CSPI · CSP Inc.

CSP Inc. delivered strong Q2 FY2026 results with revenue surging 21.8% to $16.0 million, primarily propelled by a 30% increase in product revenue to $11.1 million from key customer order fulfillment in the U.S. Technology Solutions business. Service revenue also grew 6.6% to $4.9 million, supported by high customer retention and best-in-class service, contributing to elevated gross margins in that segment. Despite the revenue mix shift toward lower-margin products, gross profit rose slightly to $4.5 million, though the overall gross margin compressed to 27.9% from 32% a year ago. Operating loss narrowed to $851 thousand from $994 thousand, aided by other income, leading to net income of $264 thousand or $0.03 per share after a $568 thousand tax benefit, a turnaround from the prior year's $108 thousand loss. Management highlighted momentum in AZT PROTECT cybersecurity deployments, including a new multi-site engagement with a global cement manufacturer and doubled new site customers year-over-year, positioning it for growing contributions alongside cloud and managed services growth. CEO Victor Dellovo noted solid trends carrying into Q3, expressing belief in full-year growth over FY2025 and second-half acceleration. The balance sheet remains robust with $23.1 million in cash despite customer financing, funding expansion in managed services and AZT PROTECT. A $0.03 per share dividend underscores confidence in cash generation. Six-month results showed stable revenue at $28.0 million with improved gross margins at 32.8%, and consistent net income of $0.04 per share.