908 Devices (MASS) Q4 2025 Earnings Transcript
908 Devices (MASS) Q4 2025 Earnings Transcript
Motley Fool Transcribing, The Motley FoolTue, March 3, 2026 at 3:03 PM UTC
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Date
Tuesday, March 3, 2026 at 8:30 a.m. ET
Call participants -
Chief Executive Officer and Co-Founder — Kevin J. Knopp
Chief Financial Officer — Joseph H. Griffith
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Takeaways -
Revenue -- $17.4 million for the quarter, reflecting 21% year-over-year growth, with principal drivers from increased demand for Explorer, Viper launches, and expansion in state and local markets.
Adjusted EBITDA -- Positive $700,000 in the quarter compared to a $4 million loss last year, attributed to transformation initiatives and cost restructuring.
Full-year revenue -- $56.2 million, up 18%, with FTIR replacement accounting for more than 50% of device placements and notable traction in international and NATO-aligned countries.
Recurring revenue -- 22% year-over-year growth and 35% of annual revenues ($5.5 million in Q4, 32% of total), driven by services, software, and accessories.
Gross profit -- $9.2 million for the quarter, up from $6.7 million, with quarterly gross margin at 53% versus 47% prior-year due to higher volume and favorable sales channel mix.
Adjusted gross margin -- 57% for the full year 2025 (530 basis points higher), with improved mix and operational leverage.
Installed base -- 224 devices shipped in the quarter, bringing the installed base to 3,736 units, highlighting rapid device deployment.
MX908 platform enhancement -- Usability upgrades and new drug detection targets, including medetomidine, expanding field law enforcement capabilities.
Viper launch -- Over 40 units shipped in Q4 with $3 million in revenue, targeting customs, hazmat, and international markets, utilizing proprietary spectral processing.
State and local channel -- Annual revenue up 38% to approximately $24 million, representing 43% of total revenue, balancing more variable federal and defense sales.
International growth -- International revenues rose to 27% of total from 25% the previous year, with shipments to Poland, Czech Republic, Finland, Ukraine, and other NATO-aligned countries.
AVCAD program -- Completed field testing, next phase RFP response submitted by Smiths Detection, and expected initial production run deliveries set for the second half of the year.
Year-end cash position -- $113 million in cash, cash equivalents, and marketable securities, no debt outstanding, and approximately $900,000 generated in annual cash flow.
2026 guidance -- Revenue guided to $64.5 million-$67.5 million, growth of 15%-20%, including $59.5 million-$61.5 million in handheld sales, $2 million-$3 million from the AVCAD program, and $3 million from OEM/funded partnerships.
Operating expenses -- Quarterly operating expenses were $6.1 million, down from $23.4 million, driven primarily by a reduction in the fair value of contingent consideration and a goodwill impairment charge in the prior year.
Contracting strategy -- Shifted to a single U.S. government contracting partner, Mountain Horse Solutions, to streamline procurement, improve forecasting, and enhance delivery efficiency.
Summary
908 Devices (NASDAQ:MASS) delivered substantial quarterly and annual revenue growth, underscoring penetration gains for its Explorer and Viper platforms in both U.S. and international public safety markets, with significant expansion observed in NATO-aligned regions. Management highlighted positive adjusted EBITDA in the quarter, strengthened recurring revenue streams, and a robust balance sheet, positioning the company to invest in further product and channel expansion while supporting profitability targets. Looking ahead, explicit 2026 guidance anticipates double-digit revenue growth, margin enhancement, and advancement of the DoD AVCAD partnership, with additional focus on new product introductions and operational efficiency gains.
Management stated, "We have entered 2026 with a late-stage pipeline that is double the size it was at the start of 2025," reflecting increased sales velocity and customer engagement.
Guidance included an expectation to cut the adjusted EBITDA loss by approximately 50% in 2026, citing cost discipline and expanding operating leverage.
The consolidation of contracting partners aims to decrease variability in federal and military sales, accelerating order fulfillment and enabling both pricing transparency and deployment speed.
Viper unit sales in Q4 may signal accelerating adoption, with management projecting two to three times greater Viper placement in 2026 compared to its launch year.
The company noted expanded integration initiatives with unmanned ground vehicles, UAVs, and robotics platforms, hinting at potential new verticals for device deployment beyond core emergency response markets.
Industry glossary -
FTIR (Fourier Transform Infrared Spectroscopy): An analytical technique for material identification by measuring infrared absorption spectra.
