SolarMax Technology Inc. reported third‑quarter 2025 revenue of $30.6 million, a 383% year‑over‑year increase from $6.3 million in Q3 2024. The surge is largely attributable to the first revenue recognition from its Texas battery‑storage EPC project, which contributed $24.1 million in sales but generated only modest gross profit due to the accounting treatment that defers cost recognition until project milestones are met. Gross profit for the quarter fell 24% to $956,000 from $1.3 million in the same period last year, reflecting the temporary margin compression caused by the EPC accounting rules and the higher cost of goods sold associated with the new industrial project.
The company’s revenue mix shifted noticeably toward industrial EPC work. Residential and commercial solar segments grew modestly, while the industrial EPC segment—centered on the Texas battery‑storage project—accounted for the bulk of the revenue jump. Because the EPC accounting defers gross‑profit recognition until milestone completion, the industrial segment’s gross margin was low in this quarter, pulling the overall margin down even as top‑line growth accelerated.
CEO David Hsu highlighted the milestone of recognizing revenue from the Texas project and emphasized that gross profit is expected to recover as subsequent milestones are achieved. He reiterated the company’s focus on disciplined cost management, diversification across end markets, and the ramp‑up of industrial projects, signaling confidence that the current margin compression is a short‑term accounting effect rather than a long‑term profitability issue.
While the company did not disclose sequential quarter‑over‑quarter data, the year‑over‑year growth trajectory is clear: revenue has rebounded from a 56% decline in Q3 2024, and the net loss has narrowed, indicating improved operational efficiency. The management outlook suggests that once the EPC project’s milestones are met, gross margins should improve, supporting a more sustainable profitability path.
SolarMax’s turnaround momentum is evident, but the margin compression underscores ongoing cost challenges. The company’s strategy to expand into industrial EPC projects is a key growth lever, yet the temporary accounting impact on gross profit highlights the importance of monitoring the project’s milestone schedule and cost controls. Investors should watch future guidance for updates on margin recovery and the pace of industrial project expansion.
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