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1. Company Snapshot

1.a. Company Description

CSP Inc.develops and markets IT integration solutions, security products, managed IT services, purpose built network adapters, and cluster computer systems for commercial and defense customers worldwide.It operates in two segments, Technology Solutions and High Performance Products.


The Technology Solutions segment provides third-party computer hardware and software as a value added reseller to various customers in Web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries.This segment also offers professional IT consulting services, such as planning, designing, assessment, implementation, migration, optimization, and project management; storage and virtualization solutions; enterprise security intrusion prevention, network access control, and unified threat management services; and IT security compliance services.In addition, this segment provides unified communications, wireless, and routing and switching solutions; custom software applications and solutions development and support services; optimization, maintenance, and technical support services; and managed IT services, such as monitoring, reporting, and management of alerts for the resolution and preventive general IT, as well as IT security support tasks.


Further, this segment offers managed and cloud services, such as proactive monitoring and remote management of IT infrastructure, managed and hosted unified communication services, security, and backup and replication.The High Performance Products segment offers ARIA Software-Defined Security, a cybersecurity solution; Myricom network adapters; and multicomputer products for digital signal processing applications in the defense markets.CSP Inc.


was incorporated in 1968 and is headquartered in Lowell, Massachusetts.

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1.b. Last Insights on CSPI

CSP Inc.'s recent stock performance was positively driven by strong fiscal 2025 first quarter results, with services revenue growing 17% and gross margin expansion. The company's momentum in its AZT PROTECT business and growing recurring sales as a percentage of total revenue also contributed to the positive performance. Additionally, the company's solid cash position of over $30 million and quarterly dividend declaration of $0.03 per share further boosted investor confidence.

1.c. Company Highlights

2. CSPi's Strong Fiscal 2025 Ends with Promising Growth Prospects

CSPi reported an 11% increase in revenue to $14.5 million for its fiscal fourth quarter 2025, driven by a 63% growth in service revenue to $6.4 million, which now represents 44% of total revenue. The gross margin also saw a significant improvement, increasing over 800 basis points to 37%. For the full year 2025, revenue grew 6% with a gross profit of $18.5 million or 32% of sales. The net loss was $91,000 or $0.01 per share. The company's strong balance sheet is evident with $27.4 million in cash and cash equivalents.

Publication Date: Dec -23

📋 Highlights
  • Q4 2025 Revenue Growth:: Revenue rose 11% to $14.5M, driven by 63% service revenue growth to $6.4M (44% of total revenue).
  • Gross Margin Expansion:: Improved by over 800 basis points to 37%, reflecting operational efficiency.
  • Technology Solutions Growth:: Strong demand from new/expanding customer relationships, with a high-growth service business pipeline.
  • HP Segment Traction:: AZT PROTECT cybersecurity saw 50% more Rockwell show leads YoY and dozens of new customer installations.
  • Full-Year 2025 Financials:: Revenue grew 6% to $56.8M ($18.5M gross profit, 32% margin); $27.4M cash reserves and $0.03/share dividend announced.

Business Segment Performance

The Technology Solutions business was the key driver of growth, with expanding relationships with existing customers and the acquisition of new ones. The HP segment also saw traction with strategic partners and distributors for the AZT PROTECT cybersecurity offering, resulting in dozens of new customer installations. CSPi is optimistic about its potential in the industrial IoT market, having successfully deployed its solutions in challenging environments.

Growth Prospects and Partnerships

CSPi is positioned for growth in fiscal 2026, driven by momentum in its service business and the AZT PROTECT cybersecurity solution. The company generated a significant number of leads at the Rockwell show, with a 50% increase from the previous year, and aims to double the deals closed in 2026. The partnership with Acronis is expected to yield significant revenue, although a timeline for revenue generation is not yet available. The integration of AZT PROTECT into Acronis' software is expected to be completed over the next few months.

Valuation and Dividend

With a P/S Ratio of 2.2 and an EV/EBITDA of -98.14, the market seems to have factored in the company's growth prospects. CSPi will pay a $0.03 per share dividend on July 15, 2026, representing a Dividend Yield of 0.92%. The company's strong financial position and growth initiatives are expected to drive shareholder value.

