Breaking Down Hurco Companies, Inc. (HURC) Financial Health: Key Insights for Investors

You're looking at Hurco Companies, Inc. (HURC) and trying to reconcile two conflicting signals: operational improvement in the face of a softening global market, which is the classic mid-cycle dilemma for industrial tech. For the first nine months of fiscal year 2025, the company managed to narrow its net loss to $12.08 million, a clear step up from the $15.17 million loss in the prior-year period, showing their cost-cutting efforts are working. But here's the quick math that matters for the near-term: while third quarter (Q3 2025) sales were up 7% to $45.81 million-thanks to a massive 48% surge in the Asia Pacific region-new orders simultaneously dropped a worrying 22% to just $41 million. That decline in new orders, which are your future revenue, tells you customers are defintely delaying capital expenditure (CapEx), and that backlog erosion is the primary risk to watch, even with the company maintaining a strong cash position of over $44 million as of July 31, 2025.

Revenue Analysis

You need to know where Hurco Companies, Inc. is actually making its money, and the simple truth is that while the top-line revenue for the third quarter of fiscal year 2025 looks positive, the underlying trends in order volume signal caution. The company's core business remains the sale of Computer Numerical Control (CNC) machine tools, plus the accessories and service fees that follow.

For the third quarter of fiscal year 2025, Hurco Companies, Inc. reported total sales and service fees of $45.81 million, which is a solid 7% increase compared to the same quarter last year. That's good on the surface, but for the nine-month period ending July 31, 2025, the growth is nearly flat, rising by less than 1% to $133.087 million. Honestly, a lot of that Q3 bump came from a 3% favorable currency impact when translating foreign sales back to U.S. dollars.

Here's the quick math on the geographic segments-this is where the story gets interesting, as growth is far from uniform. The Americas and Asia Pacific regions are driving the sales, while Europe is essentially stalled. You can see how much each area is contributing to the growth engine:

• Americas sales increased by 10% in Q3 2025, primarily from higher shipments of Hurco and Milltronics machines.
• Asia Pacific sales surged by a massive 48% in Q3 2025, largely due to increased sales of Takumi machines.
• European sales were essentially flat in the third quarter.

The biggest change in the revenue stream isn't the geographical mix, but the product mix and the forward-looking demand signal. The company's gross profit margin contracted in Q1 2025 from 22% to 18% because the sales mix shifted toward competitively priced, lower-margin vertical milling machines, especially in the Americas and Europe. What this estimate hides is the chilling effect of macroeconomic uncertainty on capital spending. Orders-the revenue pipeline-declined by a sharp 22% in Q3 2025 to just $41 million. That drop points to potential near-term revenue softness, and it's the key metric you should be watching.

For a deeper dive into who is betting on this segment-specific growth and why, you should read Exploring Hurco Companies, Inc. (HURC) Investor Profile: Who's Buying and Why?

The regional breakdown for the nine months of fiscal year 2025 shows the uneven recovery, too:

So, the action item is clear: keep a close eye on the next earnings report to see if that severe order decline translates into a revenue dip. Finance: track the orders-to-sales conversion rate by Friday.

Profitability Metrics

You're looking at Hurco Companies, Inc. (HURC) and trying to figure out if the recent financial performance is a blip or a trend. The direct takeaway is that while the company is aggressively managing costs, its profitability remains under significant pressure due to a shift in sales mix toward lower-margin products and a challenging global demand environment for capital equipment. Simply put, they are selling more of the cheaper machines.

For the trailing twelve months (TTM) ended July 31, 2025, Hurco Companies, Inc. reported total revenue of approximately $186.79 million. This top-line figure, however, is not translating to positive earnings. The TTM Gross Profit was around $37.42 million, resulting in a Gross Profit Margin of approximately 20.03%. The company is operating at a loss, with a TTM Net Loss of about $13.52 million, which translates to a Net Profit Margin of roughly -7.24%.

Margin Trends and Operational Efficiency

The trend in profitability throughout fiscal year 2025 shows a struggle to maintain gross margin (the percentage of sales remaining after deducting the cost of goods sold), but also a clear effort to control selling, general, and administrative (SG&A) expenses. This is a classic move: when the top line is shaky, you cut what you can. Here's the quick math on the quarterly margins:

• Q1 2025 Gross Margin: 18% on sales of $46.41 million.
• Q2 2025 Gross Margin: 19% on sales of $40.87 million.
• Q3 2025 Gross Margin: 20% on sales of $45.81 million.

