MultiSensor AI Holdings, Inc.
For the period ended Jun 30, 2025. Filed Aug 13, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 13, 2025
MSAI$3.08+0.9%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-13.
0001558370-25-007573
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-13.
0001558370-25-011382
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 62 previous paragraphs and 70 current paragraphs.
38 unchanged; 16 reworded; 13 added; 6 removed; 2 previous and 3 current paragraphs rearranged.
Tables are not compared: 4 previous and 6 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
In the Distribution and Logistics market, we believe our solutions, through enhanced predictive maintenance, provide value by minimizing unplanned downtime to reduce labor and maintenance costs and increase throughput. During the quarter, subscription renewals for our global distributor launch customer commenced in June 2025 and cash was received for the subscriptions up-front for the 12-month subscription term. We have also expanded our applications with the global distributor customer during the quarter, launching pilot programs to monitor rooftop solar installations and critical power within a facility. As the global distributor’s operations become more automated, we have offered solutions to utilize continuous monitoring to multiply the impact of reliability and maintenance engineers, culminating in the launch of a pilot program in the global distributor’s last mile facilities, which are more numerous but more thinly staffed compared to the global distributor’s other facilities. During the quarter, we have also continued to refine our solutions and associated hardware with the global distributor to maximize the ROI realized, including utilizing less costly sensors with narrower field-of-view, where the application allows. Overall, we believe the relationship with our global distributor launch customer remains healthy and we made significant strides during the quarter to broaden the relationship and demonstrate the value of our solutions across a variety of applications. Our learnings from this launch customer are serving as a roadmap for additional customers in the Distribution and Logistics market.
Current report
In the Manufacturing market, our go-to market strategy centers on our early fire detection solution. During the quarter, we completed our first pilot implementation at a second Big-3 automaker to monitor lithium-ion battery packs for thermal runaway. We also partnered with our first Big-3 automaker to launch a pilot of dual-vision hardware sensors (both visual and infrared sensors) with the goal to further reduce false alarms from our early fire detection solution.
Current report
During the quarter, we added data centers to our target applications leveraging our existing solutions. Previous pilots completed in this space have demonstrated the value of our solutions in cooling management and server load-balancing. We plan to target this industry heavily in the second half of 2025.
Current report
Regarding sensor hardware, we continue to de-prioritize stand-alone hardware sales, as we transition the Company away from a legacy in-house branded hardware provider to a manufacture-agnostic solutions partner.
Current report
Strategic Cost Optimization Initiatives
Current report
We have executed strategic cost optimization initiatives to align our expense base with current operations to enhance long-term profitability, preserve agility, and position MSAI for scalable and efficient growth. These initiatives include a reduction in employee headcount and professional fees, a consolidation of real estate, employee benefits realignment and vendor renegotiations.
Current report
*Cost of Goods Sold:*Cost of goods sold for the three months ended June 30, 2025 was $1.1 million, compared to $0.5 million for the three months ended June 30, 2024. The increase in the cost of goods sold was primarily attributable to a shift in product-mix along with the wholesale clearance of certain legacy hand-held sensors during the three months ended June 30, 2025, resulting in a net loss of $0.2 million on the transactions.
Current report
Other expense (income), net: Other expense (income), net for the three months ended June 30, 2025 was $0.0 million as compared to $1.0 million for the three months ended June 30, 2024. The decrease was primarily associated with the Company’s ELOC. During the three months ended June 30, 2024, the Company incurred a fee to enter into the ELOC arrangement of $0.5 million along with a make-whole obligation which was subsequently remeasured based on the stock price as of June 30, 2024, incurring a $0.2 million loss.
Current report
Six months ended June 30, 2025 compared to six months ended June 30, 2024
Current report
*Revenue:*Revenue for the six months ended June 30, 2025 was $2.6 million, compared to $4.4 million for the six months ended June 30, 2024. The decrease in revenue is primarily attributable to reduced stand-alone hardware sales, in line with our strategic initiative of transitioning away from a hardware provider to a solutions provider. Software revenue grew 32% to $0.7 million as the Company continues to focus on growing our SaaS business. Revenue streams from each of our products and services are summarized below for the six months ended June 30, 2025 and 2024.