AVCAD program: Advanced Chemical Agent Detector initiative in partnership with the U.S. Department of Defense, involving component and subsystem production with Smiths Detection.
MX908: Company’s flagship handheld mass spectrometer device for trace chemical identification.
OEM: Original Equipment Manufacturer partnerships generating component and contract revenue streams.
Full Conference Call Transcript
Kevin J. Knopp: Good morning, and thank you for joining our fourth quarter and full year 2025 earnings call. I want to start by expressing my sincere appreciation to our entire team for their exceptional execution and unwavering commitment to our strategic transformation throughout 2025. The momentum we have built and the progress we have achieved reflect our disciplined focus on delivering innovative chemical analysis devices that protect frontline responders worldwide. I am pleased to report that we achieved $17.4 million in revenue from continuing operations in Q4, representing robust 21% year-over-year growth.
This performance was driven primarily by three factors: one, continued demand for our Explorer gas identification device by firefighters and hazmat response teams; two, strong initial demand for Viper, our new product that provides simple and fast chemical analysis of solids and liquids; and three, continued strong adoption of all of our products by U.S. state and local customers. Most importantly, we achieved positive adjusted EBITDA in the fourth quarter of $700,000, which is a remarkable improvement from the prior year's loss of $4 million. This achievement validates the structural initiatives we implemented as part of our transformation.
For the full year 2025, I am proud to report that we delivered $56.2 million in revenue from continuing operations and in line with our five-year CAGR performance, representing strong 18% year-over-year growth. This strong performance validates our focus on vital health, safety, and defense tech applications. A key highlight was our team's execution of replacing outdated FTIR equipment with modern devices—one of our growth catalysts. In 2025, more than 50% of device placements came from FTIR, led by the full-year impact of our Explorer device. Another highlight is our achievement of 22% year-over-year growth in recurring revenue, which represents 35% of our 2025 revenues.
This growth reflects our ongoing efforts to offer more value to our customers through service, support, software, and accessory offerings, strengthening revenue visibility and long-term predictability. I would now like to highlight our progress during 2025 across our three strategic focus areas. Our number one focus has been to increase adoption of our devices to address global threats to public health and safety. Our Explorer device continues to be a standout performer with its unique capability to detect, identify, and quantify over 5,000 unknown gas and vapor chemical threats in seconds.
The market response has been exceptional across fire and hazmat teams worldwide, who recognize the device's value in filling a critical gap in on-site gas identification to better inform decision-making and accelerate action. In its first full year of commercial sales, the quantification-enabled Explorer delivered over 150 units to high-quality accounts, including the council of governments serving the broader Washington, D.C. area and the U.S. Marine Corps CBRNE installation and protection program. These wins underscore the growing adoption of Explorer among premier federal and regional response organizations. As a result, Explorer achieved standout growth of more than 40% year over year, reflecting both the strength of demand and the impact of introducing quantification capability into the field.
To help drive procurement efficiency and predictability in our U.S. federal government business, we consolidated contracting partners in the fourth quarter from four to one. For 2026, we are now working with Mountain Horse Solutions, who specializes in supplying mission-critical equipment, such as our portfolio of devices, to all levels of the U.S. government and military. By leveraging their strong procurement relationships, contracting expertise, and integrated logistics and kitting capabilities, we improve forecasting accuracy and level-load production as a supplier while enabling government customers to receive fully configured, mission-ready solutions more quickly and reliably. We look forward to the benefits of coupling our demand generation with their procurement expertise.
Outside the U.S., we saw traction for devices accelerate, especially in Europe, as NATO countries have begun increasing their defense budgets due to the ongoing war in Ukraine and other global concerns. For the full year of 2025, 27% of revenues came from outside the United States. This is an increase from 25% in 2024, with an even stronger increase in sales along NATO's eastern flank. We shipped chemical detection devices to Poland, Czech Republic, Finland, Ukraine, and others in the region. This international expansion, we believe, is just beginning, across all customer segments. Moving to our second objective, advancing our next-gen analytical tools portfolio.
Our newest device, Viper, which we launched in July 2025, represents a breakthrough in simple, field-based chemical identification of unknown bulk substances by combining FTIR and Raman spectroscopy technologies with our proprietary smart spectral processing capability. The device's simple and smart workflow is game-changing for customs and border personnel as well as hazardous response teams. When connected with our Team Leader app, Viper allows field teams to instantly share results with command centers and subject matter experts, dramatically improving response coordination and decision-making speed. Overall, we are excited about the positive market reception for Viper with early deployments across state and local hazmat teams and international customers.