The Q1 2025 gross margin decline to 18% from 22% in the prior year period was due to lower sales volume of higher-performance VMX series machines and the negative impact of fixed costs being allocated over lower-volume sales. However, the subsequent quarter-over-quarter improvement to a 20% gross margin in Q3 2025 suggests that cost-saving measures and an improved mix of machine sales in Europe are starting to show a defintely positive effect.

On the operational efficiency front, the TTM Operating Margin stands at approximately -4.44%. While negative, Hurco Companies, Inc. is showing discipline by reducing SG&A expenses. For example, Q1 2025 SG&A was $10,382,000, or 22% of sales, down from 26% of sales in the prior year period. This reduction reflects lower discretionary spending and reduced sales commissions, which is a necessary action when facing a softer market.

Benchmarking Against Industry Peers

When you stack Hurco Companies, Inc.'s profitability against the industry average for Machine Tools, Metal Cutting Types (SIC 3541), the gap is significant. This comparison helps you gauge how much of the company's performance is company-specific versus market-wide cyclicality.

Here is a comparison of Hurco Companies, Inc.'s TTM metrics with the closest available industry averages (2024 data is the most recent benchmark):

The company is lagging far behind its peers. The 20.03% Gross Margin is a full 11 percentage points below the industry average of 31.2%. This suggests a fundamental issue with their cost of goods sold or pricing power relative to competitors. The negative Operating and Net Profit margins confirm that, even with SG&A cuts, the company is not covering its operating costs, let alone generating a profit. You need to see a path to closing that 11-point gross margin gap. For more on the company's long-term strategy, you can review their Mission Statement, Vision, & Core Values of Hurco Companies, Inc. (HURC).

Debt vs. Equity Structure

When you look at Hurco Companies, Inc. (HURC)'s balance sheet, the first thing that jumps out is the company's extremely conservative approach to financing. They lean heavily on shareholder equity (the money owners have invested) and very little on debt, which is a strong signal of financial stability, especially in the cyclical industrial machinery sector.

For the most recent quarter in fiscal year 2025, Hurco's capital structure is remarkably light on external borrowing. The company reported total debt of just $12.31 million. Compare this to their shareholders' equity, which stood at approximately $202.28 million as of April 30, 2025. This tells you Hurco is financing its operations almost entirely through its own capital, not through lenders. That's a huge advantage when economic uncertainty hits.

Debt-to-Equity: A Clear Advantage

The most telling metric here is the Debt-to-Equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of its shareholders' equity. Hurco's D/E ratio is a remarkably low 6.04% (or 0.0604). Here's the quick math on what that means for investors:

• Hurco's Total Debt / Total Equity (MRQ): 0.0604
• Industrial Machinery Industry Standard D/E: 0.5002

Honestly, Hurco's ratio is nearly ten times lower than the industry standard of around 0.50 for industrial machinery and supplies. This low ratio signals minimal financial risk and substantial capacity to take on debt if a major growth opportunity or acquisition were to arise. They have a ton of dry powder, so to speak, without having to issue new shares and dilute your ownership.

Breaking Down the Debt Components

The $12.31 million in total debt is split between long-term and short-term obligations, but the long-term component is the largest piece. The Long-Term Debt / Equity ratio was 3.98%, meaning roughly $8.05 million is long-term debt, and the remaining $4.26 million is short-term debt.

This balance shows a preference for sustained, manageable obligations over immediate, high-pressure short-term loans. The fact that their current ratio is also high-4.43 in the most recent quarter-confirms they have ample liquid assets to cover that short-term debt and all other current liabilities. They are defintely not scrambling for cash.

What this estimate hides is the specific nature of this debt-whether it's a revolving credit facility or term loans-but the low overall amount minimizes the need for a deep dive into covenants. We haven't seen any major news about Hurco Companies, Inc. issuing new bonds or securing a credit rating change in 2025, which is consistent with a company that is managing its funding internally and prioritizing cash flow strengthening to support its balance sheet.