Outlook

CSPi's growth prospects are promising, driven by its service business and cybersecurity offerings. While the revenue generated from the partnership with Acronis is expected to be significant, the company does not expect incremental increases in revenue throughout the year to be predictable. The company's strong finish to fiscal 2025 and momentum in its key businesses position it for growth in fiscal 2026.

3. NewsRoom

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CSP Q1 Earnings & Revenues Fall Y/Y, Margins Rise on Service Growth

Feb -16

Source:

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CSP Inc. (CSPI) Q1 2026 Earnings Call Transcript

Feb -14

Source: seekingalpha.com

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CSPi Reports 14.6% Services Revenue Growth, Significantly Expands Gross Margin and Generates FY 2026 First Quarter Profit

Feb -12

Source: accessnewswire.com

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CSPi to Announce Fiscal 2026 First Quarter Results on February 12, 2026

Feb -06

Source: accessnewswire.com

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CSP (NASDAQ:CSPI) Shares Pass Below 200-Day Moving Average – What’s Next?

Jan -20

Source: defenseworld.net

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CSPI's Service Shift Fuels Margin Surge, AZT PROTECT Accelerates

Jan -08

Source: zacks.com

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CSPI Q4 Loss Narrows Y/Y, Revenues Grow Amid Volatility

Dec -18

Source: zacks.com

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CSP (NASDAQ:CSPI) Shares Pass Above 200 Day Moving Average – What’s Next?

Dec -17

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.72%)

6. Segments

Technology Solutions - U.S.

Expected Growth: 7.4%

Growing demand for digital transformation, increasing cybersecurity threats, and government investments in IT infrastructure are driving the growth of Technology Solutions in the U.S.

High Performance Products

Expected Growth: 10.2%

Growing demand for high-density computing solutions in data centers, driven by increasing adoption of cloud computing, big data, and IoT, fuels the growth of CSP Inc.'s High Performance Products. Energy efficiency and reliability features also contribute to the segment's growth.

Technology Solutions - United Kingdom

Expected Growth: 8.5%

The UK's increasing adoption of cloud computing, cybersecurity concerns, and the need for IT infrastructure modernization drive growth in the Technology Solutions segment. CSP Inc.'s comprehensive solutions position the company for success in this expanding market.

7. Detailed Products

Cloud Storage

Secure and scalable cloud-based storage solutions for businesses of all sizes

Compute Services

On-demand access to virtual machines, containers, and serverless computing resources

Database Management

Relational and NoSQL database services for structured and unstructured data

Security and Compliance

Comprehensive security and compliance solutions for data protection and regulatory adherence

Networking and Connectivity

High-performance networking and connectivity solutions for hybrid and multi-cloud environments

Analytics and AI

Advanced analytics, machine learning, and artificial intelligence services for data-driven insights

DevOps and Collaboration

Integrated development, testing, and deployment tools for agile teams and continuous integration

8. CSP Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for CSP Inc. is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is high due to the presence of a large number of customers with significant purchasing power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low due to the presence of multiple suppliers and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is moderate due to the presence of barriers to entry, such as high capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the market, leading to a highly competitive environment.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 5.03%
Debt Cost 3.95%
Equity Weight 94.97%
Equity Cost 10.51%
WACC 10.18%
Leverage 5.30%

11. Quality Control: CSP Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
ISG

A-Score: 5.5/10

Value: 4.5

Growth: 2.6

Quality: 5.6

Yield: 6.0

Momentum: 9.0

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
TaskUs

A-Score: 4.7/10

Value: 5.8

Growth: 8.2

Quality: 6.7

Yield: 0.0

Momentum: 3.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Hackett

A-Score: 4.5/10

Value: 2.8

Growth: 5.0

Quality: 5.7

Yield: 5.0

Momentum: 1.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Xerox

A-Score: 4.2/10

Value: 8.0

Growth: 2.3

Quality: 1.8

Yield: 10.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

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Stock-Card
Unisys

A-Score: 3.2/10

Value: 10.0

Growth: 2.2

Quality: 3.5

Yield: 0.0

Momentum: 0.5

Volatility: 3.0

1-Year Total Return ->

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Stock-Card
CSP

A-Score: 3.0/10

Value: 5.7

Growth: 3.9

Quality: 3.5

Yield: 1.0

Momentum: 1.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.11$

Current Price

9.11$

Potential

-0.00%

Expected Cash-Flows