Current report
*Share-Based Compensation Expense:*Share-based compensation expense for the six months ended June 30, 2025 was $1.3 million, compared to $3.3 million for the six months ended June 30, 2024. The decrease in share-based compensation expense was primarily related to 1,382,909 vested restricted stock units granted during the six months ended June 30, 2024 to certain employees upon the effectiveness of the Form S-8 related to the Business Combination.
Current report
Other expense (income), net: Other expense (income), net for the six months ended June 30, 2025 was ($0.2) million as compared to $1.0 million for the six months ended June 30, 2024. The change is primarily associated with the Company’s ELOC. During the six months ended June 30, 2025, the Company was notified by B.Riley that the ELOC make-whole obligation was resolved resulting in a gain of $0.2 million. During the six months ended June 30, 2024, the Company incurred a fee to enter into the ELOC arrangement of $0.5 million along with a make-whole obligation which was remeasured resulting in a $0.2 million loss based on the stock price as of June 30, 2024.
Current report
Six months ended June 30, 2025, compared to six months ended June 30, 2024
Removed paragraphs (6)
Previous report
In the Distribution and Logistics market, we believe our solutions, through enhanced predictive maintenance, provide value by minimizing unplanned downtime and reducing process waste. Our largest customer in the Distribution and Logistics market has achieved a greater than four times return on investment as of March 31, 2025 and a payback period of less than one year. We believe these results were a catalyst driving their subscription renewals, approximating $2.1 million, which unless canceled, are expected to be recognized over the twelve-month subscription period commencing in June 2025. Payment for the subscription renewals is expected to be received upfront in the second quarter of 2025 for the one-year subscription term.
Previous report
In the Manufacturing market, our go-to market strategy centers on our early fire detection solution. A leading automaker and pilot customer has renewed its subscriptions, and another leading automaker has issued orders to pilot our early fire detection solution for electric vehicle batteries. Our insights from our early fire detection pilot program for electric vehicle batteries have facilitated the launch of additional early fire detection pilots with other leading manufacturers in the metals and mining, food and beverage, pulp and paper, and waste and recycling industries.
Previous report
Recent Developments
Previous report
On March 28, 2025, the Company entered into an at market issuance sales agreement with B. Riley Securities, Inc., as sales agent or principal, pursuant to which the Company may offer and sell shares of the Company’s common stock, par value $0.0001 per share having an aggregate market value of up to $8.625 million from time to time through B. Riley Securities.
Previous report
Depreciation: The increase in depreciation expense was mostly flat in March 31, 2025 compared to March 31, 2024. The slight increase in depreciation expense was primarily due to additions to property, plant, and equipment (primarily software), offset by lower depreciation expense from machinery, equipment, and demo due to disposals and sales which occurred during fiscal year 2024.
Previous report
Other Income, net: There was no recorded Other income, net for the three months ended March 31, 2024 as compared to $0.2 million for the three months ended March 31, 2025. Other income, net increased due to the notification by B.Riley on January 8, 2025 that the ELOC make-whole obligation was resolved.
Reworded paragraphs (16)
Previous wording
The Company and its wholly owned subsidiaries provide turn-key predictive maintenance and process control solutions, which combine cutting edge imaging and sensing technologies with AI-powered enterprise software. Our software leverages a continuous stream of data from thermal imaging, visible imaging, acoustic imaging, vibration sensing, and laser sensing devices to provide comprehensive, real-time condition monitoring for a customer’s critical assets, processes, and manufactured outputs. Our cloud and edge solutions are deployed by organizations to protect critical assets across a wide range of industries. In tandem with these solutions, we provide various services for our customers including training, calibration, and repair.
Current wording
The Company and its wholly owned subsidiaries provide turn-key predictive maintenance and process control solutions, which combine cutting edge imaging and sensing technologies with AI-powered enterprise software. Our software leverages a continuous stream of data from thermal imaging, visible imaging, acoustic imaging, vibration sensing, and laser sensing devices to provide comprehensive, real-time condition monitoring for a customer’s critical assets, processes, and manufactured outputs. Our cloud and edge solutions are deployed by organizations to protect critical assets across a wide range of industries.