In the fourth quarter, we shipped more than 40 Viper units, over $3 million in revenue, and are encouraged by the ultimate potential of this new product and the full-year impact that Viper will have in 2026. We also enhanced our flagship MX908 platform in 2025 and recently released several usability improvements, including the new TIC Hunter mission mode that provides first responders with a more guided and purpose-built tool for hazardous vapor detection. Additionally, we expanded the device's drug detection capabilities by adding five new priority targets, including medetomidine, a veterinary sedative estimated to be 200 times more potent than xylazine and which is increasingly being mixed with fentanyl.
As the illicit drug landscape continues to evolve, our software-updatable platform enables us to rapidly deploy new target libraries and capability enhancements, ensuring law enforcement remains current and equipped to address emerging threats in real time. And finally, our third focus has been to strengthen our financial position and accelerate profitability. The operational improvements we implemented throughout 2025 have solidified our financial position. Our manufacturing consolidation into Danbury, Connecticut, and our move to a cost-efficient headquarters in Burlington, Massachusetts, have created meaningful efficiencies across our operations. These initiatives, combined with our disciplined cost management approach, enabled us to achieve our goal of positive adjusted EBITDA, which was $700,000 in the fourth quarter.
This achievement demonstrates that our cost structure is now rightsized, disciplined, and fully within our control. Compared to our year-end 2024 position, we also strengthened our balance sheet materially, exiting 2025 with $113 million in cash. With this solid financial foundation, we now have the flexibility to invest in the expanding growth opportunities ahead, driven by developing secular tailwinds such as increased funding to combat the fentanyl and illicit drug crisis and increased global defense budgets. To that end, we have established three strategic focus areas for 2026. First, scale proven platforms. We will sustain growth by continuing to modernize legacy detection equipment, especially FTIR, across global fire, law enforcement, and defense enterprise accounts.
We believe we have only made a dent in the overall potential and expect 2026 to benefit from a full year of growth of our newest product, Viper. Second, extend platform leadership. We will also drive growth with greenfield placements, differentiated capabilities, and disciplined product introductions. New capabilities drive new opportunities. Our Explorer product is a great example of this. With the differentiated gas quantification and identification capabilities, it is quickly penetrating the broader gas detection market. Similarly, our MX908 is now the proven device for trace chemical identification, and our law enforcement customers continue to rely on its unique capabilities. We expect to build on this and raise the bar further with our next-gen mass spec platform.
And our third focus is to strengthen revenue durability. We are building a predictable revenue mix by pursuing recurring revenue opportunities with connected services, expanding OEM-based revenue, and through long-term programs. To that end, our DoD AVCAD program in partnership with Smiths Detection is nearing its next phase. Field testing was completed in late fall, and as of today, we believe all material issues have been deemed addressed. Smiths Detection has responded to an RFP for a next phase and is awaiting feedback from the government.
This next phase quoted is for an initial production run of approximately a few hundred systems, with component and subsystem contributions from 908 Devices Inc. being potentially delivered throughout the second half of this year. We remain committed to support Smiths Detection and DoD on this important national defense effort. We look forward to updating you on our progress in each of these focus areas on future calls. I will now turn it over to Joseph H. Griffith to review our financial performance. Thanks, Kevin. As a result of the sale of our desktop portfolio in 2025, the financials we are reporting today are for continuing operations only.
All current and historical activity related to our desktops, including the gain on sale, are captured in a single discontinued operations line in our financial statements. Total revenue was $17.4 million for the fourth quarter 2025, increasing 21% from $14.3 million in the prior-year period. Handheld product and service revenue was $16 million for the fourth quarter 2025, up 18% from $13.6 million for the fourth quarter 2024. The increase was primarily driven by our FTIR products, including more than 40 Viper shipments, and Explorer, which more than doubled its placements in the fourth quarter versus the prior-year period. MX908 product and service revenue was relatively flat, with an increase in U.S. orders that offset fewer international device shipments.
In total, we shipped 224 devices in the fourth quarter, bringing our installed base to 3,736. Program product and service revenue was $300,000 in 2025, as we received funding for AVCAD program services performed in 2025; it was $17,000 in 2024. OEM and funded partnership revenue was $1 million for the fourth quarter 2025, compared to $700,000 in the prior-year period. Revenue growth was led by component sales to pharma and industrial QA/QC customers, leveraging our new precision machining capabilities, as well as component deliveries to Repligen under our supply agreement. Recurring revenue, which consists of consumables, accessories, software, and service revenue, represented 32% of total revenues this quarter and was $5.5 million, an 11% increase over the prior-year period.