The company is clearly balancing its financing by favoring equity funding, retaining earnings, and keeping its debt load low, which is a prudent strategy given the recent net losses reported in the first half of fiscal year 2025. This conservative capital structure is a key factor in their investor profile, which you can explore further at Exploring Hurco Companies, Inc. (HURC) Investor Profile: Who's Buying and Why?

Liquidity and Solvency

You need to know if Hurco Companies, Inc. (HURC) has enough liquid assets to cover its bills right now, and the answer is a resounding yes. The company's liquidity position is strong, but you defintely need to watch the cash flow trends, particularly given the current market uncertainty.

The most recent data shows a very healthy short-term position, which is a key strength for a cyclical business like machine tools. As of the most recent quarter (MRQ) in 2025, Hurco Companies, Inc. reported a Current Ratio of 4.43 and a Quick Ratio of 1.40. A Current Ratio of 4.43 means the company has $4.43 in current assets for every dollar of current liabilities. That's a huge buffer. The Quick Ratio, which strips out inventory-often the least liquid current asset for a manufacturer-is still a solid 1.40, well above the safe benchmark of 1.0.

Here's the quick math on what drives that strength:

• Total Current Assets (TTM/MRQ): $228.29 million
• Total Current Liabilities (TTM/MRQ): $51.54 million
• Inventory (TTM/MRQ): $147.54 million

Working capital-the difference between current assets and current liabilities-has been trending high, but with some recent shifts. At the end of Q1 fiscal year 2025 (January 31, 2025), working capital stood at $172.591 million, a slight dip from the prior fiscal year end, driven primarily by decreases in inventory and accounts receivable. This tells me they are managing their short-term obligations very comfortably, but the decrease in receivables and inventory suggests a cooling in sales or a deliberate effort to trim inventory, which is a good thing in a downturn.

When you look at the cash flow statement, you get a clearer picture of where the money is actually coming from and going. This is the truth behind the ratios, which are just snapshots. For the trailing twelve months (TTM) leading up to Q3 2025, the cash flow picture is mixed but manageable.

The positive Cash from Operations of $12.67 million (TTM) is crucial; it shows the core business is generating cash, even while reporting a net loss for the period. The negative cash from investing of $2.76 million (TTM) is normal, as it reflects money spent on property, plant, and equipment (CapEx) to keep the business running. Also, the company has no long-term debt, which is a massive strength in a high-interest-rate environment. You don't have to worry about a debt wall.

The biggest potential liquidity concern isn't the current balance sheet, but the forward-looking trend: orders decreased by 22% in Q3 FY2025. This drop suggests future revenue and, consequently, future operating cash flow, could be pressured. However, the company is actively managing this by reducing operating costs and maintaining a strong cash position of over $44 million as of July 31, 2025. They are focused on cash flow management and cost reduction, which is exactly what you want to see. For a deeper dive into the company's full financial picture, you can check out Breaking Down Hurco Companies, Inc. (HURC) Financial Health: Key Insights for Investors.

Valuation Analysis

You're looking for a clear signal on Hurco Companies, Inc. (HURC), and the numbers tell a story of deep value potential mixed with significant near-term risk. Right now, Hurco is trading at a price that suggests it is undervalued on a tangible asset basis, but its negative earnings mean the stock is defintely not a safe bet for a quick turnaround.

The stock last closed at $16.28 on November 21, 2025, giving the company a market capitalization of roughly $111.39 million. The core of the valuation debate rests on the company's ability to move from its current negative earnings back to profitability, which is a major hurdle in the current industrial environment. Here's the quick math on the key multiples.

When we look at the standard valuation metrics, the picture is mixed because of the company's recent performance. The Price-to-Earnings (P/E) ratio, which compares the current stock price to its per-share earnings, is 'Not Meaningful' (NM) or negative, sitting around -8.29 for the trailing twelve months (TTM) because Hurco has reported negative earnings per share (EPS) of -$2.10. You simply can't use a negative P/E to value a company.

The Enterprise Value-to-EBITDA (EV/EBITDA) ratio, which measures the total value of the company (Enterprise Value) against its operating profitability before non-cash charges (Earnings Before Interest, Taxes, Depreciation, and Amortization), is also 'Not Meaningful' (NM). This tells us that, on an operational cash flow basis, the company is not generating enough profit to make the multiple calculable in a standard way. However, the Price-to-Book (P/B) ratio is a standout at just 0.48. This means the stock is trading for less than half of its book value per share. That's a strong indicator of an undervalued asset, but only if the assets are truly worth what the balance sheet says they are.