Previous wording
We are focused on growing our position as a Software as a Service (SaaS) leader in predictive maintenance. As of March 31, 2025, the Company has approximately 550 active sensors connected to our MSAI Connect platform as compared to approximately 460 as of December 31, 2024, and 90 as of March 31, 2024. This represents a 19% increase quarter over quarter and a greater than 500% increase year over year. We anticipate significant opportunities to drive increased recurring revenues with our solutions.
Current wording
We are focused on growing our position as a Software as a Service (SaaS) leader in predictive maintenance. As of June 30, 2025, the Company has approximately 610 active sensors connected to our MSAI Connect platform as compared to approximately 550 as of March 31, 2025, and 109 as of June 30, 2024. This represents an 11% increase quarter over quarter and a 460% increase year over year. We anticipate significant opportunities to drive increased recurring revenues with our solutions.
Previous wording
Revenue: Revenue for the three months ended March 31, 2025 was $1.2 million, compared to $2.3 million for the three months ended March 31, 2024. The decrease in revenue was primarily attributable to a decrease in the quantity of sensor hardware sold. During the three months ended March 31, 2024, the Company sold approximately 450 thermal sensors to one of the Company’s launch customers. Software and Services revenue grew 26% and 213% to $0.2 million and $0.2 million, respectively as the Company continues to focus on growing our SaaS and related services businesses. Revenue streams from each of our products and services are summarized below for the three months ended March 31, 2025 and 2024.
Current wording
Revenue: Revenue for the three months ended June 30, 2025 was $1.4 million, compared to $2.1 million for the three months ended June 30, 2024. The decrease in revenue is primarily attributable to reduced stand-alone hardware sales, in line with our strategic initiative of transitioning away from a hardware provider to a solutions provider. Software revenue grew 37% to $0.4 million as we continued to focus on growing our SaaS business. Revenue streams from each of our products and services are summarized below for the three months ended June 30, 2025 and 2024.
Previous wording
*Share-Based Compensation Expense:Share-based compensation expense for the three months ended March 31, 2025 was $1.0 million, compared to no recorded share-based compensation expense for the three months ended March 31, 2024. *The increase in share-based compensation was attributable to the granting of restricted stock units to our employees during the three months ended March 31, 2025.
Current wording
*Share-Based Compensation Expense:*Share-based compensation expense for the three months ended June 30, 2025 was $0.4 million, compared to $3.3 million for the three months ended June 30, 2024. The decrease in share-based compensation expense is primarily related to 1,382,909 vested restricted stock units granted during the three months ended June 30, 2024 to certain employees upon the effectiveness of the Form S-8 related to the Business Combination.
Previous wording
*Cost of Goods Sold:*Cost of goods sold for the three months ended March 31, 2025 was $0.5 million, compared to $1.2 million for the three months ended March 31, 2024. The decrease in cost of goods sold was attributable to a decrease in the quantity of sensor hardware sold as well as a change in product mix.
Current wording
*Cost of Goods Sold:*Cost of goods sold for the six months ended June 30, 2025 was $1.5 million, compared to $1.7 million for the six months ended June 30, 2024. The decrease in cost of goods sold was attributable to a decrease in the quantity of sensor hardware sold as well as a change in product mix.
Previous wording
Inventory Impairment: The decrease in inventory impairment was due to no impairment recognized during the three months ended March 31, 2025.
Current wording
Inventory Impairment: The decrease in inventory impairment was due to no impairment recognized during the six months ended June 30, 2025.
Previous wording
Selling, General and Administrative Expense: Selling, general and administrative expense for the three months ended March 31, 2025 was $4.1 million, compared to $3.2 million for the three months ended March 31, 2024. The increase in selling, general and administrative expenses was primarily related to increased payroll expenses of $0.7 million, increased professional fees of $0.6 million incurred primarily to facilitate the Company’s shelf registration statement in January 2025 and Sales Agreement in March 2025, which was offset by a reduction of $0.4 million in Other selling, general, and administrative expenses.
