Worksport Q4 Earnings Call Highlights
by Danessa Lincoln · The Markets DailyWorksport (NASDAQ:WKSP) executives highlighted sharp year-over-year revenue growth, significant margin expansion, and the late-2025 commercial launches of its SOLIS solar tonneau cover and COR portable power system during the company’s fiscal 2025 and fourth-quarter earnings call. Chief Executive Officer Steven Rossi and Chief Financial Officer Michael Johnston also discussed liquidity, the company’s “going concern” disclosure in its Form 10-K, and management’s 2026 targets focused on gross margin expansion and a path toward operating cash flow positivity.
Fiscal 2025 results: higher sales and materially better margins
Management said fiscal 2025 was marked by “real top-line growth and significant margin improvement.” Rossi stated that full-year net sales “nearly doubled” to $16.1 million, up 89.8% from $8.5 million in fiscal 2024, while gross margin improved to 28% from roughly 11% the prior year. Johnston added that the company’s gross margin in Q4 2025 was 30.1%, up from 26.4% in Q2 2025 and roughly 11% in Q4 2024, attributing the improvement primarily to higher capacity utilization at the company’s New York factory and improved production efficiency.
By product category, Johnston said hard tonneau covers generated $15.7 million of fiscal 2025 net sales, while the soft cover segment contributed $0.5 million. He described the shift toward hard covers as intentional, citing higher price points and better margins.
Quarterly net sales in Q4 2025 were $4.7 million, down from $5.0 million in Q3 2025. Johnston attributed the 5.4% sequential decline to a product price increase implemented in late Q3 in response to raw material pricing pressure, which reduced sales volume and affected promotional marketing efforts.
Channel mix shifts and dealer network expansion
Rossi said the company’s revenue mix changed meaningfully in fiscal 2025. Online retailer net sales increased 142% to $11.9 million from $5.0 million in 2024 and represented 74% of total net sales, up from 58% in fiscal 2024. Distributor and jobber net sales increased to $4.2 million from $0.4 million the prior year. He also noted that Worksport recorded no private label sales in fiscal 2025, compared with $3.1 million (37% of net sales) in fiscal 2024, calling the shift to Worksport-branded product a contributor to margin expansion and reduced customer concentration risk.
On the business-to-business side, Rossi said the dealer network expanded nearly six-fold in fiscal 2025 to more than 550 locations across the U.S. and Canada. He also referenced a strategic partnership with Patriot Automotive Technologies to help accelerate national penetration and said the company enforces minimum advertised price policies to protect dealer margins.
Operations, production capacity, and the cash flow break-even framework
Rossi said the company’s primary facility in West Seneca, New York is capable of producing “over 125 units within a single 8-hour shift,” and cited an August 2025 announcement of the strongest four-week production run since domestic operations began. He also described improved unit economics as fixed costs are spread across higher volumes.
Management provided a specific framework for cash flow break-even. Rossi said the company calculates it needs to sustain quarterly revenue between $9 million and $11 million at about a 35% gross margin to reach company-wide cash flow break-even, with the revenue threshold influenced by sales channel mix and product mix. He added that, at the current growth rate, management anticipates achieving $9 million in quarterly net sales within the “balance of this year,” referring to fiscal 2026.
On expenses and cash usage, Johnston said fiscal 2025 general and administrative expenses were $14.8 million, up $3.1 million (26%), primarily due to increased employment as Worksport expanded operations and developed products. He also said the company has insourced certain processes previously handled by third-party consultants, reducing professional fees as a percentage of net sales.
Net cash used in operating activities was $17.2 million in fiscal 2025 versus $10.1 million in 2024, which Johnston linked to scaling inventory and supporting growth across multiple sales channels. As of December 31, 2025, Worksport had $9.5 million of inventory, with 56% in raw materials.
Liquidity at year-end included $5.95 million in cash and $3.4 million available on a revolving line of credit, which management described as total liquidity of more than $9.3 million. Johnston said the company believes this liquidity, combined with expected margin expansion and revenue contribution from SOLIS and COR, provides sufficient runway to reach “initial operational cash flow positivity within the second half of 2026.”