The stock price trend over the last year shows a clear descent from its peak. Hurco's 52-week range runs from a low of $13.19 to a high of $23.76. The current price of $16.28 is much closer to the low, reflecting the market's concern over the negative earnings reported throughout the 2025 fiscal year, including a net loss of $0.62 per diluted share in the second quarter. The stock is in a wide and falling trend.

Here is a summary of the key valuation metrics for Hurco Companies, Inc. (HURC) as of November 2025:

From an income perspective, Hurco has essentially suspended its dividend. While the company paid a quarterly dividend of $0.16 per share earlier in the year, the last ex-dividend date was March 27, 2024, and no dividends have been paid since. This means the current dividend yield is 0.00%. The payout ratio is also negative, at -0.01%, which is expected when a company is losing money. Don't count on income from this stock right now.

Wall Street's view is overwhelmingly cautious. The analyst consensus rating for Hurco Companies, Inc. is a clear Sell. This consensus comes from the single analyst who has issued a rating in the last 12 months, and it reflects the poor fundamental performance, especially the negative EPS. This negative outlook suggests that the market believes the company's assets may be impaired or that the return to profitability is a long way off. For a deeper dive into the operational challenges driving these numbers, check out Breaking Down Hurco Companies, Inc. (HURC) Financial Health: Key Insights for Investors.

Your action here is simple: If you are a value investor betting on a liquidation or a major operational turnaround, the P/B of 0.48 is compelling. But if you need positive earnings or a dividend, you must wait until the company can deliver a profitable quarter. Finance: Monitor Q4 2025 earnings guidance for a positive EPS forecast by the end of the year.

Risk Factors

You're looking at Hurco Companies, Inc. (HURC) and seeing a company navigating a tough, cyclical industry, so the key takeaway is this: their biggest risk is a prolonged global slowdown in capital expenditure (CapEx), but their strong liquidity position gives them a long runway to weather it. The firm's financial health is under pressure from external market forces, which translated into a nine-month net loss of over $12 million in fiscal year 2025.

External Risks: The Capital Expenditure Freeze

The primary risk for Hurco Companies, Inc. is the macro-economic environment, specifically the hesitation of small-to-midsize manufacturers to commit to new capital expenditure (money spent by a business to acquire or upgrade physical assets like machinery). The CEO noted significant uncertainty across global markets, and we see this playing out in the order books.

New orders for the first six months of fiscal year 2025 were down 11% compared to the prior year, totaling $83.79 million. This decline is not uniform; it's concentrated in their core markets. Orders in the Americas dropped by 30% in Q1 2025, and overall European sales were down 5% for the first six months, as customers defintely delay purchases amid economic uncertainty and higher interest rates.

Here's the quick math on regional performance through Q2 2025, which shows the pressure points:

• Americas Sales (Q2 2025): Decreased 9% year-over-year.
• Europe Sales (Q2 2025): Decreased 5% year-over-year.
• Asia Pacific Orders (Q2 2025): Increased a massive 74%, a critical bright spot.

The machine tool industry is highly cyclical, and we are clearly in a down-cycle for their key Western markets.

Internal and Financial Risks: Margin Pressure and Losses

The external demand issue directly impacts the company's financial results, creating a clear operational risk: lower sales volume of high-margin products. When customers pull back, they often prioritize lower-cost machines, which hurts profitability.

For the first quarter of fiscal year 2025, the gross profit margin dropped from 22% to 18%, largely because of lower sales of their higher-performance VMX series machines in the Americas and Europe. While the margin has since recovered to 20% by Q3 2025, the firm is still operating at a loss.

What this estimate hides is the cumulative loss, which is significant. For the nine months ended July 31, 2025, the total net loss was $12,076,000, though this is an improvement from the $15,166,000 loss in the same period a year earlier. The company's smaller size compared to global competitors also limits their ability to sustain prolonged periods of investment, which is a structural competitive risk.

The net losses for the first three quarters of fiscal year 2025 were:

Mitigation Strategies and Clear Actions

Hurco Companies, Inc. is not standing still; they are executing a clear strategy to manage the downturn. Their focus is on financial discipline and product innovation to position for the eventual market rebound.

