Wetouch Technology Inc. (NASDAQ:WETH) reported fiscal year 2025 revenue of $45.1 million, up 6.6% from $42.3 million in FY2024, and net income of $7.2 million, a 20.0% increase over the prior year’s $6.0 million. Gross profit rose to $14.4 million, but the gross margin slipped to 31.8% from 32.2% in FY2024, reflecting a modest compression in pricing power and higher raw‑material costs.
Revenue growth was driven by sustained demand in the company’s core markets—financial terminals, automotive HMI, gaming, medical devices, and industrial automation. The top five customers accounted for 81.7% of FY2025 revenue, and Mainland China represented 68.5% of total sales, underscoring a concentration risk that management highlighted as a potential vulnerability.
The narrowing gross margin is attributed to a shift toward lower‑margin GFF and GG structures, which together generated over 90% of revenue, and to increased costs of key components. While the company maintained profitability, the margin contraction signals pricing pressure and the need for continued cost discipline.
Wetouch had previously guided FY2025 revenue to $46.15 million and net income to $11.88 million in September 2025. The actual results fell short of both guidance figures, indicating that the company faced higher costs and weaker demand than anticipated, a development that investors will factor into future forecasts.
Management emphasized that the company’s cash position and stockholders’ equity improved, with cash at $103.8 million and equity at $124.6 million as of December 31, 2024. The company also noted that its Chengdu facility construction is on schedule for completion by year‑end, with mass production expected in Q2 2026, and that it has regained compliance with Nasdaq Listing Rule 5250(c)(1).
Looking ahead, Wetouch highlighted continued demand in smart cockpit and automotive display applications, gaming, industrial automation, and control interfaces. The company remains focused on deepening relationships with major customers such as Siemens and on expanding its presence in Japan, South Korea, Europe, and North America, while managing the concentration risk and margin pressures identified in the current year’s results.
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