SOLIS and COR launches, tariffs, and a 2026 gross margin target
Rossi said SOLIS and COR launched commercially in December 2025, but emphasized they did not significantly contribute to fiscal 2025 results because of the timing and because the ramp required working capital. He described SOLIS as a solar-integrated folding tonneau cover intended for on-vehicle power generation and COR as a portable energy storage system designed for off-grid, backup, and vocational use, either standalone or integrated with SOLIS. He reiterated previously disclosed pricing direction: the COR starter kit at $949 and SOLIS starting at $1,999 to $2,499 depending on fitment. Rossi also referenced an initial rollout plan of 1,000 COR units and roughly 900 additional battery packs, plus a limited SOLIS release that management previously characterized as about $2.5 million of near-term initial revenue opportunity.
During Q&A, Rossi said early sales and interest for COR and SOLIS were “okay” in January through March, but noted that marketing assets were only recently created after receiving product from contract manufacturing. He said the company had expected a 90- to 120-day delay before the products “really” gain traction, with more news expected in Q2 and beyond and later in the second half of the year.
Management also discussed tariff and supply chain dynamics. Rossi said soft tonneau covers and a small percentage of hard-cover raw materials are sourced from China, and the company experienced increased input costs during fiscal 2025 due to tariffs on imported goods. He also said domestic aluminum prices increased by more than 35% in fiscal 2025 and were up over 50% since the start of fiscal 2024, which he linked to supply constraints and tariff-related pricing pressure. Worksport implemented a pricing adjustment across its tonneau cover portfolio, which contributed to a temporary decline in Q4 volume, though management said demand has started to stabilize. Rossi said portable energy products currently rely on foreign lithium-ion supply chains, requiring adjustments to pricing and go-to-market strategy, and that Worksport is evaluating opportunities to move COR toward a more domestic supply chain over time.
Johnston said the company’s gross margin expansion is central to its 2026 outlook, and management set a “stable target” of 35% gross margin for fiscal 2026, supported by lean manufacturing, product portfolio expansion, and better utilization of production resources.
2026 outlook, capital strategy, and Terravis Energy/AetherLux updates
Management issued fiscal 2026 guidance of $35 million to $42 million in revenue with gross margins of approximately 35%. Johnston said the outlook assumes a full-year impact from products launched late in fiscal 2025, includes an early-2026 launch of a “game changer” hard-folding tonneau cover, and reflects continued growth in the business-to-business channel, which management said grew to represent roughly 20% to 26% of the sales mix during 2025. The company’s guidance excludes contributions from AetherLux, which management expects to reach commercial readiness in the second half of 2026, and does not assume upside from a faster-than-expected SOLIS and COR ramp.
Rossi also addressed risk disclosures and financing. He noted the fiscal 2025 Form 10-K includes an explanatory paragraph on management’s assessment of the company’s ability to continue as a going concern, which he described as a standard requirement given operating losses and Worksport’s growth-stage profile. He said the company raised about $0.5 million in net proceeds via an at-the-market offering during 2025 and amended the program in November 2025 to permit up to an additional $4 million of sales. Rossi also referenced a December 2025 warrant inducement that brought in $6.4 million at a fixed price, and said management views the ATM as a secondary tool.
On Terravis Energy and its AetherLux platform, Rossi highlighted February 2025 testing results indicating AetherLux can operate in temperatures as low as -57 degrees without energy-intensive defrost cycles, and described the company’s “ZeroFrost” technology as intended to eliminate frost cycling. He said AetherLux Pro has undergone due diligence and site visits from large corporations and U.S. government entities, including the Department of Energy’s NREL Alaska laboratory. Rossi said Worksport selected an established manufacturing partner in late Q1 2026 and expects the product to achieve certification in 2026. In response to an analyst question, Rossi said the company is considering multiple monetization paths for the heat pump technology, including licensing, divestiture, or bringing the product to market itself.
About Worksport (NASDAQ:WKSP)
Worksport Ltd. is an Israeli-based designer, developer and global supplier of innovative automotive accessories, with a primary focus on pickup truck bed covers. The company’s core offerings include a range of hard and soft tonneau covers under brands such as ROLL, FLEXIT and SOLAR, engineered to provide truck owners with enhanced utility, security and weather protection. Worksport leverages advanced polymer materials and patented folding mechanisms to deliver lightweight, durable solutions that are easy to install and operate.
In recent years, Worksport has expanded its product portfolio to incorporate solar technology, introducing integrated solar tonneau covers capable of generating power for auxiliary truck systems or charging batteries for recreational and off-grid applications.