Gross profit was $9.2 million for 2025, compared to $6.7 million for the prior-year period. Gross margin was 53% for the fourth quarter 2025 compared to 47% for the prior-year period. The increase was driven primarily by higher volume along with the shift in channel mix to state and local and defense sales during the fourth quarter 2025 compared to international sales in 2024 that have a lower average selling price. Adjusted gross profit was $10 million for 2025, compared to $7.5 million for the prior-year period. Adjusted gross margin was 57%, an increase of approximately 530 basis points compared to the prior-year period.
The increase in adjusted gross margin was driven by the channel mix and leverage as mentioned above. Total operating expenses for 2025 were $6.1 million compared to $23.4 million in the prior-year period. The decrease was largely a result of a $5.1 million reduction in the fair value of contingent consideration and a $10.1 million goodwill impairment charge in 2024. Excluding the impact of these two non-cash items, operating expenses for the fourth quarter decreased year over year by $2 million due to a reduction in headcount and facility expenses. Net income from continuing operations for 2025 was $4.4 million compared to a net loss of $16 million in the prior-year period.
This increase was primarily driven by the $15.2 million decrease in non-cash goodwill and contingent consideration and was additionally due to improved gross margins and reduced operating expenses. Adjusted EBITDA for 2025 was a positive $700,000 compared to a loss of $4 million in the prior-year period, representing a $4.7 million improvement and achievement of the goal we set in 2025. This significant improvement was related to our aggressive cost initiatives, resulting in reduced operating expenses across the board, including headcount, facilities, R&D costs, and professional fees. We structurally changed our cost basis and expect to see the benefits of these efficiencies continue. Now moving on to our full-year results.
Revenue for the full year 2025 was $56.2 million, increasing 18% from $47.7 million for the full year 2024. This was primarily driven by an increase in revenues from our FTIR products led by our recently launched Viper and our Explorer device, but also partly due to the impact of ownership for the full-year period in 2025 compared to eight months in 2024. An element of our growth in 2025 was driven by our state and local sales channel, which grew 38% to approximately $24 million, representing 43% of revenues for the full year 2025 compared to 37% for the full year 2024.
State and local deals are generally smaller in size and more frequent, which is a more predictable balance to large, potentially lumpy, federal and military enterprise sales. Gross profit was $28.4 million for the full year 2025, compared to $24.5 million for the full year 2024. Gross margin was 51% for both the full year 2025 and 2024. Adjusted gross profit was $31.9 million for the full year 2025, compared to $26.7 million for the full year 2024. Adjusted gross margin was 57% compared to 56% for the full year 2024. The increase in gross margin was primarily due to improved service and contract gross margins.
Total operating expenses for the full year 2025 were $67.8 million compared to $81.9 million in full year 2024. The decrease in operating expenses was driven primarily by a $47 million non-cash goodwill impairment charge, offset in part by a $27 million change in the fair value of the contingent consideration liability, where it was a charge in 2025 and a credit in 2024. Net loss from continuing operations for the full year 2025 was $33.3 million compared to $53.1 million in the full year 2024. This increase was largely due to the non-cash charge for the impairment of goodwill and change in valuation of the contingent consideration just mentioned.
Adjusted EBITDA for the full year 2025 was a loss of $9.6 million, marking a meaningful 39% reduction compared to full year 2020. We ended the year with $113 million in cash, cash equivalents, and marketable securities, with no debt outstanding. We generated approximately $900,000 in cash in 2025. The increase was primarily related to collection efforts and timing of working capital. Looking ahead in 2026, we expect revenue to be in the range of $64.5 million to $67.5 million, representing growth of 15% to 20% over full year 2025. Our guidance range includes the following assumptions.
First, we expect handheld product and service revenue to grow 13% to 17% year over year, which equates to a range of $59.5 million to $61.5 million. The increase reflects expectations around the full-year impact of Viper and growth of our MX908. Second, we expect OEM and funded partnerships, including contract revenue, to be approximately $3 million. And third, we expect revenue contribution from the AVCAD program to be in the range of $2 million to $3 million, likely in 2026. Moving down the P&L, we expect adjusted gross margins to be in the mid- to high-50% range for full year 2026 and are targeting margin expansion of at least 100 basis points with our increased volume.
