Breaking Down Zentek Ltd. (ZTEK) Financial Health: Key Insights for Investors

You're looking at Zentek Ltd. (ZTEK) and seeing the classic high-stakes tech story: a massive growth percentage masking a deep cash burn. The reality is, this is a micro-cap graphene play, and you need to look past the hype. While the company's Fiscal Year 2025 (FY2025) revenue jumped an astonishing 2,663.8% year-over-year, that growth only brought in a total of about $605.9k in sales, mostly from early commercialization of their ZenGUARD™ antimicrobial coating. Here's the quick math: that low revenue translated into an annual net loss of approximately $7.0M for FY2025, which is the core risk you're buying into. Honestly, with the stock trading around $0.74 in November 2025 and analysts holding an average Sell rating, you're defintely betting purely on the future of their intellectual property, not current financials.

Revenue Analysis

You need to know if Zentek Ltd. (ZTEK) is just a promising idea or a real commercial entity, and the fiscal year 2025 revenue data gives a clear, if early, answer: the company is finally moving from pure R&D to sales. The direct takeaway is that Zentek's annual revenue for the fiscal year ended March 31, 2025, saw a staggering growth, almost entirely driven by the initial commercialization of its core product.

The top-line number is dramatic. Zentek Ltd. reported annual net sales of CAD 872.50 thousand for the fiscal year ending March 31, 2025. This represents a monumental year-over-year revenue growth of 2,826.26% compared to the prior fiscal year. Honestly, that kind of percentage jump is what you see when a company starts from a very small base, which is exactly the case here. It's a massive inflection point, but it also means the dollar value is still small in absolute terms.

Here's the quick math on the growth: the prior year's revenue was tiny, so even a modest increase in product sales creates a huge percentage gain. This revenue surge is primarily tied to the successful commercialization of the ZenGUARD™ product line.

• Primary Driver: The Intellectual Property Development segment, specifically sales of the ZenGUARD™ graphene-based antimicrobial coating.
• Product Application: ZenGUARD™ is a coating used in high-demand products like surgical masks and HVAC (Heating, Ventilation, and Air Conditioning) filters.
• Secondary Stream: The Biotech segment, which includes service revenue generated through the company's aptamer technology, also contributes, but the ZenGUARD™ product is the clear growth engine.

To be fair, the company's operating segments are still very much in the early stages, but the shift to recognizing revenue from the Intellectual Property Development segment is a crucial strategic step. This segment includes the manufacturing and distribution of graphene-related products. The company's ability to secure key distribution agreements, such as the one for ZenGUARD™ Enhanced Air Filters in over 20 countries, shows a clear path to scaling this revenue stream, even as they navigate regulatory classification hurdles.

What this estimate hides is the volatility. Quarterly revenue can be lumpy, as seen with the Q3 2025 (ending September 30, 2025) net sales of just CAD 6.20 thousand, which was a significant drop from the previous quarter. This is a common pattern for early-stage commercial companies that rely on large, non-recurring initial orders or distribution milestones. Still, the full-year picture is one of defintely accelerating commercial traction. For a deeper dive into the company's overall financial health, you should check out our full report: Breaking Down Zentek Ltd. (ZTEK) Financial Health: Key Insights for Investors.

The table below summarizes Zentek Ltd.'s key fiscal 2025 revenue data:

Profitability Metrics

You're looking at Zentek Ltd. (ZTEK)'s profitability, and the numbers from the fiscal year ending March 31, 2025, are defintely a mixed bag. The direct takeaway is this: the company is successfully generating a gross profit from its products, but its massive investment in growth and research means it is still deeply unprofitable on the bottom line. This is a classic profile for an early-stage, high-tech commercialization business.

For the 2025 fiscal year, Zentek Ltd. reported revenue of approximately $0.6059 million and a net loss of $-7.22 million. The company is in a heavy investment phase, which is why your profitability ratios are so dramatically negative. The good news is that the net loss of CAD 10.04 million for FY2025 is a narrowing of losses compared to the prior year, showing a positive trend as revenue grows, which was up a staggering 2,663.8% year-over-year.

