0001493152-26-022724
SEC filingQ3 revenue surged 65% to $4.2M from new stock locate fees and Wilson-Davis' at-the-market agent role, but operating losses deepened to -$2.9M due to scaled variable compensation and new stock-based expenses amid elevated cash burn.
Revenue increased 65% to $4.2 million in Q3 FY2026 from $2.5 million in the prior year, primarily due to the addition of stock locate revenue and Wilson-Davis acting as a selling agent for an at-the-market offering. This growth reflects successful expansion into new revenue streams, enhancing top-line momentum in a competitive market.
Operating income deteriorated to a -$2.9 million loss from -$1.1 million last year, a -174% change, as expenses outpaced revenue gains. The increase in operating losses was primarily due to higher variable compensation tied directly to the revenue increase, along with stock-based compensation not present in Q3 FY2025. Additional pressures came from headcount growth, employee additions, and merit-based salary increases, underscoring the challenge of maintaining margins amid scaling operations.
Net income showed improvement at -$1.9 million versus -$2.9 million in the prior period (33% better), with diluted EPS advancing 99% to -$0.01 from -$1.25. This narrowing of losses stems from non-operating items offsetting the operating shortfall, providing some relief to shareholders despite core profitability pressures. Operating margin stood at -69.8%, highlighting the need for cost discipline as the business grows.
Cash used in operating activities rose sharply to -$5.0 million from -$1.1 million YoY, driven by the timing of working capital swings, higher compensation outflows, and non-cash adjustments. This elevated burn rate emphasizes ongoing liquidity management, even as revenue scales.