Current wording
Selling, General and Administrative Expense: Selling, general and administrative expense for the six months ended June 30, 2025 was $7.0 million, compared to $6.0 million for the six months ended June 30, 2024. The increase in selling, general and administrative expenses was primarily related to increased payroll expenses of $1.2 million and increased professional fees of $0.1 million, which were partially offset by a reduction of $0.3 million in other selling, general, and administrative expenses.
Previous wording
*Change in fair value of convertible notes:*There was no recorded loss (gain) in fair value of convertible notes for the three months ended March 31, 2025. The decrease in loss (gain) in fair value of convertible notes was the result of these notes being converted in fiscal year 2024.
Current wording
*Change in fair value of convertible notes:*There was no recorded loss (gain) in fair value of convertible notes for the six months ended June 30, 2025. The decrease in loss (gain) in fair value of convertible notes was the result of these notes being converted in fiscal year 2024.
Previous wording
We believe EBITDA and Adjusted EBITDA are useful performance measures because they facilitate comparison of our results of operations from period to period without regard to our financing methods or capital structure or other items that impact comparability of financial results from period to period such as fluctuations in interest expense or effective tax rates, levels of depreciation, non-cash charges such as share based compensation expenses or unusual items that are not considered an indicator of ongoing performance of our operations. EBITDA and Adjusted EBITDA should not be considered as alternatives to, or more meaningful than, net income or any other measure as determined in accordance with GAAP. Our computations of EBITDA and Adjusted EBITDA may not be comparable
Current wording
We believe EBITDA and Adjusted EBITDA are useful performance measures because they facilitate comparison of our results of operations from period to period without regard to our financing methods or capital structure or other items that impact comparability of financial results from period to period such as fluctuations in interest expense or effective tax rates, levels of depreciation, non-cash charges such as share based compensation expenses or unusual items that are not considered an indicator of ongoing performance of our operations. EBITDA and Adjusted EBITDA should not be considered as alternatives to, or more meaningful than, net income (loss) or any other measure as determined in accordance with GAAP. Our computations of EBITDA and Adjusted EBITDA may not be comparable to EBITDA or Adjusted EBITDA of other companies. We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business.
Previous wording
We incurred losses for the three months ended March 31, 2025, due to negative net working capital excluding deferred transaction costs and other current assets that are not settled in cash, and investment in technology innovation and commercial capabilities. We have historically funded our operations with internally generated cash flows, equity financings, lines of credit with banks, convertible notes, and promissory notes with shareholders and related parties.
Current wording
We incurred losses for the three and six months ended June 30, 2025. We have historically funded our operations with internally generated cash flows, equity financings, lines of credit, debt, convertible notes, and promissory notes with shareholders and related parties.
Previous wording
On April 16, 2024, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B. Riley Principal Capital II, LLC (“B Riley”). Pursuant to the Purchase Agreement, we have the right, but not the obligation, to sell to B. Riley up to $25.0 million worth of Common Stock over the term of the Purchase Agreement, beginning only after certain conditions set forth in the Purchase Agreement have been satisfied, including that an amendment to the registration statement registering the Purchase Shares for resale shall have been declared effective under the Securities Act of 1933, as amended. During the three months March 31, 2025, the Company utilized the B. Riley Committed Equity Facility to sell 1,791,732 shares of Common Stock for cash proceeds totaling $4.7 million.
Current wording
On April 16, 2024, we entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with B. Riley Principal Capital II, LLC (“B Riley”). Pursuant to the Purchase Agreement, we have the right, but not the obligation, to sell to B. Riley up to $25.0 million worth of Common Stock over the term of the Purchase Agreement, beginning only after certain conditions set forth in the Purchase Agreement have been satisfied, including that an amendment to the registration statement registering the Purchase Shares for resale shall have been declared effective under the Securities Act of 1933, as amended. During the three months ended June 30, 2025 and 2024, the Company utilized the B. Riley Committed Equity Facility to sell a total of 0 and 23,999 shares of Common Stock for cash proceeds totaling $0 and $58 thousand, respectively. During the six months ended June 30, 2025 and 2024, the Company utilized the B. Riley Committed Equity Facility to sell a total of 1,791,732 and 23,999 shares of Common Stock for cash proceeds totaling $4.7 million and $58 thousand respectively.