Here's the quick math on profitability: The 23.1% Gross Profit Margin tells you that the core product, like the ZenGUARD™ coating, has a decent markup over its direct costs (Cost of Goods Sold). But the Operating and Net Margins are in the negative thousands of percent. This tells the whole story: the cost of running the business-the overhead-is dwarfing the small revenue base.

Operational Efficiency and Industry Comparison

The gap between the Gross Margin (23.1%) and the Operating Margin (-1,138.8%) is your key to understanding operational efficiency. This massive difference is entirely driven by Selling, General, and Administrative (SG&A) expenses and Research & Development (R&D). In the fourth quarter of 2025 alone, the SG&A margin was an eye-watering 443.09%. This means for every dollar of sales, Zentek Ltd. spent over four dollars just on overhead and sales efforts.

To be fair, this is common for a company pioneering a new technology like graphene-based solutions. They are spending heavily to scale up, secure patents, and gain regulatory approvals. For context, compare Zentek Ltd. to established industry benchmarks:

• Zentek Ltd. Gross Margin (FY2025): 23.1%
• Manufacturing Industry Average Gross Margin (2025): 25% - 35%
• Biotechnology Industry Average Net Margin (Nov 2025): -177.1%

Zentek Ltd.'s Gross Margin is at the low end of the Manufacturing average, which is acceptable for a new product line. But the Net Margin is far worse than the average for the R&D-heavy Biotechnology sector (-1,191.5% vs. -177.1%). This isn't a sign of poor cost management, but rather a sign of a company with minimal sales volume trying to cover a large fixed cost base, including CAD 3,023,656 in salaries and benefits for FY2025. The action here is clear: they need to convert their R&D into high-volume sales, and fast. You can track this progress in detail by following the Breaking Down Zentek Ltd. (ZTEK) Financial Health: Key Insights for Investors blog series.

Debt vs. Equity Structure

Zentek Ltd. (ZTEK) is defintely not a company relying heavily on debt to fuel its growth, which is a key signal for investors in the early-stage technology and nanomaterials sector. You want to see a lean structure here, and that's what we have.

As of the most recent reporting period in 2025, Zentek Ltd.'s balance sheet shows a very low financial leverage (the use of borrowed money to finance assets). The company's total debt stands at approximately CA$1.6 million, while its total shareholder equity is significantly higher at about CA$11.7 million. This small debt load is a good sign, but it means they are highly reliant on equity raises to fund their operations and commercialization efforts.

The company's debt-to-equity (D/E) ratio, which measures how much debt a company uses to finance its assets relative to the value of its shareholders' equity (the book value), is sitting at a healthy 14.0% (or 0.14). Here's the quick math: Total Debt of CA$1.6 million divided by Total Equity of CA$11.7 million gives you that 0.14 ratio.

This ratio is substantially lower than what you see in many capital-intensive industries, and it stacks up well against comparable public companies. For instance, the average D/E ratio for the Biotechnology industry-a reasonable proxy given Zentek Ltd.'s healthcare applications-is around 0.17 (or 17%) as of late 2025. Zentek Ltd. is operating with less relative debt than the industry benchmark.

The company's financing strategy is clearly weighted toward equity, which is typical for a growth-focused firm in the commercialization phase. They've been active on the equity front, not the debt market.

• Total Debt: Approximately CA$1.6 million.
• Total Equity: Approximately CA$11.7 million.
• Debt-to-Equity Ratio: 14.0%, indicating low leverage.
• Recent Funding: Closed a non-brokered Private Placement of Units for gross proceeds of CA$2.48 million in October 2025.

What this estimate hides is the cash burn rate. While total debt is low, the company's short-term liabilities (CA$3.5 million) are not fully covered by its short-term assets (CA$2.7 million), suggesting a tight liquidity position that the recent equity raise was designed to address. This is why the October 2025 equity funding of CA$2.48 million was crucial; it directly bolsters their cash position and avoids taking on more debt to cover immediate needs. They are choosing shareholder dilution over interest payments to fund their Mission Statement, Vision, & Core Values of Zentek Ltd. (ZTEK).

The company has not reported any major debt issuances, credit ratings, or refinancing activity in 2025. Their focus is on commercializing their ZenGUARD technology and Albany Graphite project, which requires capital expenditure (CapEx) and operating expenses (OpEx) funded by equity, not leverage. Still, investors should monitor their cash runway-how long their cash reserves can fund operations-as a more critical metric than the D/E ratio right now.

