Gorilla Technology's Q3 Reality Check: How Strong Is the Growth Story Really?

Gorilla Technology Group Inc. [GRRR] just dropped Q3 2025 earnings, and the numbers paint a mixed picture of a company firing on some cylinders while stumbling on others. Adjusted EPS landed at 24 cents—a 7.7% miss against Wall Street’s expectations and a concerning 17.2% decline from last year’s quarter. That’s the headline that stings. But before writing it off, the revenue story tells a different tale entirely.

Revenue Momentum Masks Margin Pressure

Revenue surged to $26.5 million, representing a solid 32% year-over-year climb and even slightly beating consensus by 1.8%. The company’s AI infrastructure, public safety, and enterprise solutions are clearly resonating across Asia, the Americas, Europe, and the Middle East. However, here’s where the narrative gets messy: cost of revenue exploded 57.3% to $16.6 million, a growth rate that drastically outpaced topline expansion. Operating expenses also ballooned 39% to $9.5 million, primarily from net fair value remeasurement adjustments.

The Silver Lining: EBITDA and Pipeline Strength

Despite margin compression, adjusted EBITDA managed a respectable 21% year-over-year increase to $6.8 million—suggesting the company is improving operational efficiency through better contracting and vendor alignment. More importantly, Gorilla’s pipeline has swollen to over $7 billion, built on advanced-stage AI and GPU infrastructure opportunities. This is where the real strength emerges. The Southeast Asia 5G and AI infrastructure deployment is expected to accelerate through Q4, while MENA region projects are entering their final execution phase.

Balance Sheet Strength and Cash Position

Gorilla’s fortress balance sheet provides meaningful firepower. Cash and equivalents climbed sharply to $110.2 million from just $21.7 million at 2024-year-end—a dramatic $88.5 million increase. Debt simultaneously contracted to $15.1 million from $21.4 million, improving the company’s financial flexibility substantially. Net operating cash outflow for the first nine months totaled $15.1 million, though management expects 2025 operating cash flows to turn positive.

Forward Guidance: How Strong Is the Pipeline Conversion?

How strong is Gorilla’s execution capability? The 2025 revenue guidance of $100-$110 million and 2026 projection of $137-$200 million suggest management believes it can convert that $7 billion pipeline meaningfully. Adjusted EBITDA is expected to land in the $20-$25 million range for 2025. If these targets hold, the company transitions from a high-growth, margin-pressured story into a more balanced profitability narrative. The critical question is whether deployment acceleration in key geographies can offset the margin headwinds visible in Q3.

The company holds a Zacks Rank #3 (Hold) rating, reflecting the tension between exceptional pipeline potential and near-term profitability challenges.