Previous wording
On March 28, 2025, we entered into the Sales Agreement with B. Riley Securities providing for the sale of up to $8.6 million as set forth in the Sales Agreement. B. Riley Securities will be entitled to compensation at a fixed commission rate of the gross sales price of the shares of Common Stock sold pursuant to the Sales Agreement. During the three months ended March 31, 2025, we sold no shares under the Sales Agreement.
Current wording
On March 28, 2025, we entered into the Sales Agreement with B. Riley Securities providing for the sale of up to $8.6 million as set forth in the Sales Agreement. B. Riley Securities is entitled to compensation at a fixed commission rate of the gross sales price of the shares of Common Stock sold pursuant to the Sales Agreement. During the three and six months ended June 30, 2025, we sold 109,389 shares under the Sales Agreement for cash proceeds totaling $82 thousand.
Previous wording
Net cash used in operating activities was $3.2 million for the three months ended March 31, 2025, an increase of $3.7 million as compared to $0.5 million of net cash provided by operating activities for the three months ended March 31, 2024. The increase in net cash used in operating activities was primarily related to decreased customer receipts during the three months ended March 31, 2025.
Current wording
Net cash used in operating activities was $4.0 million for the six months ended June 30, 2025, an increase of $4.2 million as compared to $0.2 million of net cash provided by operating activities for the six months ended June 30, 2024. The increase in net cash used in operating activities was primarily related to timing of payments for outstanding liabilities and changes in the timing of collections from customers.
Previous wording
Net cash used in investing activities was $0.4 million for the three months ended March 31, 2025, a decrease of $0.2 million as compared to $0.6 million of net cash used in investing activities for the three months ended March 31, 2024. The decrease is primarily related to a decrease in cash paid for capital expenditures.
Current wording
Net cash used in investing activities was $0.9 million for the six months ended June 30, 2025, a decrease of $0.2 million as compared to $1.1 million of net cash used in investing activities for the six months ended June 30, 2024. The decrease is primarily related to a decrease in cash paid for capital expenditures.
Previous wording
Net cash provided by financing activities was $4.0 million for the three months ended March 31, 2025, an increase of $4.6 million as compared to $0.6 million of net cash used in financing activities for the three months ended March 31, 2024. The increase in net cash provided by financing activities is primarily attributable to $4.7 million in proceeds from stock sales during the three months ended March 31, 2025.
Current wording
Net cash provided by financing activities was $3.7 million for the six months ended June 30, 2025, an increase of $3.7 million as compared to $0.0 million of net cash provided by financing activities for the three months ended June 30, 2024. The increase in net cash provided by financing activities is primarily attributable to $4.8 million in proceeds from stock sales during the six months ended June 30, 2025, offset by $0.8 million of tax payments associated with share-based compensation transactions.
Previous wording
Our principal commitments consist of lease obligations for our corporate office and production facility. The net present value of operating lease liabilities as of March 31, 2025 is $0.1 million. The net present value of operating lease liabilities for the year ended December 31, 2024 is $0.1 million.
Current wording
Our principal commitments consist of lease obligations for our corporate office and production facility. The net present value of operating lease liabilities as of June 30, 2025 is $0.1 million. The net present value of operating lease liabilities as of December 31, 2024 is $0.1 million.
Rearranged current paragraphs (3)
Current report — wording carried from elsewhere
Selling, General and Administrative Expense: Selling, general and administrative expense for the three months ended June 30, 2025 was $2.9 million, compared to $2.8 million for the three months ended June 30, 2024. The increase in selling, general and administrative expenses was primarily related to an increase of $0.5 million of payroll expense, partially offset by a decrease in professional fees of $0.5 million.
Current report — wording carried from elsewhere
The following table presents summary results of operations for the periods indicated in thousands:
Current report — wording carried from elsewhere
Loss on financing transaction: There was no recorded loss on financing transaction for the six months ended June 30, 2025. The decrease in loss on financing transaction was the result of the Financing Notes being converted to equity in fiscal year 2024.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
to EBITDA or Adjusted EBITDA of other companies. We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business.
Previous report — wording carried elsewhere
Three months ended March 31, 2025, Compared to Three months ended March 31, 2024