The most crucial action is their commitment to liquidity. As of July 31, 2025, the company held over $44.49 million in cash and cash equivalents, which is a strong cash position that provides a buffer against ongoing losses and market volatility. They also have access to a $40 million unsecured revolving credit facility, which they have not drawn upon.

Their operational and strategic mitigation efforts include:

• Cost Reduction: Actively cutting costs and optimizing operations to improve cash flow and reduce the net loss, as evidenced by the improvement in the nine-month loss figure.
• Product Development: Continuing to invest in new products, including advancements in automation and AI-driven feature detection, to keep their portfolio competitive when CapEx returns.
• Geographic Diversification: Leveraging the strong demand in the Asia Pacific region, where orders surged by 74% in Q2 2025, to partially offset weakness in the West.

You can read more about the company's full financial picture in Breaking Down Hurco Companies, Inc. (HURC) Financial Health: Key Insights for Investors.

Action Item: Portfolio Managers: Monitor Q4 2025 order intake data, particularly in the Americas and Europe, to gauge if the CapEx rebound is starting as anticipated in the second half of the year.

Growth Opportunities

You're looking at Hurco Companies, Inc. (HURC) and seeing a company navigating a tough, cyclical market, but honestly, the real story is in the groundwork they're laying for the next upswing. The direct takeaway is this: their long-term growth hinges on proprietary technology-specifically, their push into Artificial Intelligence (AI) for machining-and their ability to capitalize on regional manufacturing shifts.

Here's the quick math on where they stand: for the trailing twelve months ending July 31, 2025, Hurco Companies, Inc.'s revenue was $186.79 million, with a year-to-date net loss of $12.1 million through the first nine months of fiscal year 2025. Still, the underlying regional sales are showing pockets of strength that you need to focus on.

Technology and Product Innovations: The AI Edge

The most significant growth driver is product innovation, and for Hurco Companies, Inc., that means AI. They've made a clear strategic move toward developing Autonomous Machining Centers by integrating AI, mechatronics, and simulation technologies. At the 2024 International Manufacturing Technology Show (IMTS), they unveiled AI-driven features that can slash programming time from minutes down to just seconds. That's a massive productivity gain for their job shop customers.

This tech push is a true competitive advantage because of their complete vertical integration (owning the entire Computer Numeric Control (CNC) machine, control, and software) for their Hurco and Milltronics brands. This allows them to integrate new features like AI faster than competitors who rely on third-party controls. It's a powerful moat.

• AI integration: Cuts part programming time significantly.
• Vertical integration: Speeds up innovation and quality control.
• Diverse portfolio: Offers Hurco, Milltronics, and Takumi brands.

Market Expansion and Strategic Focus

While the overall market remains soft-evidenced by a 22% decline in orders in the third quarter of fiscal year 2025-Hurco Companies, Inc. is seeing strong regional performance that maps to global manufacturing trends. Specifically, sales growth in the Americas was 10% in Q3 FY2025, and Asia Pacific sales spiked by 48% in the same quarter, driven by shipments to China and India. This regional strength, especially in the Americas, positions the company to benefit from the ongoing trend of manufacturing reshoring in the U.S..

Management is also focused on financial discipline, which is smart when demand is soft. They've reduced Selling, General, and Administrative (SG&A) expenses and optimized working capital, boosting cash and equivalents to $44.49 million as of July 31, 2025. Plus, they are actively evaluating potential acquisitions to drive long-term sustainable growth, which could be a quick way to add new technology or market share. They are also executing a share repurchase program, with $19.68 million remaining for future buybacks, which signals confidence in the stock's value.

To be fair, analysts project that a short-cycle recovery could support double-digit revenue growth in fiscal year 2025 or 2026, but that's a high-risk play dependent on broader economic recovery and capital expenditure cycles. The near-term is about managing costs and investing in the future, which they defintely are doing.

Key Financials and Projections Snapshot (FY2025)

Here's a snapshot of the most recent quarterly performance, showing the current state of play:

The clear action here is to monitor the adoption rate of their new AI-driven machine tools. If those sales start accelerating, it will signal that their technology advantage is converting into market share. You can dig deeper into the shareholder base and strategy by Exploring Hurco Companies, Inc. (HURC) Investor Profile: Who's Buying and Why?