Channel and product mix play a key part in our adjusted gross margin, and we will look to balance this with our first full year of manufacturing in Danbury and insourcing initiatives with our precision machining capabilities. During 2025, we were able to streamline our research and development and selling, general, and administrative costs. We will continue to be thoughtful on investments in 2026 and likely will see an increase in selling and marketing expenses as we look to drive revenue growth with targeted headcount investments.
And on the bottom line, we expect to cut our 2025 adjusted EBITDA loss in half for 2026, reducing it to the mid-single-digit millions, making another significant step down year over year while we go after the growth opportunity. At this point, I would like to turn the call back to Kevin. Thanks, Joe. As we wrap up today's call, I want to emphasize that 2025 was a defining year for 908 Devices Inc. The results we have delivered demonstrate that our strategic transformation is working. With our lower cost structure and healthy balance sheet, our trajectory is firmly within our control as we balance disciplined growth investments with profitability.
I am confident in our ability to capitalize on the significant and growing opportunity in front of us. We have entered 2026 with a late-stage pipeline that is double the size it was at the start of 2025, which is a tangible reflection of stronger customer demand. With funding momentum building and favorable U.S. policy decisions reinforcing the priorities of our end markets, we believe we are well positioned to translate this demand into sustained growth in the year ahead. Lastly, and perhaps most importantly, we are executing a mission that matters. Every device we deploy helps protect frontline responders who put their lives on the line to keep our communities safe.
This purpose-driven focus, combined with our technology leadership and operating strategy. That, let us open it up for questions.
Operator: We will now begin the question and answer session. Please limit yourself to one question and one follow-up. To withdraw your question, press 1 again. If you would like to ask a question, please press 1 on your telephone keypad. Please pick up your handset when asking a question. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Matt Larew with William Blair. Your line is open. Please go ahead.
Matt Larew: Hi, good morning. Thanks for taking my question. The first one on the relationship with Mountain Horse, Kevin, that you referenced. Just curious why you decided this was the right time to work with an external partner, how much volume of this particular product set you are trying to work with them on, and, Joe, I think you referenced the changing economics that might be involved there relative to margin expansion from feeding your first full year of Danbury. So just kind of curious how the economics will work with that relationship as well.
Kevin J. Knopp: Yeah. Absolutely. Happy to take that question. Thank you. You know, as a reminder, as I think you know, we drive demand for all our products. We have direct employees that are across the United States working with the federal and military accounts, and they work very closely with those end customers. But in many cases, these larger U.S. military and federal customers, we really need to work with the procurement specialist. We need to work with a contracting partner. The primary factor behind that consolidation from four partners to one for the federal military side was really to drive procurement efficiencies, predictability, and help us improve forecasting.
As you know, historically, it could be lumpy—some of these large U.S. federal opportunities. Mountain Horse is very unique. They have been a great partner for us. They are led by U.S. veterans. They have great procurement relationships across all levels of the U.S. government, which gives us wonderful visibility and helps us move those along in various contracting vehicles. They have experts on their team that help us get through the contracting, help us get through any integrations that are required. They can do kitting. They also do logistics. If you think about some of our orders, they may have to go and then be shipped to bases across the globe. There are a lot of complexities around that.
So they do a great job for us. And we thought now is really the right time to consolidate to one because we can gain commitments, we can gain forecasting visibility, we can gain a mix and some volume incentives, and it also is very helpful to the U.S. government because they can get these more fully configured, ready-to-go solutions out of the box and, in some cases, at a lower cost. So it certainly helps us, certainly has helped us here in 2025, and we do expect them to continue to be a great partner in 2026, and we are really excited about it.
And, Matt, you were asking about the benefits of Danbury, and a lot of efforts went into that, and I think it translates across the P&L in a few areas, but primarily within the adjusted gross margin. And, you know, we were pleased with the way the 2025 results fell out.
Joseph H. Griffith: I hope it becomes a baseline to drive it up over time. For 2026, we are targeting margin expansion of about 100 basis points from the 50.7% adjusted gross margin that we did achieve. We certainly have operational momentum now resulting from last year's structural improvements, that full year of manufacturing in Danbury being a key one, and expanded insourcing that we can do with our precision machining capabilities. And these efficiencies really create a strong foundation to absorb the quarterly variability of channels and products.
Kevin J. Knopp: And, Matt, maybe I will also add in, we are really at a point in our business with the transformation. We have done a ton to make the business much more predictable. We talked today about recurring revenue increases. We talked today about how we have so many more state and local sales, and that was a big driver of our Q4. So we are having maybe a smaller percentage now of exposure to these large, lumpy potential federal opportunities. We like them; it just can be difficult to get through contracting, and that is another reason that Mountain Horse helps us.