Next step: Check the cash flow statement to see the expected burn rate against that new CA$2.48 million in equity. Owner: Portfolio Manager.

Liquidity and Solvency

You need to know if Zentek Ltd. (ZTEK) has enough cash on hand to cover its near-term bills, and honestly, the latest numbers show a tight spot. Their liquidity positions, as of September 30, 2025, are flashing a warning sign, with both the Current and Quick Ratios falling well below the safe 1.0 threshold.

Here's the quick math on Zentek Ltd.'s immediate financial health, based on their latest unaudited interim consolidated statements in Canadian Dollars (CAD):

• Current Ratio: The ratio is 0.79 ($2,748,104 in current assets / $3,478,963 in current liabilities). This means for every dollar of short-term debt, Zentek Ltd. has only 79 cents in assets that can be converted to cash within a year. A ratio below 1.0 is a concern.
• Quick Ratio (Acid-Test): This is even lower at approximately 0.53. This ratio strips out inventory-which isn't always easy to sell quickly-to give a truer look at immediate cash strength. It's too low.

What this estimate hides is the significant shift in their working capital (current assets minus current liabilities). As of March 31, 2025, Zentek Ltd. had positive working capital of $882,892 CAD, but by September 30, 2025, this had swung negative to -$730,859 CAD. This rapid decline in net short-term resources is defintely a trend to watch, suggesting they are using up liquid assets faster than they are replenishing them through operations.

The cash flow statements overview clarifies why the ratios are so strained. Zentek Ltd. is an early-stage company focused on intellectual property development, so it's natural to see cash outflows, but the magnitude is key. For the fiscal year ended March 31, 2025, the company used -$6.28 million CAD in cash from its operating activities alone.

Still, the company has managed to fund its operations by tapping the capital markets. The cash flow trends show a clear pattern:

• Operating Cash Flow: Consistently negative, at -$6.28 million CAD for FY 2025, reflecting the ongoing investment in research, development, and general administration.
• Investing Cash Flow: This was positive in the three months ended June 30, 2025, bringing in $2,313,694 CAD, largely due to proceeds from the sale of property. This is a one-time boost, not a sustainable source of cash.
• Financing Cash Flow: This is the lifeline. In the three months ended June 30, 2025, financing activities provided $1,628,388 CAD, primarily from issuing convertible debentures and proceeds from stock option exercises.

The potential liquidity concern is clear: Zentek Ltd. is relying on financing activities-selling stock or issuing debt-to cover its operating burn rate. The strength lies in their ability to raise capital, as demonstrated by the $2,479,227 CAD gross proceeds from a private placement announced in October 2025, but this is a temporary fix. The core business must eventually generate positive operating cash flow to be truly solvent in the long run. If you want to dig deeper into who is providing this capital, check out Exploring Zentek Ltd. (ZTEK) Investor Profile: Who's Buying and Why?

Valuation Analysis

You're looking at Zentek Ltd. (ZTEK) and trying to figure out if the market has priced it correctly. Honestly, for a pre-revenue, intellectual property (IP) focused company in the nanomaterials space, traditional valuation metrics are defintely tricky. You have to look at this through a growth lens, not a value lens.

The headline numbers for the 2025 fiscal year tell a clear story of a company in its investment and commercialization phase. Zentek Ltd. is not yet profitable, so its Price-to-Earnings (P/E) ratio is negative, sitting at approximately -11.5 on a trailing twelve-month (TTM) basis as of November 2025. This negative P/E is typical for a growth-stage company where earnings per share (EPS) is negative as they spend heavily on research, development, and scaling up production.

The Price-to-Book (P/B) ratio, which compares the stock price to the company's book value (assets minus liabilities), is quite high at around 9.51. This signals that investors are placing a significant premium on the company's intangible assets-its intellectual property, patents, and future growth potential-far beyond its current physical assets. Similarly, the Enterprise Value-to-EBITDA (EV/EBITDA) ratio is also negative, at approximately -19x for the 2025 fiscal year, reinforcing the unprofitability at the operational level.

