Castellum (CTM) Q3 2025: First-Ever Profitability with Record Revenue and Strong Balance Sheet

This analysis is based on the GlobeNewswire report [1] published on November 7, 2025, which detailed Castellum’s Q3 2025 financial results representing a historic milestone for the company.

Castellum achieved its first-ever quarterly GAAP net income since becoming public, reporting $0.39 million in Q3 2025 [1]. This represents a dramatic turnaround from the $(7.3) million operating loss in Q3 2024. The company delivered record revenue of $14.6 million, marking 25.9% year-over-year growth from $11.6 million in Q3 2024 [1]. This performance extends the company’s streak to three consecutive quarters of year-over-year organic revenue growth, indicating sustained business momentum.

The company significantly strengthened its financial position, with cash increasing to $17.8 million from $14.7 million in Q2 2025, while total debt was reduced to $2.4 million during the quarter [1]. This creates a strong liquidity position with current and quick ratios of 3.62 [0]. The conservative debt-to-equity ratio of 16.92% provides substantial financial flexibility for future growth initiatives.

Following the earnings announcement, CTM stock demonstrated positive momentum, trading at $1.20 (+3.91% intraday) with elevated volume of 4.95 million shares compared to the average 4.09 million [0]. However, the stock remains significantly below its 52-week high of $2.83, reflecting ongoing market skepticism despite operational improvements. The stock has experienced extreme volatility with a 52-week range of $0.15 - $2.83 and year-to-date performance of -32.20%, though it shows recent stabilization with a 30-day gain of 3.02% [0].

The Q3 results follow significant strategic wins, including a $66.2 million full and open Navy contract awarded to Castellum’s SSI subsidiary on October 31, 2025 [1]. This demonstrates the company’s ability to secure substantial government contracts, though the revenue recognition timeline and impact on future quarters remain to be detailed.

Management emphasizes they “manage the business for positive cash flow rather than GAAP net income due to the large amount of non-cash charges” [1], suggesting ongoing challenges in achieving sustainable profitability under GAAP standards. The adjusted EBITDA of $1.1 million provides a more normalized view of operational performance, but the gap between adjusted and GAAP metrics warrants careful monitoring.

The company’s focus on federal government contracts creates both opportunities and risks. While providing stable, long-term revenue potential, this concentration exposes the business to government spending cycles, budget approval processes, and contract termination risks [1]. The company explicitly notes risks including “potential protests, government funding, and the government’s ability to terminate contracts for cause or for convenience” [1].

• Profitability Sustainability
  : The achievement of positive net income represents a breakthrough, but investors should assess whether this can be maintained given the company’s history of losses and reliance on non-cash charge management [1].
• Government Contract Dependency
  : Concentration in federal contracts creates exposure to political and budgetary factors beyond the company’s control [1].
• Market Volatility
  : The stock has demonstrated extreme volatility with a 571.14% one-year gain but 32.20% year-to-date decline, indicating significant investor uncertainty [0].
• Limited Financial History
  : As a relatively new public company focused on turnaround, limited historical data makes trend analysis challenging.

• Contract Pipeline Growth
  : The recent $66.2M Navy contract suggests potential for additional government awards as the company builds its reputation and capabilities [1].
• Balance Sheet Strength
  : With $17.8M in cash and minimal debt, the company has substantial flexibility to pursue strategic initiatives and weather potential market turbulence [1].
• Operational Momentum
  : Three consecutive quarters of organic revenue growth indicate sustainable business development and market acceptance [1].

• Revenue: $14.6M (+25.9% YoY) [1]
• Operating Income: $0.4M (vs. $(7.3)M loss Q3 2024) [1]
• Net Income: $0.39M (first-ever positive) [1]
• Adjusted EBITDA: $1.1M [1]
• Cash Balance: $17.8M [1]
• Total Debt: $2.4M [1]

• Current Stock Price: $1.20 (+3.91% intraday) [0]
• Market Capitalization: $111.14M [0]
• 52-Week Range: $0.15 - $2.83 [0]
• Liquidity Ratios: Current/Quick Ratio 3.62 [0]
• Debt/Equity: 16.92% [0]

The company stated that detailed Q3 2025 Form 10-Q would be filed later on November 7th [1], which will provide comprehensive financial statements, management discussion, and potentially forward guidance. Investors should also monitor the revenue recognition timeline for the recent Navy contract and any additional contract announcements.

1. Form 10-Q filing for detailed financial analysis
2. Q4 2025 performance to assess profitability sustainability
3. Progress on $66.2M Navy contract execution
4. Cash flow generation trends
5. Federal government budget environment and contract award timing

This analysis provides factual information and market context for decision-making purposes. The achievement of first-ever profitability represents a significant milestone, but the sustainability of this turnaround and the company’s ability to maintain positive momentum in the government contracting sector remain key considerations for continued evaluation.