CPS Technologies Corporation (CPSH): BCG Matrix [Dec-2025 Updated]

You're looking for a clean, authoritative breakdown of CPS Technologies Corporation's (CPSH) portfolio using the Boston Consulting Group Matrix as of late 2025, and here's the quick math on where their advanced materials business stands right now: the high-growth AlSiC power modules are definite Stars, hitting $8.8 million in Q3 revenue, while the established thermal solutions act as solid Cash Cows, underpinning a $0.3 million operating profit. But, we can't ignore the baggage-legacy defense work is a Dog that cost $3.1 million last year-and the exciting new FRA and warhead tech are Question Marks, requiring cash from the recent $9.5 million offering to see if they become tomorrow's winners. Let's map these near-term risks and opportunities to see exactly where CPSH needs to place its bets.

Background of CPS Technologies Corporation (CPSH)

You're looking at CPS Technologies Corporation (CPSH) right as it's hitting some significant operational milestones, so let's ground ourselves in what they actually do and how they've been performing through late 2025. CPS Technologies Corp. is a technology and manufacturing leader specializing in high-performance material solutions, primarily through its metal matrix composites (MMCs). These are advanced materials that combine metals and ceramics to deliver the lightweight strength and thermal properties needed across several demanding sectors.

The company's core offering is AlSiC (aluminum silicon carbide), which provides unique benefits in conductivity, weight, and reliability, making it critical for advanced circuit packaging, military applications, and energy infrastructure. CPS Technologies serves a broad range of end markets, including transportation-think electric trains, subway cars, and electric vehicles-as well as the smart electric grid, 5G infrastructure, aerospace, and defense. They also provide baseplates and housings for radar, satellite, and avionics applications.

Financially, 2025 has been a year of strong top-line acceleration. For the third quarter ending September 27, 2025, CPS Technologies reported record sales of $8.8 million, which more than doubled the revenue from the same period last year. This marked the third consecutive quarter of record revenue for the company. Looking at the trailing twelve months as of September 30, 2025, the revenue stood at $30.3M, representing a year-over-year increase of 38.22%.

Profitability is also showing a marked improvement, though margins are still a focus area. In Q3 2025, the gross margin reached 17.1%, translating to a gross profit of $1.5 million on sales. The company posted an operating income of $0.3 million and a net income of $0.2 million for that quarter, reversing the losses seen in the prior year.

Operationally, CPS Technologies has been aggressively scaling up. They added a third production shift back in September 2024 to handle the growing demand. To support this expansion, the company completed a secondary offering, raising over $9.5 million in net proceeds, and importantly, they were already debt-free following a payoff in Q1 2025. Management is planning a staged move to a larger manufacturing facility in 2026 to further increase production capacity.

The product pipeline shows a clear push into new materials and government support. CPS secured its first commercial order for AlMax® material, which is a fiber-reinforced aluminum composite, and is also developing radiation shielding. Furthermore, the company continues to win federally funded research, including several Small Business Innovation Research (SBIR) contracts, such as one focused on lightweighting the U.S. Marine Corps' Amphibious Combat Vehicle. They also announced a major $15.5 million contract with a global semiconductor manufacturer in Q3 2025.

CPS Technologies Corporation (CPSH) - BCG Matrix: Stars

The Star quadrant represents the business units or products of CPS Technologies Corporation that command a high market share within a rapidly expanding market. For CPS Technologies Corporation, this positioning is clearly held by its Advanced AlSiC Power Module Components, which are critical enablers for next-generation high-growth sectors.

The demand underpinning this segment is accelerating significantly. You saw this reflected in the core product performance, driving a record third quarter in fiscal 2025. Specifically, the revenue for Q3 2025 hit $8.8 million, which more than doubled the $4.2 million reported in the prior-year period. This marked the third consecutive quarter of record revenue for CPS Technologies Corporation. Honestly, that kind of sustained top-line momentum in a core product line is exactly what you look for in a Star.

The high market share and leadership position are further validated by significant customer commitments. Subsequent to the quarter-end, CPS Technologies Corporation secured a substantial $15.5 million follow-on contract with a major multinational semiconductor manufacturer. This contract is slated for delivery over a 12-month period beginning October 1, 2025, representing a 16.5% year-over-year increase in business from that specific customer. Furthermore, the company bolstered its R&D pipeline with two recent government-funded research awards totaling approximately $1.275 million in the quarter, including a $1.15 million Phase II STTR contract with the U.S. Army.

These components serve markets characterized by intense technological evolution and massive capital deployment. If you look at the end-markets, the growth drivers are clear:

• 5G infrastructure build-out and expansion.
• Electric Vehicles (EV) power electronics and thermal management.
• Large-scale renewable energy systems, such as wind turbines.

The macro environment for these core products is robust. The underlying Metal Matrix Composites (MMC) market, where CPS Technologies Corporation is a key player, is projected to grow at a 9.8% CAGR through 2033. This high market growth rate necessitates significant investment to maintain share, which is why the company closed a public offering in October 2025, bringing in net proceeds of $9.5 million, earmarked in part for expanding production capabilities, including a planned move to a facility with nearly double the usable floor space.

Here's a quick look at the financial performance metrics that define this Star's current success as of the end of Q3 2025:

Sustaining this success means CPS Technologies Corporation must continue to invest heavily in capacity and R&D to fend off competitors and capture the full market expansion, keeping this unit a cash consumer for now, but with a clear path to becoming a Cash Cow when the high-growth phase eventually moderates.

CPS Technologies Corporation (CPSH) - BCG Matrix: Cash Cows

You're looking at the bedrock of CPS Technologies Corporation (CPSH)'s current financial stability, the segment that generates more than it consumes. These are the established AlSiC Thermal Management Solutions for Mature Industrial Applications.