• P/E Ratio (TTM, Nov 2025): -11.5
• P/B Ratio: 9.51
• EV/EBITDA (FY 2025): -19x

Here's the quick math on the stock trend: The stock has had a rough 12 months, with the price decreasing by about 37.71%. As of November 21, 2025, the stock closed at approximately $0.740, significantly down from its 52-week high of $1.84. This volatility is normal for a micro-cap stock with a market capitalization of around $76.884 million. You are buying a high-risk, high-reward story here, not a stable blue-chip stock.

When it comes to dividends, Zentek Ltd. is not a dividend-paying stock. The dividend yield and payout ratio are both 0.00%. Any capital the company generates is being reinvested directly back into the business to fund its IP development and commercialization efforts, which is the right move for a growth company.

What this estimate hides is the lack of formal Wall Street coverage. There are currently no analyst ratings or price targets available from major firms, meaning you have to do all the heavy lifting yourself. The technical sentiment, however, is leaning bearish as of mid-November 2025, with some models predicting a near-term price drop to around $0.7306 by December 2025. This suggests the stock is currently fighting a negative trend. You need to focus on product milestones, like the commercial success of their ZenGUARD™ technology, rather than relying on an analyst consensus that doesn't exist. For a deeper dive into who is making bets on this story, check out Exploring Zentek Ltd. (ZTEK) Investor Profile: Who's Buying and Why?

Risk Factors

You need to know that Zentek Ltd. (ZTEK) is a growth-stage company, and its near-term risks center on regulatory hurdles, cash burn, and market adoption of its core technology. The biggest immediate concern is the regulatory status of their flagship product, which directly impacts their ability to scale revenue.

Zentek Ltd. is operating in the high-growth but volatile graphene-based solutions sector, which means competition is defintely intense, and market sentiment can shift fast. The stock's share price has been volatile over the past three months compared to the US market, and the overall technical sentiment was bearish as of November 2025. Honestly, that volatility is just part of the game for a small-cap tech innovator, but it's a risk you must factor into your investment thesis.

Here is a breakdown of the key risks highlighted in their recent filings and market activity:

• Regulatory Headwinds: The classification of the ZenGUARD™ Enhanced Air Filters by Health Canada is an ongoing operational risk. In June 2025, Health Canada invited the company to submit additional information on the product's appropriate regulatory classification, which introduces uncertainty and could slow market entry or require costly re-filing.
• Financial Liquidity and Cash Burn: Despite a significant surge in revenue from the commercialization of ZenGUARD™, the company is still losing money. For the full fiscal year ended March 31, 2025, Zentek Ltd. reported a substantial net loss of CAD 10.04 million. This means they continue to burn cash to fund operations, and that pressure is real.
• Financial/Tax Indemnity Exposure: A recent Canada Revenue Agency (CRA) reassessment for the 2019 fiscal year reclassified approximately $199,000 of renounced Canadian exploration expenses (CEE). The company has disclosed a maximum aggregate indemnity exposure of $427,000 to subscribers of those flow-through financings, which is a concrete, near-term financial obligation.

What this estimate hides is the true cost of regulatory delays-it's not just the legal fees, but the lost sales opportunity. If the ZenGUARD™ filter classification is delayed, the revenue scaling they project won't happen on schedule.

Mitigation Strategies and Near-Term Actions

To be fair, Zentek Ltd. is not sitting still; they are taking clear actions to address these financial and operational risks. Their strategy is focused on aggressive commercialization and securing capital to bridge the gap to profitability.

Their primary mitigation efforts include:

• Scaling Commercialization: Management's guidance for the upcoming fiscal year focuses on scaling operations and enhancing product offerings, leveraging the ZenGUARD™ product line's successful initial commercialization. This is a classic growth-company move: grow your way out of the loss.
• Strategic Market Expansion: Zentek Ltd. executed an agency agreement with RSK Environment Ltd. in May 2025, which helps them market ZenGUARD™ Enhanced Air Filters across more than 20 countries. This broadens their sales funnel and diversifies regulatory risk away from a single market like Canada.
• Securing Capital: The company recently closed a private placement, upsized to approximately $2.5 million, to strengthen their operations and provide a necessary liquidity buffer. This shows management is actively managing the capital structure to support the burn rate.

