Okay, Jake, the floor is yours.
Okay. Good afternoon, everyone. Welcome, and thank you for joining the Nanalysis Scientific Corp.'s Q3 2025 Earnings Call. I am Jake Bouma, an IR consultant for Nanalysis. Today on the line discussing Nanalysis Q3 2025 financial results and company highlights are the company's President, CEO, and Founder, Sean Krakiwsky, and CFO, Randall McRae. Following their remarks, we will open up the call for an analyst Q&A session. Before handing over the call to Sean and Randall, please note that information we present today could contain forward-looking information that is based on management's expectations, estimates, and projections. Please consider the risk factors, including those in the filings made by Nanalysis on SEDAR+, when reviewing this information. Also, all amounts discussed will be in CAD unless otherwise noted. With that, I'd like to turn the call over to Nanalysis CFO, Randall McRae.
Thanks, Jake. It's a pleasure to join and speak with everyone on the call today. First, I'll dive into the financial results for the third quarter, which ended September 30, 2025. All amounts referenced herein are CAD. Financial highlights for the three months ended September 30 include the company reported a consolidated revenue of CAD 9.3 million, a decrease of CAD 1.3 million, or 12% from the comparative period in 2024. Within the product sales segment, this decline was due to shedding of certain lines of business that we discontinued and macroeconomic uncertainty. Sales of capital equipment remained slow globally with increased pricing pressure, resulting in a decline in overall revenues. Within the security services segment, security services revenue increased by 10% year- over- year due to increased project work related to the airport security maintenance business.
Gross margin percentage for product sales for the three-month period ended September 30, 2025, was 44% versus 52% from the comparative period in 2024. This was a result of lower manufacturing utilization as the company faced supply chain challenges related to its magnets during the third quarter. These particular challenges were resolved during the fourth quarter. While gross margins for Q3 2025 were 8% lower compared to Q3 2024, gross margins for the nine-month period ended September 30, 2025, increased by 8% over the same period in the prior year due to continuous improvement programs within manufacturing. Gross margin percentage for security services for the three-month period ended September 30, 2025, was 14% versus 15% from the comparative period in 2024.
The new management team in that business has initiated improvements, including better scheduling, enhanced logistics processes, and more effective management of overtime and on-call hours, which the company expects will continue to improve margins for the remainder of the year as they've done since the first quarter. Adjusted EBITDA loss for the three months ended September 30, 2025, was CAD 2,000 versus an adjusted EBITDA profit of CAD 545,000 for the comparative period in 2024. This was primarily the result of a drop in scientific equipment sales in the quarter. Net loss was CAD 1.5 million for the three months ended September 30, 2025, which is an improvement of CAD 144,000 from the comparative period in 2024.
The decrease in net loss was due to lower depreciation as a result of the impairment of an acquired intangible asset in 2024, and the fact that losses from associate are no longer recorded in the consolidated statement of loss and comprehensive loss due to the impairment of the QUAD investment in 2024. With that, I'll turn the call over to our Founder and CEO, Sean Krakiwsky. Sean.
Thanks very much, Randall. As Randall mentioned, we had a disappointing decrease in product sales for Q3, and maybe I'd like to get into that a little bit. On the one hand, we did face significant global uncertainty regarding capital equipment sales, which we were affected by not just domestically, but also globally, as what happens in the United States tends to affect other countries like India and so on. Another factor at play here is that we have had an initiative to focus on our proprietary technologies, and so we're no longer in the business of reselling Agilent equipment and MediSo equipment. That did affect top line, but we actually expect that to have a positive influence going forward as we not only focus on our own proprietary products, but also invest resources in our marketing and sales organizations for our own proprietary products.
I also want to sort of talk about how in the past, admittedly, we've talked about restructuring our sales organization and so on. We acknowledge that this isn't the first time we've had these kind of growing pains, and we're focused in on some significant improvements there domestically and globally. I'll be talking more about that in upcoming quarters. Some of you on this call will know that in the past, it was our intention to make a particular acquisition, namely K-Prime, our channel to the market for our product, and we had some good reasons for that. Admittedly, that hasn't worked out as expected. We're sort of redoubling our efforts in that area and happy to answer specific questions on it.
With regards to our service business, we're tremendously impressed with the work that our new business head, Marc Tomlinson, has done there, executing very well. As Randall mentioned, took us from a low point of 6% gross margins, which is where we were at in Q1 of this year, back up to double digits. I am optimistic that that trend is going to continue, and you should see some fairly positive gross margin results in the fourth quarter with regards to that business. There have been some exciting other things happening in the service business, partnerships with companies like Liberty Defense, a U.S.-based company, also with LINEV Systems, which is a global company based out of the U.K. I really feel like maybe our services business unit has been underappreciated, and we're going to talk a lot more about that in the future.
Back to some operating highlights on the product side of our business. We had a pretty exciting MRI announcement that is an OEM and licensing agreement with a Siemens-affiliated company in the United States called IMRIS that makes interoperative MRI for applications such as spinal cord surgery and others. That is a real validation of how our core magnetic resonance technology applies to different areas, including MRI. As Randall alluded to, we had a bit of a supply chain challenge associated with magnets out of China, which has affected us, but proud to say that we've resolved that matter just recently and expect to have a stronger supply chain going forward because of that. We had a very exciting partnering announcement, or should I say an announcement with United States Pharmacopeia regarding a formal method publication for a certain type of compound used in the pharmaceutical industry called excipients.
These are the compounds in common pharmaceuticals that are the delivery mechanisms that allow your body to absorb the active pharmaceutical ingredients. Very proud of that announcement that we made with United States Pharmacopeia. We announced integration of our benchtop NMR libraries with a global online software company known as Wiley that has an impressive portfolio of scientific software and online databases called KnowItAll. We feel like we've achieved a lot in Q3, and we're really excited about our business going forward, both on the product side and on the services side. With that summary, I'll turn it back over to the operator and happy to answer any questions from participants on the call today.
All right. As we get set for the Q&A, I'll just ask that anyone with a question please use the raise hands feature within Zoom here. There is also an ask to unmute button. Please select that when you're ready for your question, and our team will make sure you're teed up. All right. Not seeing any questions here initially. I'll do one more last call for questions here, and if not, we'll hand it back over to Sean for final remarks.
I see lots of familiar names on the call. Yeah, if you're not interested in posing a question today, no problem. Let me know if you want to catch up in the near future, and happy to have a discussion. It looks like there's no questions. With that, I'd just like to thank everybody for participating in the call and then just thank our employees and our broader shareholders for supporting the company thus far. Thank you very much, and I hope you have a wonderful afternoon.