MONTREAL — PyroGenesis Inc., a Canadian company specializing in plasma-based technologies for heavy industry and defense, reported its financial results for the fourth quarter and full year ended December 31, 2025, on March 30, 2026. The announcement highlighted a challenging year marked by geopolitical tensions, tariffs, supply chain disruptions, and energy market volatility, which impacted revenues across multiple sectors. Despite these headwinds, the company emphasized technological advancements and new contracts as signs of future growth.
Revenue for the fourth quarter of 2025 totaled $3.3 million, down $0.9 million from $4.2 million in the same period of 2024. For the full year, revenues came in at $12.6 million, a $3.1 million decrease from $15.7 million in 2024. According to the company's press release, these declines were primarily due to the timing of project milestones and the completion of certain large projects from the prior year, though growth in areas like torch systems, SPARC, and biogas projects provided some offset.
P. Peter Pascali, President and CEO of PyroGenesis, acknowledged the shortfall in a statement. “In 2025, despite exceptionally volatile geopolitical, tariff, supply chain, and energy supply dynamics that caused uncertainty across various heavy industry sectors and regions, we continued to press forward to achieve notable progress on several fronts,” Pascali said. He added, “While our financial performance in 2025 did not meet our expectations, as we move into 2026 we are focused on converting our technological progress into improved financial performance, while maintaining the flexibility needed to continue navigating a challenging macroeconomic landscape.”
The company's multi-segment approach, described by Pascali as a “multi-legged stool,” aims to build sales resilience amid ongoing uncertainties. This diversification has enabled continued investment in strategic initiatives. Pascali noted that at the technology level, these efforts are yielding “important dividends.”
One area of significant progress was in plasma torch improvements. Data from an in-field system showed energy savings of up to 45% compared to legacy diesel burners. Tests for casting ladle heating demonstrated an 80% reduction in energy use versus natural gas burners. More recently, a live furnace trial with clients Rio Tinto and Alco revealed comprehensive benefits: a 35% energy reduction, 20-27% shorter cycle times, 24-55% less dross generation, maintained metal quality, and 40-50% lower hydrogen content in the metal.
“These are the type of real-world results that attract interest from existing and new sectors,” Pascali said. “In fact, we made our first steps into several new industries during 2025, including radioactive waste, lithium battery recycling, and plastic waste management, while growing previous years’ initial interest into firm contracts, such as with the two contracts of $1.2- and $1.3 million respectively for clients in the cement industry.”
PyroGenesis also secured major contracts with aluminum giants Norsk Hydro ASA and Constellium, both of which are initiating live furnace tests using the company's plasma torches. These developments underscore the broadening appeal of PyroGenesis's technology in the aluminum sector, a key focus for the company.
In materials production, adoption of titanium metal powders gained traction. The company announced orders for both fine and coarse cuts of titanium powder and even created a new market by contracting to sell “off-cut” powder generated during the plasma atomization process. Additionally, the fumed silica reactor project advanced rapidly—from a government grant in under five years to an operational pilot plant that produced material meeting or exceeding several commercial grades in 2025. These milestones led to the formation of a new Materials Production business unit, which Pascali described as holding “significant promise for the future.”
Financially, cost of sales and services for the fourth quarter rose to $2.8 million from $2.5 million in the prior year, driven by higher direct material costs of $1.7 million, up from $0.5 million, as torch system projects moved into late-stage fabrication. This was partly offset by lower subcontracting, employee compensation, and manufacturing overhead. As a result, gross profit fell to $0.6 million, or 17% of revenue, compared to $1.7 million, or 41%, in Q4 2024. The lower margin stemmed from increased material consumption and shifts in project mix.
For the full year, cost of sales decreased to $8.8 million from $10.4 million, reflecting lower employee compensation ($3.3 million vs. $3.9 million) and manufacturing overhead ($0.9 million vs. $1.5 million), alongside modest declines in direct materials. Subcontracting remained stable at $0.5 million. Management noted that the composition of costs—varying between labor, materials, and subcontracts—aligns with the nature of long-term contracts, and inflationary pressures have not always been passed on to customers.
Selling, general, and administrative expenses (SG&A) saw a sharp increase in the fourth quarter to $5.8 million from $1.3 million, largely due to a $3.4 million unfavorable variance in expected credit losses and bad debt recoveries. The prior year had benefited from $3.5 million in recoveries that did not recur. Excluding these, SG&A would have been lower. Professional fees rose to $1.3 million from $0.7 million, including non-recurring patent-related costs, while insurance and other expenses climbed to $1.0 million from $0.3 million. Foreign exchange losses of $0.2 million contrasted with prior gains, and depreciation increased due to lease terminations.
Offsetting some increases, share-based compensation dropped to $0.5 million from $1.2 million, and employee compensation fell to $2.3 million from $2.6 million amid cost containment. For the full year, SG&A totaled $15.7 million, up $4.7 million from $11.0 million, again driven by the $6.1 million variance in credit recoveries. Excluding non-recurring items, expenses were relatively stable, with declines in share-based compensation ($0.7 million vs. $2.1 million) and employee costs ($8.7 million vs. $9.8 million).
Research and development costs netted a $0.1 million recovery in Q4 2025, compared to a $0.1 million expense in Q4 2024. The press release did not provide full-year R&D details, but the shift to a recovery suggests some grant funding or reimbursements supported ongoing innovation.
Looking ahead, PyroGenesis reported a backlog of signed and awarded contracts totaling $47.8 million as of March 30, 2026, with 84% in U.S. dollars. This excludes a contract with Varennes Carbon Recycling, following that company's filing for protection under the Companies' Creditors Arrangement Act on March 21, 2025. Revenues from the backlog are expected over up to three years as performance obligations are met.
Pascali concluded on an optimistic note: “We have not achieved all of our financial targets for 2025. Having said that, I firmly believe that as we continue to innovate and as more results are revealed from client projects in the field, our revenue will catch up to our technical progress. 2025 gave us the confidence to proclaim that it is now just a matter of time.” He thanked investors and expressed excitement for the path forward with major partners in global heavy industry.
The results come as PyroGenesis, listed on the TSX as PYR, OTCQX as PYRGF, and FRA as 8PY1, continues to position itself in high-growth areas like sustainable materials processing and defense applications. While 2025's financials reflect broader industry challenges, the company's technological validations and contract wins suggest potential for recovery in 2026, particularly as trials with partners like Rio Tinto, Norsk Hydro, and Constellium yield further data.