Here's the quick math on their Q4 2025 performance: revenue surged by an astonishing 14032.3% to $813,596, and the net loss narrowed by 25.1% to $-1.84 million compared to the previous year's quarter. That massive revenue growth is the lifeline, but the loss still shows the high cost of a scaling tech business.

For a deeper dive into who is betting on this turnaround, you should read Exploring Zentek Ltd. (ZTEK) Investor Profile: Who's Buying and Why?

Your next step should be to monitor the regulatory updates from Health Canada and the company's cash position in the upcoming Q2 2026 filings (for the period ended September 30, 2025).

Growth Opportunities

You're looking at Zentek Ltd. (ZTEK) and seeing the massive year-over-year revenue jump, but you need to know if that growth is sustainable. The short answer is that the company is transitioning from a pure research and development (R&D) house to a commercialization engine, and that pivot is the single biggest driver of future value.

In the fiscal year ended March 31, 2025, Zentek Ltd. reported revenue of CAD 0.872495 million, an astounding 2,826.26% increase from the prior year. That's a huge number, but it's still small in the grand scheme. The real story is the pipeline of intellectual property (IP) finally hitting the market. To be fair, the company still posted a net loss of CAD 10.04 million for the year, which is typical for a nanotechnology firm in this stage, so cash flow management is defintely a key focus.

Product Innovations Driving Near-Term Revenue

Zentek Ltd.'s growth trajectory hinges on commercializing its patented ZenGUARD™ and new GraphGel™ technologies. These products move the company from lab-scale results to industrial sales. Here's the quick math on their core products:

• ZenGUARD™ Enhanced Air Filters: This graphene-based coating significantly enhances viral filtration efficiency for surgical masks and HVAC (heating, ventilation, and air conditioning) systems. Independent testing in June 2025 showed ZenGUARD™ filters achieved an average infectious aerosol removal efficiency of 42%, which is more than double the 16% for an untreated filter. This performance aligns with the new ASHRAE Standard 241, 'Control of Infectious Aerosols,' making it a compelling solution for schools and businesses.
• GraphGel™ Fire-Retardant: Announced in November 2025, this new graphite gel-based product is a major expansion. It has already secured ASTM Class A ratings, which is crucial for market entry, and Zentek Ltd. has an exclusive license with Altek Advanced Materials Inc. to commercialize it in the US market.

The company also continues to develop its aptamer-based platform technology, a global exclusive license with McMaster University, for diagnostic and therapeutic markets, including work on an influenza countermeasure candidate.

Strategic Market Expansion and Partnerships

The company is not just relying on the Canadian market. They are actively mapping out their global sales channels, which is a clear action for investors to track. Look at the international push:

This multi-front strategy is essential for a high-growth IP company. Plus, the company closed a non-brokered private placement in October 2025 for gross proceeds of $2,479,227, which helps fund this commercialization push. That cash infusion is a necessary bridge as they scale up manufacturing and sales.

Competitive Advantages and Near-Term Risks

Zentek Ltd.'s primary competitive advantage is its IP-driven, patented ZenGUARD™ technology, which offers a unique value proposition: superior viral filtration without sacrificing airflow or energy efficiency. Their second patent-pending technology, ZenARMOR™, focused on corrosion protection, also provides a future diversification opportunity.

What this estimate hides is the operational risk of a CEO transition and a minor tax headwind. The Board of Directors is searching for a new CEO to specifically drive the transition from R&D to commercialization, which is a good sign for strategic clarity. Still, you should note the Canada Revenue Agency (CRA) reassessment from October 2025, which exposes the company to a maximum aggregate indemnification of up to $427,000 related to a 2019 tax dispute. That's a one-time, manageable hit, not a crisis, but it reminds us that even high-tech firms deal with old-school regulatory issues.

For a deeper dive into the financials, you can check out the full analysis in Breaking Down Zentek Ltd. (ZTEK) Financial Health: Key Insights for Investors.

Your next concrete step is to monitor the Q4 2025 and Q1 2026 earnings reports for initial sales figures from the ZenGUARD™ international partnerships and the GraphGel™ US launch. Sales volume, not just R&D milestones, is the new metric.