This core business provides stable, high-volume revenue from long-standing customers, particularly those in the traction (electric trains) and mass transit sectors. These are the reliable workhorses of the portfolio, where market share is already established, and the focus shifts to efficiency rather than aggressive market capture.

This segment underpins the company's return to profitability, generating a Q3 2025 operating profit of $0.3 million. That turnaround is significant, especially when compared to the prior-year period.

Here's a quick look at the profitability metrics from that quarter:

The core business secured a $13.3 million supply agreement that ran through September 2025, providing solid, predictable cash flow. Also, CPS Technologies Corp. announced a follow-on contract after the quarter closed, valued at approximately $15.5 million from a multinational semiconductor manufacturer, with components set for delivery over 12 months starting October 1, 2025. These components will be integrated into systems supporting high-speed rail as well as energy and grid infrastructure.

This high market share in specific, reliable niches allows for margin expansion through production efficiencies. You can see the direct impact of these efficiencies:

• Gross margin reached 17.1 percent in Q3 2025.
• This compares favorably to a gross loss of (12.3) percent of revenue in the fiscal 2024 third quarter.
• Revenue in Q3 2025 more than doubled the prior-year period, coming in at 107% higher than Q3 2024.

The company is investing some of the cash generated into supporting infrastructure, evidenced by the $9.5 million in net proceeds from a public offering used for general corporate purposes, including the expansion of production capabilities through a move to a larger facility. That's how you milk a cow effectively, ensuring it stays productive.

CPS Technologies Corporation (CPSH) - BCG Matrix: Dogs

Dogs, are units or products with a low market share and low growth rates. They frequently break even, neither earning nor consuming much cash. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture.

For CPS Technologies Corporation (CPSH), the segment fitting the Dogs profile centers on the Legacy or Completed Defense Contracts, exemplified by the HybridTech Armor® product line. Dogs are in low growth markets and have low market share; these units should be avoided and minimized, as expensive turn-around plans usually do not help.

The major HybridTech Armor® contract for aircraft carriers was completed in April 2024, resulting in a significant revenue drop-off in that specific line. This completion immediately shifts the product line into the Dog quadrant due to the sudden cessation of a major revenue stream. The expectation is a lack of a large, immediate follow-on order in this specific armor product line, meaning minimal 2025 revenue contribution until a new, large-scale contract is secured. This segment contributed to a $(3.1) million net loss in 2024, highlighting its cyclical and non-recurring nature, which is characteristic of a unit consuming cash rather than generating it when not actively under contract.

The financial impact of this contract conclusion is stark when looking at the full fiscal year 2024 performance compared to 2023:

This segment is defined by its low current market share and low-to-no growth until a new, large-scale contract is secured. The quarterly performance in the latter half of 2024 clearly illustrates the immediate vacuum left by the contract's end, which CPS Technologies Corporation is working to fill with other product lines like Fiber Reinforced Aluminum (FRA) and radiation shielding.

Here's a look at the quarterly performance metrics that reflect the immediate post-contract environment, which sets the stage for the 2025 Dog status:

• Q4 2024 Revenue was $5.9 million, down from $6.7 million year-over-year.
• Q3 2024 Revenue was $4.2 million, a significant drop from $6.3 million year-over-year.
• Q2 2024 Gross Margin was (4.6)%, compared to 29.6% in Q2 2023.
• Q3 2024 Gross Loss was $(0.5) million, or a (12)% margin.
• Q4 2024 Net Loss was $(1.0) million, reversing from a net income of $0.2 million in Q4 2023.

The company is actively trying to pivot away from this dependency, as evidenced by securing three Phase I SBIR contracts in early 2025, each valued at $250,000 over six months, and announcing its first commercial sale of radiation shielding. Still, these new, smaller awards have not yet replaced the scale of the completed armor business.

CPS Technologies Corporation (CPSH) - BCG Matrix: Question Marks

You're looking at the emerging bets CPS Technologies Corporation is placing on future growth, the classic Question Marks in the portfolio. These are areas with high market potential but low current market share, meaning they are currently consuming cash to build that share.

The strategy here is clear: heavy investment to push these into the Star quadrant or divest if the traction isn't there. For CPS Technologies Corporation, this centers on new material science and defense programs that require upfront capital to scale.

These projects have high future market potential but currently consume cash and have low market penetration. The need for capital to support this growth is evident in recent financing activities.

• New R&D-Driven Materials and Defense Technology Programs.
• Fiber Reinforced Aluminum (FRA) technology, licensed in 2024, is targeting lightweight military vehicle components with low current market share.
• Controlled fragmentation tungsten warhead development, backed by a \$1.15 million Phase II Army STTR contract in late 2025.
• New AlMax™ material and radiation shielding products, which saw their first commercial sales in 2025, are in high-potential but unproven markets.

The investment required for these initiatives is substantial. The October 2025 public offering, which generated gross proceeds of approximately \$10.35 million upon closing on October 8, 2025, was partially earmarked for expanding production capacity to meet customer demand, including moving to a larger facility. The planned use of the net proceeds included capital expenditures and other investments.

Here's a quick look at the financial anchors tied to these high-growth, low-share ventures as of late 2025:

The AlMax™ material, which management noted has performance properties better than aluminum, secured its first order in the second quarter of 2025. This aligns with the overall revenue strength, as Q2 2025 revenue hit a record of \$8.1 million. The defense programs, like the tungsten warhead contract, represent the fifth federally funded project for CPS Technologies Corporation in 2025.

You need to watch the market share capture on these new lines closely. If the investment doesn't translate to rapid market share gains, these cash consumers will quickly drift toward the Dog quadrant as growth slows.