Matt Larew: K. That is great. And then I just wanted to ask on the new, next-gen MX908 platform. I think that is still on schedule for 2026, but curious from a timing perspective when you think that might appear, how to think about adoption. I know you have more than 3,000 placements out there.
Kevin J. Knopp: Yeah. That all remains accurate. We are really continuing to advance that next-gen platform with the commercial launch later this year. We are excited about the progress the team has made, but, obviously, for commercial and competitive reasons, we are not providing specifics today. What I would say is that we are really disrupting ourselves. We are not reacting to competitive pressure. MX908 really remains a very highly differentiated product with really limited direct competition. So we are working on that product. We think it can be compelling, but we also want to make sure we are focused on really dialing it in before broad commercialization.
So we do see demand coming as we go from both existing and also opening up some new customers due to its step change in simplicity and size, and goals that we have set for ourselves. And you are right. We have more than 3,100 MX908 devices out there. The advantage of the MX908 is it has been tested from A to Z. We have something that is very thick, probably a two-inch binder of various third-party test reports. So, obviously, we are going to be very thoughtful with the pacing and the transition, and some enterprise accounts are likely going to continue with our MX908 for some time.
And then we will be getting this out to disrupt ourselves and take us further. We absolutely believe there is a lot of opportunity there with the increased funding in the opioid crisis, fentanyl and illicit drug area, and the rising global defense spending, particularly across these NATO countries. So, absolutely, the MX908 today remains a great growth driver as we see it for 2026, but the next gen will help us set up, and if we do our jobs right, it could be pretty impactful to next year on a full-year basis.
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Matt Larew: Okay. Thank you.
Operator: Your next question comes from the line of Puneet Souda with Leerink. Your line is open. Please go ahead.
Puneet Souda: Yeah. Hi, guys. Thanks for the questions here. So first one, Kevin, when we look at the overall growth for this year, you know, 17.5 or 18 to get close to almost 18 at the midpoint. You have a number of drivers this year, obviously, including AVCAD. You have a state and local pandemic crisis ongoing still. There is international growth from Eastern Europe with disruption there and conflict. And now we have got a new conflict. So I was just wondering if you can talk to us about what takes you to the higher end versus the lower end of the guidance range on the top line growth?
And then how should we think about the current conflict, if that were to expand? Could that drive additional handheld sales? Obviously, it is very hard to tell with where we currently stand, but I just wanted to get your sense on if there are any prior precedents that you can point to that will help us understand where 908 Devices Inc. can be more helpful if this conflict were to get worse.
Kevin J. Knopp: Yeah. Absolutely. Maybe I will start with some of that and pass to Joe as well for his comments. Yes, we have some great growth drivers in front of us from a macro tailwind perspective, and that is increased funding, increased defense budgets, NATO, and global concerns, as you mentioned, which seem to unfortunately be expanding each day. Those are all drivers for increased defense spending and increased spending on the public safety side. AVCAD is absolutely, as you mentioned in the prepared remarks, a program of record we have been working on for some time with Smiths Detection that we do view as nearing its next phase.
And from our survey of those involved, I remain very encouraged and positive that we will see an award this spring, and hence we are factoring it into some of the guidance discussion today. Joe?
Joseph H. Griffith: Absolutely. And maybe to revisit and reinforce some of the drivers that can get you within the range and for us to get to the top end of the range. We do see those multiple paths to drive the organic growth, which more than double our pro forma growth from 2025, getting us to that 15% to 20% range. We expect Viper to be a key contributor, driven by our first full-year impact. It was great that we were able to get 40-plus in Q4, which we feel is meaningful. However, 2025 had less than 50; we believe it could be two to three times that in 2026.
To help get us to the top end of the range, we expect Explorer again to be a big contributor. It was last year. It is our first full year with the quant-enabled Explorer here in 2025. We shipped over 150 devices and had 40% year-over-year growth. Now we just started to tap into our federal defense channel and see this as an opportunity for 2026 and beyond. With Explorer, we are opening up a broader fire gas detection market, which is exciting. We are continuing to keep extending our platform leadership in trace chemical identification and enterprise accounts and create field placements across our state and local, international channels and the opportunity there.
