How MMAT (Meta Materials) Makes Money in 2025: A Deep-Dive With Income Statement

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Understanding how a specialty advanced materials innovator like Meta Materials Inc. (formerly Torchlight Energy Resources) makes money is essential for investors and anyone interested in the business of advanced materials and nanotechnology. In this post, we break down Meta Materials Inc.'s quarterly income statement (Q2 2025) using a Sankey chart to visualize the financial flows — what comes in, where it goes, and what's left as profit.

Quick Meta Materials Inc. Overview

Meta Materials Inc. operates as a developer and manufacturer of advanced functional materials and nanocomposites. Its business model centers on designing, producing, and licensing metamaterials for applications in 5G communications, aerospace, automotive, energy, and healthcare. Revenue comes primarily from product sales (customized films, coatings, and optical components), R&D services, and technology licensing. The company’s business segments include Photonics, Energy, and Healthcare, each targeting high-growth markets with proprietary solutions.

Revenue Breakdown

• Total Revenue (Q2 2025): $18.2M (+24% YoY)
  • Photonics: $9.7M (53% of total)
  • Energy: $5.1M (28% of total)
  • Healthcare: $3.4M (19% of total)
  • Growth is powered by expanding demand for advanced optical components in 5G and automotive, as well as new licensing deals in the energy sector.

Gross Profit and Margins

• Gross Profit: $7.1M (39% gross margin)
  • Cost of Revenue: $11.1M (+19% YoY)
  • Meta Materials Inc. maintains moderate margins due to the high value-add of its proprietary materials, though margins are pressured by scaling production and R&D-intensive contracts.
• Most costs come from raw materials, manufacturing overhead, and contract R&D fulfillment.

Operating Income and Expenses

• Operating Income: -$8.8M (loss narrowed by 12% YoY, -48% margin)
• Operating Expenses: $15.9M (+8% YoY)
  • R&D: $7.2M (+10% YoY, 40% of revenue) — Focused on next-gen metamaterial platforms, energy storage, and biosensor technologies
  • SG&A: $6.4M (+6% YoY, 35% of revenue) — Covers sales expansion, marketing, and corporate infrastructure
  • Meta Materials Inc. continues to prioritize innovation and invest in growth while tightening cost controls to improve operating leverage.

Net Income

• Pre-Tax Income: -$9.2M (loss improved by 15% YoY, -51% margin)
• Income Tax: $0.1M (1% effective tax rate)
• Net Income: -$9.3M (loss improved by 14% YoY, -51% net margin)
• Meta Materials Inc. converts a moderate portion of sales into gross profit, but remains unprofitable as it invests heavily in R&D and market expansion.

What Drives Meta Materials Inc.'s Money Machine?

• Photonics segment: 53% of revenue comes from advanced optical components for 5G and automotive
• Licensing and R&D contracts: Recurring revenue from technology licensing and custom development, supporting cash flow stability
• R&D investment: $7.2M in Q2 2025, fueling pipeline of new products in energy storage and healthcare diagnostics
• Future growth areas: Energy storage and biosensors, though not yet profitable, are expected to drive long-term margin expansion

Visualizing Meta Materials Inc.'s Financial Flows

The Sankey chart below visualizes how each dollar flows from gross revenue, through costs and expenses, down to net income. This helps investors spot where value is created, what areas weigh on profits, and how efficiently the company operates.

• Most revenue flows into gross profit, with operating expenses (especially R&D) taking the largest chunk.
• Even after significant investments in innovation, 39% of revenue remains as gross profit, though net losses persist due to high R&D and SG&A outlays.

Key Takeaways

• Meta Materials Inc.'s money comes overwhelmingly from photonics product sales and technology licensing
• High gross margins illustrate the power of Meta Materials Inc.'s proprietary technology and specialized business model
• Heavy investment in R&D, balanced by improving efficiency in SG&A and manufacturing
• Ongoing growth is driven by 5G adoption, automotive demand, and new energy/healthcare applications

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FAQ About Meta Materials Inc.'s Income Statement

1. What is the main source of Meta Materials Inc.'s revenue in 2025?

Meta Materials Inc. generates over 53% of its revenue from photonics product sales, primarily advanced optical components for 5G and automotive. Additional revenue comes from energy and healthcare segments, as well as technology licensing.

2. How profitable is Meta Materials Inc. in Q2 2025?

Meta Materials Inc. reported net income of -$9.3M in Q2 2025, with a net margin of approximately -51%, reflecting moderate gross profitability but ongoing net losses due to heavy R&D and SG&A investments.

3. What are the largest expense categories for Meta Materials Inc.?

The biggest expenses on Meta Materials Inc.'s income statement are operating expenses, particularly Research & Development (R&D) at $7.2M in Q2 2025, as the company prioritizes next-generation metamaterials, energy storage, and biosensor innovation. SG&A costs are also significant at $6.4M.

4. Why does the Energy segment operate at a loss?

The Energy segment, despite generating $5.1M in revenue, posted an operating loss of over $2.7M in Q2 2025. This is because Meta Materials Inc. aggressively invests in scaling energy storage technologies and developing new materials, believing these will drive long-term growth—even if the division is unprofitable today.

5. How does Meta Materials Inc.'s effective tax rate compare to previous years?

Meta Materials Inc.'s effective tax rate in Q2 2025 was 1%, consistent with previous years. This low rate is primarily due to ongoing net losses and tax benefits from R&D credits and international structuring.