CDT Environmental Technology Investment Holdings Limited (Nasdaq: CDTG) filed its annual report on Form 20-F for the fiscal year ended December 31, 2025, revealing a significant decline in financial performance. Total revenues fell 38.8% to approximately $18.2 million, compared to $29.7 million in 2024, primarily due to delays in sewage treatment system installations and reduced demand amid China's economic downturn. The company reported a net loss of $10.3 million, contrasting with net income of $1.4 million the prior year, driven by a $14.7 million provision for credit losses and a $1.7 million increase in stock-based compensation.
Revenue from sewage treatment system installations decreased by 39.2% to $17.3 million, attributed to prolonged local government review processes and fewer new projects secured in 2025. Sewage treatment services revenue also fell 29.8% to $0.9 million. Despite the top-line decline, gross profit margin improved to 41.5% from 37.8%, supported by a higher proportion of profitable projects completed during the year.
Total operating expenses more than doubled to $19.2 million, largely due to the credit loss provision. The company noted that its customers are mainly state-owned enterprises backed by local governments, and it expects to realize outstanding balances within twelve months, having already collected $1.9 million as of the report issuance date. However, liquidity remains dependent on timely payments from major customers.
As of March 31, 2026, CDT had three projects in backlog with a total provisional contract value of approximately $26.8 million, including the Phase VI of the Jimei Guankou Project, the Xiamen Xinglin Pipeline Network Renovation Project, and the Hubei Wuxue Project. The company is also bidding on two new wastewater treatment system projects, with results expected by the third quarter of 2026.
In a strategic shift, CDT is exploring new energy opportunities to diversify revenue streams, focusing on converting organic solid waste into renewable energy. This aligns with China's "Dual Carbon" goals and the 2030 carbon peaking target. CEO Li Yunwu emphasized that the company's cost optimization program has improved operating efficiency, and the enduring need for clean water solutions underpins long-term demand. The company's complete financial statements are available on the SEC's website at www.sec.gov and CDT's website at https://www.cdthb.cn.