And our law enforcement customers continue to rely on the MX908 and are excited at the next-gen mass spec platform as it comes out. In AVCAD, we just touched on it. We are planning on $2 million to $3 million this year in our guide. I would add, too, just as we think about the full year and maybe provide a little bit of insight on seasonality. For 2025, our revenues stepped up each quarter, and we had 44% of the revenues in the first half. Fourth quarter was about 31% of our revenues overall. So for 2026, I think there are a few factors to consider. I expect H1/H2 to be comparable to 2025.
Within H1, I would expect Q1 growth to be in the low teens—say, maybe 10%, maybe get into the 15% level—and then Q2 would be close to the higher end of our guide of 20% year-on-year growth. So there are some Q1/Q2 timing dynamics, partly due to our production limits of our new product Viper, which I mentioned had a lot of demand in Q4, requiring us to replenish material inventory. So a lot to think about, a lot of different elements there as we go into 2026, but excited in laying out the 15% to 20% growth and looking to try to achieve that top end where possible.
Puneet Souda: Got it. That is super helpful. And then just on the adjusted EBITDA side, I just wanted to get, you know, you are pointing to 50% improvement, but just wanted to understand any other levers that you have and how should we think about that cadence as well. And, you know, with the DHS shutdown, should we, I am just wondering, are you accounting for that in the first quarter here? Thank you.
Kevin J. Knopp: Yeah. Great question. I will start with the funding dynamic and pass it to you, Joe, on the EBITDA remarks. On the funding dynamics, overall, I think we are in a better spot than this time last year, because we do have 11 of the 12 federal appropriations bills complete, which means the federal government and agencies are funded through September 30. You are absolutely right. Homeland Security is the one oddball there that is in short-term extensions and remains unresolved and unfunded at the moment, so different funding demand dynamics there. In the state and local markets that rely upon grant funding that often flows through DHS, we have not seen a slowdown. Customer applications remain active.
I think we are also just entering 2026 with a materially stronger late-stage funnel. So DHS specifically, it is a little hard to quantify the impact here in the first quarter or the first half. But, again, many of the grant preparedness programs are these multi-year funding cycles, which really helps smooth it out. So, all in all, I think it is a net positive in where we sit from a funding dynamics standpoint today versus a year ago or certainly earlier in Q4.
Joseph H. Griffith: Mhmm. On the adjusted EBITDA, for 2026, we are committed to cutting our adjusted EBITDA loss in half from that approximately $10 million in 2025. We think there is another significant step down. We believe we can do it without handicapping our ability to address the expanding opportunity. We really feel that is key. It is such a great opportunity, and we need to go after it hard. I think getting to the low- to mid-single-digit millions of adjusted EBITDA loss for the full year of 2026 is huge and monumental. With our balance sheet and efficient cost structure, we can firmly control our trajectory.
We are focused on that growth and cash runway, and it is not as much of a concern at this point. And with some targeted investments in the selling and marketing side, whether it is internationally within specific opportunities on the state and local, and making sure that we get the next-gen MX off and running—a little bit of investment on the R&D side. So I think the adjusted EBITDA with volume is under our control and excited to be on that journey.
Puneet Souda: That is helpful. Okay. Thank you. Welcome.
Operator: Your next call comes from the line of Dan Arias with Stifel. Your line is open. Please go ahead.
Dan Arias: Hey, good morning, guys. Thank you. Kevin, maybe just going back to the Middle East conflict here. Can you talk through the way in which these situations at the federal level or the global level tend to impact timing and the focus of the federal government? I mean, another way to say it is, when we go to war with Iran, does that sort of suck up all the air in the room for the defense folks, DHS, military, in a way that creates some uncertainty when it comes to the stuff that you are working on with them?
Kevin J. Knopp: Yeah. No. That is a great question. We are not seeing that or feeling that today. I think the government is very large and has many prongs of engagement with 908 Devices Inc., and increasing amounts on the state and local side. It was about maybe 30% of our sales last year with a larger federal and military, and 70% was outside. I would say that if you look internationally, certainly in the Middle East, a lot of people are working from home right now. So can that slow down some of our opportunities in the Middle East? That is possible. Can this conflict increase the demand there?
I think that is also highly likely, but those deals take a long time to progress. So we are not particularly seeing a meaningful immediate impact one way or the other on that. From the U.S. government, absolutely, our troops are in harm's way. Some of our employees' children are involved in those conflicts. So we very much wish them the best. If you think from a demand side, we know some of our customers are there. We do know that some of our customers are involved, and where that plays out, we will see. But I think it is pretty balanced at the moment. We are not really expecting any disruption from it at this time.
