CDT Environmental Technology Investment Holdings Limited (Nasdaq: CDTG) announced on May 15, 2026, the filing of its annual report on Form 20-F for the fiscal year ended December 31, 2025, with the U.S. Securities and Exchange Commission. The report reveals total revenues of $18.2 million, a decrease of approximately $11.5 million or 38.8% compared to the prior year. The decline was primarily driven by a 39.2% drop in revenues from sewage treatment system installations, which fell to $17.3 million, and a 29.8% decrease in sewage treatment services revenues to $0.9 million. The company attributed these reductions to delays in projects initiated between 2021 and 2024, prolonged local government review processes, a decrease in new projects secured in 2025, and reduced demand amid the ongoing economic downturn in the People's Republic of China.
Gross profit for the year decreased by 32.8% to $7.6 million, though gross profit margin improved to 41.5% from 37.8% in 2024, reflecting a higher proportion of profitable projects completed during the year. Total operating expenses surged 107.7% to $19.2 million, driven by a $1.7 million increase in stock-based compensation and a $14.7 million provision for credit losses, compared to a net recovery of $6.5 million in 2024. The company noted that the higher provision was in response to increased credit risk and collectability concerns, particularly from state-owned customers backed by local governments. As a result, CDT reported a net loss of $10.3 million for 2025, contrasting with net income of $1.4 million in the prior year.
Despite the challenging year, CDT highlighted progress in its restructuring activities, which have streamlined operations and improved efficiency. As of December 31, 2025, working capital stood at approximately $26.4 million, slightly up from $26.0 million. Looking ahead, the company had three projects in backlog as of March 31, 2026, with a total provisional contract value of approximately $26.8 million: Phase VI of the Jimei Guankou Project ($4.3 million), the Xiamen Xinglin Pipeline Network Renovation Project ($12.5 million), and the Hubei Wuxue Project ($10 million). Additionally, CDT is bidding on two new wastewater treatment system projects, with results expected by the third quarter of 2026.
In a strategic move to diversify revenue streams, CDT is exploring new energy opportunities, including converting organic solid waste into renewable energy. The company is in discussions with potential industry partners to commercialize innovative energy solutions aligned with China's "Dual Carbon" goals. CEO Li Yunwu emphasized that the enduring need for clean water will continue to underpin demand, and the company expects improvement in core sales growth and stable margins through 2026, supported by its backlog and bidding pipeline. The annual report on Form 20-F can be accessed through the SEC's website at www.sec.gov or CDT's website at https://www.cdthb.cn.
