TOMI Environmental Solutions (NASDAQ:TOMZ) reported second-quarter 2026 revenue growth of 118% from a year earlier, supported by higher sales of capital equipment, Custom Engineered Systems, SteraMist applicators and related services. Management also reaffirmed full-year revenue guidance of at least $12 million as its backlog and project pipeline expanded.
Revenue for the three months ended June 30 totaled $2.25 million, compared with $1.03 million in the prior-year quarter and $1.65 million in the first quarter of 2026. Product revenue rose 185% year over year to $1.86 million, while service revenue increased 3% to $389,000, Interim Chief Financial Officer Niro Srirathan said on the company’s earnings call.
Margins Improve as Expenses Decline
Gross profit more than doubled to $1.39 million from $677,000 a year earlier. Gross margin was 61.7%, improving from 50.3% in the first quarter but below the 65.7% reported in the second quarter of 2025.
Srirathan attributed the sequential margin improvement to greater revenue volume and a favorable mix of equipment deployments and BIT Solution consumables. Applicator sales reached $355,000 in the quarter, compared with $13,000 in the year-earlier period. Year-to-date applicator sales totaled nearly $400,000, according to Chief Operating Officer E.J. Shane.
Total operating expenses declined 10% year over year to $1.63 million. The reduction reflected lower general and administrative expenses, although the company recorded approximately $300,000 in advisory, legal and diligence costs associated with its agreement to merge with Carbon-Ion Corp., its reverse stock split and related filings.
Loss from operations narrowed 78% to approximately $244,000, from about $1.13 million a year earlier. Net loss improved to approximately $382,000, or $0.05 per basic and diluted share, compared with a net loss of approximately $1.24 million, or $0.19 per share, in the second quarter of 2025. Per-share figures were adjusted to reflect TOMI’s 1-for-3 reverse stock split completed July 20.
Management said it believes revenue growth and expense discipline could bring the company to operating breakeven by the fourth quarter. Srirathan said the company expects reaching its $12 million revenue target would cover operating expenses and support breakeven results.
Backlog, Pipeline and Customer Activity
TOMI’s sales order backlog stood at $2.2 million at quarter-end and had increased to $2.6 million after the quarter. The company said booked orders and expected completions before year-end exceed $6.2 million. Its active integrated project pipeline totaled $4.3 million across 13 projects, while the broader commercial sales pipeline was approximately $35 million.
Of the identified pipeline, $8.6 million is in advanced stages and is expected to close during 2026, assuming no material changes to customer budgets, E.J. Shane said. Opportunities include a roughly $1 million Custom Engineered System project that was delayed from a June decision timeline to September, as well as a separate approximately $1 million healthcare-manufacturing project involving four applicators per proprietary machine line.
The company also cited an approved order from a longstanding global pharmaceutical customer for approximately $500,000 in SteraMist systems, with delivery scheduled later this year. In addition, a Canadian partner has access to a bid for a potential order of eight Hybrid systems.
Chief Executive Officer Halden Shane said TOMI delivered iHP chambers to a Fortune 500 medical device manufacturer. He characterized the installation as the company’s first chamber specifically designed, manufactured and assembled for integration with its SteraMist standalone system. The company said the project supports its efforts to advance an FDA 510(k) submission for certain medical-device applications.
Management said it must develop protocols, conduct studies and submit findings to the FDA before moving further in the process. E.J. Shane said the company expects to provide a clearer timeline after another quarter.
Regulatory and Market Expansion
TOMI said its disinfection products are approved for use in Austria, Italy, the Netherlands, Belgium, Denmark, Germany, Hungary, Spain, Great Britain, Northern Ireland and Ireland. Switzerland was added through an amendment, while additional approvals are expected in France, Poland, Portugal and Romania.
The Environmental Protection Agency granted an unconditional registration for AgriMist, TOMI’s fourth EPA label. The company said the label permits direct application of iHP to indoor-grown plants and certain fruits, including avocados, for the prevention, control and suppression of plant pathogens. The label also permits applications through the day of harvest.
During the question-and-answer session, E.J. Shane said AgriMist opportunities are not included in the company’s current pipeline and are expected to add to it as commercialization begins.
TOMI also reported adding domestic distribution partners focused on emergency services and other markets, along with a new Puerto Rico-based partner targeting life sciences and food manufacturing. The company said it has received approvals from defense contractors in Korea and defense agencies in Canada, though it did not disclose additional details because of confidentiality agreements.
Capital Position and Carbon-Ion Merger
At June 30, TOMI had $322,000 in cash and cash equivalents, compared with $88,000 at the end of 2025. Working capital increased to $1.82 million from $1.02 million, and stockholders’ equity rose to $1.43 million from $589,000.
The company received $1.92 million in net proceeds through its equity line of credit during the quarter and reported about $18.1 million of remaining contractual capacity under that facility. Post-quarter, TOMI amended its 2023 convertible notes to reduce the fixed conversion price from $3.75 to $1.50 per share, subject to adjustment under the notes’ terms.
Management said the proposed Carbon-Ion merger remains subject to a minimum $10 million concurrent financing condition. Halden Shane said the companies are still negotiating that financing and that Carbon-Ion is preparing a prototype program, with contracts involving Oak Ridge National Laboratory and the Department of Energy in final stages.
About TOMI Environmental Solutions (NASDAQ:TOMZ)
TOMI Environmental Solutions, Inc is a provider of infection prevention and control technologies, specializing in advanced decontamination and disinfection solutions. The company develops and manufactures a range of proprietary products, including electrostatic sprayers, thermal foggers, vaporized hydrogen peroxide systems and mobile decontamination chambers. These technologies are designed to deliver broad-spectrum pathogen kill and odor elimination in both occupied and unoccupied spaces.
In addition to its equipment offerings, TOMI provides chemical disinfectants and surface coatings formulated to meet regulatory standards for hospital?grade efficacy.