Dan Arias: Okay. And then, Joe, you mentioned op expenses kicking a little bit higher this year. What specifically are you looking to do when it comes to the commercial efforts? And then how are you thinking about the return on that spend? Is it more immediate, or is it longer-term investment? Thanks.
Joseph H. Griffith: Yeah, great question. I think some of the opportunity that we have seen—performance on the state and local at a high level—and we see more opportunity there, as far as getting more penetration in the field, but also leveraging inside sales capabilities, outreach, remote demos, and opportunities. So adding some folks to support those efforts and drive the need and the funding sources that we are seeing on the state and local side. I think on the international side, we work with the distribution network—over, I think, it is 65, almost 70 countries that we sell through today—and those are supported by 908 Devices Inc. employees.
I think there is opportunity to build out and provide more of a commercial presence internationally, whether it is in Europe, Middle East, and APAC across the board.
Kevin J. Knopp: Yeah. International sales were about 27% of our revenues last year. That is up from 25% in 2024, and, obviously, a larger number. And so we really do believe there is a lot of potential in that area. We have channel managers and apps people across Europe, Middle East, and APAC, but we do think it is an area well worth investing.
Joseph H. Griffith: Yeah. From a timing perspective, I think the state and local can have some more immediate opportunity and contribution with those investments. They turn around a bit quicker. International is a little bit more of the long game. There might be some benefit in the back half, but definitely as we grow and continue to show growth trajectory in the years to come.
Dan Arias: Okay. Thank you.
Operator: Your next question comes from the line of Chad Wiatrowski with TD Cowen. Your line is open. Please go ahead.
Chad Wiatrowski: Hey, Kevin. Hey, Joe. Obviously, the FTIR replacement cycle is a major driver this year. In your words, you have only made a dent so far. So can you help frame the path forward in light of initial 2026 guidance, but even looking at 2027, 2028—how do you expect this to play out? And is this a durable multiyear driver?
Kevin J. Knopp: Yeah. Absolutely. Great question. To us, innovation is absolutely a focus and a multiyear driver. We just launched our Viper, our newest product, in the July time frame, and now we have shipped more than 40 devices in Q4—$3 million of revenue. So we are very excited for that early reception and those placements in the U.S. and internationally. We do think about that as a great driver for us for 2026 and beyond. There is a pretty large market opportunity we see for that and all of our FTIR products in total. And, as we called out, Explorer is another great example of that.
It delivered 40% year over year in 2025, and we again expect it to be a very significant contributor. So, yes, we really do believe that cycle—the modernization, the increased capabilities that we are bringing—does drive very durable growth. And just to recap a bit, so 2025, 58% of our revenues was mass spec–related, 42% was FTIR, and—
Joseph H. Griffith: Super excited to see that contribution within the first two years of acquisition and some of the product traction. Kevin highlighted Viper, and with our product portfolio, typically you see some of the initial opportunities being able to be secured within state, local, international, and then fed and military defense might be a little bit further down the pipeline. So as we think about growth in 2027 and beyond, that would be through some of those enterprise accounts and adoption that have to go through more of a testing cycle to get adoption. So it is not just the initial, but then the longer-term trajectory of things like Viper and Explorer, where we are just getting going.
Chad Wiatrowski: And on that same theme, I guess, for 2027 and beyond, on the deck, I see that you referenced integrations with UGVs, UAVs, and robots. Could you spend a minute explaining what applications you are referring to there and what that could actually look like?
Kevin J. Knopp: Yeah. Absolutely, Chad. That is an area that we have been planting seeds, and we continue to do that today. Those seeds are working with partners across different countries. We have talked about a collaboration with Dallas Defense Group in France; they have put it on their quad-robot. We have talked about and showcased an effort at the Indy 500, where our gas sensing technology was added to a patrolling quadrabot that went through the tunnels underneath the raceway looking for toxic industrial chemicals and any leakages or hazardous conditions. So those are the types of areas that we talk about.
As our platforms—all of our platforms—as you look at our roadmap, we are always thinking about smaller size, weight, and power. All that enables more and more opportunity in those areas. So we are trying to align our engagements out there and seed the market because we do think it opens up even further the number of sockets as we look towards 2027 and beyond.
Operator: There are no further questions at this time. I will now turn the call back to Kevin J. Knopp, CEO and Co-Founder of 908 Devices Inc., for closing remarks.
Kevin J. Knopp: Okay. Well, thank you very much for the thoughtful questions and your time today. We appreciate you listening to our call. Have a great day.
Operator: This concludes today's call. Thank you for attending.
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