Shares of Retractable Technologies, Inc. (RVP Quick QuoteRVP - Free Report) have gained 5.8% since the company reported its second-quarter 2025 earnings, sharply outperforming the S&P 500 Index’s 1.1% decline in the same period. Over the past month, RVP stock surged 26.7%, while the broader market benchmark rose 1.5%.

RVP’s Earnings Snapshot

Retractable Technologies posted net sales of $10.4 million for the second quarter of 2025, up 73.2% from $6 million in the prior-year quarter. However, the company reported an operating loss of $5.1 million compared with $5.8 million in the prior year, showing modest improvement. Net loss attributable to common shareholders narrowed sharply to $145,082, or breakeven per share, from $14.2 million, or a loss of $0.48 per share, in the year-ago quarter.

For the first half of 2025, RVP’s sales totaled $18.7 million, up 37.5% compared with $13.6 million a year earlier, while operating losses widened to $9.8 million from $8.7 million. Segmentally, EasyPoint needle sales grew significantly, boosting unit volumes but pressuring average selling prices.

Retractable Technologies’ Other Key Business Metrics

Unit sales surged in both domestic and international markets. Domestic revenues jumped 69.3%, with unit sales up 81.8% year over year, while international revenues nearly doubled, climbing 92.6%. Overall, unit sales surged to 109.2% in the quarter. However, a greater sales mix of EasyPoint needles — sold at lower average prices and sometimes at international discounts — led to a decline in average selling price, tempering revenue growth relative to volume gains. For the six-month period, domestic revenues increased 36.6% and domestic unit sales increased 47.1%, while international revenues increased 42.8% compared with the same period in 2024.

Cost pressures remained significant. Cost of manufactured products rose 66.1% in the quarter and 58.8% in the first half of 2025, driven by tariff expenses, higher domestic production costs and inventory write-downs. Tariffs alone added $561,000 to second-quarter costs and $2.1 million year to date. Royalty expenses also grew, increasing 39.4% in the quarter and 23.4% in the first half of 2025, in line with higher sales. Offsetting these were lower operating expenses, which declined 5.9% in the quarter and 5.2% year to date, mainly due to reduced bad debt and litigation costs.

RVP’s Management Commentary

Management acknowledged that tariffs remain a material headwind. The current rate stands at 130% for imported needles and syringes from China and 30% for other medical devices. In response, Retractable Technologies is accelerating its domestic manufacturing shift. U.S.-based production accounted for 38% of total output in the first half of 2025, up from just 9% a year earlier. While this reduces tariff exposure, it raises labor and benefit costs, necessitating workforce reductions elsewhere. Management noted that layoffs in general and administrative roles, coupled with later cuts to manufacturing staff, were intended to offset the higher expense base.

Factors Influencing Retractable Technologies’ Headline Numbers

The mix of product categories was crucial in shaping performance. Syringes, which traditionally command higher selling prices, represented 68.8% of sales in the first half of 2025. EasyPoint needles, which are lower priced, comprised 27.6%, while other safety products made up the balance. This mix shift explains why unit sales growth outpaced revenue gains.

Additionally, RVP recorded a $1.9 million litigation settlement gain in May, which partially offset losses, and saw $1.6 million in unrealized second-quarter investment gains, contrasting with a $5.6 million first-half unrealized loss on securities holdings.

RVP’s Guidance

While no formal quantitative guidance was issued, management highlighted its ongoing efforts to expand U.S. manufacturing capacity and reduce reliance on Chinese suppliers. Adaptations to existing equipment are expected to enable domestic production of 0.5mL syringes in the second half of 2025, eliminating imports for those products. However, management cautioned that tariffs, workforce cost pressures and product mix will continue to weigh on margins in the near term.

Retractable Technologies’ Other Developments

Beyond tariffs and workforce reductions, Retractable Technologies’ settlement of a long-running legal dispute contributed positively to results, with $1.9 million received in the second quarter. The company also continued to benefit from its earlier Technology Investment Agreement with the U.S. government, which expanded domestic production capacity and remains in effect through 2030. In July 2025, further cuts to manufacturing support staff were announced, expected to reduce annual labor costs by $1.6 million.