets, resulting in a working capital deficit of $67,639.
Management Commentary: Strategic Focus Amid Headwinds
Applied Energetics acknowledged that ongoing supply-chain disruptions, especially in semiconductor chips and optical components, create constraints on contract execution and internal development efforts. The company also flagged labor market dynamics as a challenge but noted some improvement in recruiting specialized personnel.
In its strategic commentary, AERG emphasized continued investment in recruiting scientific and technical talent and building a robust intellectual property portfolio. The leadership is considering adding board members and exploring equity financing options. Notably, a focus remains on enhancing ultra-short pulse optical technologies with goals to increase energy and peak power output while reducing system size and costs.
Factors Influencing Performance
Beyond supply-chain and labor constraints, the company cited macroeconomic pressures and policy shifts in Washington as significant risk factors. Proposed federal budget cuts, particularly for the Department of Defense and Homeland Security — key revenue sources for Applied Energetics — could affect its cash flow and project execution. While some federal support for innovative defense technologies like directed energy remains intact, administrative hurdles and delayed government payments have added uncertainty to the operational forecast.
The company’s gross profit plunged more than 50% from nearly $2 million in 2023 to under $1 million in 2024 as cost increases outpaced revenues. This margin compression, coupled with higher operating expenses and minimal other income, contributed to the steep net loss.
Outlook
Applied Energetics did not issue any formal revenue or earnings guidance for 2025. However, management expressed cautious optimism, citing its ongoing performance under Department of Defense contracts and recent federal budget extensions that preserve defense-related spending through Sept. 30, 2025. The company raised approximately $6 million via a private equity placement in early 2025 to bolster short-term liquidity.
Other Developments
In 2024, AERG continued execution under its $1.15-million Phase II Small Business Technology Transfer contract with the U.S. Army, initiated in May 2023. This project, which builds on earlier feasibility studies, aims to develop and test an infrared system, and is being performed in collaboration with the University of Arizona.
During the year, Applied Energetics expanded its physical footprint, exercising an option to lease an additional 5,000 square feet at the University of Arizona Tech Park. As of the end of 2024, the company occupied roughly 26,000 square feet across its facilities. The additional space is expected to support its operational and R&D efforts moving forward.
In terms of financing activity, the company raised $4.17 million through a private sale of nearly 1.9 million shares at $2.20 each. It also received proceeds from the exercise of stock options and warrants totaling $89,499.
Overall, while the company continues to invest in capabilities and contract execution, persistent cost pressures and macro headwinds weighed on the 2024 performance. Investors will likely look for signs of revenue stabilization and improved cash flow management as key indicators going forward.