0001380106-26-000075
SEC filingRevenue grew 11.1% to $8.0M from higher system and consumables sales volume, but gross profit declined 8.2% to $371K due to unfavorable product mix, driving deeper net loss of $14.3M and accelerated cash burn to $15.5M FCF.
Revenue rose 11.1% to $8.0 million in Q1 FY2026 from $7.2 million a year ago, driven by higher sales volume of systems and consumables. This reflects ongoing placement of Growth Direct systems, which enable existing customers to convert more test volume at their locations, support multiple sites, meet redundancy needs, or increase capacity. However, the revenue mix shifted unfavorably, with consumables—which typically carry lower margins—growing faster than systems, contributing to gross profit declining 8.2% to $371 thousand and compressing the gross margin to 4.6%.
The deterioration in gross profit pressured overall profitability. Operating loss expanded 18.8% to -$13.9 million from -$11.7 million, as operating expenses grew faster than the top line. Net loss widened further to -$14.3 million, or -$0.31 diluted EPS, compared to -$11.3 million and -$0.26 last year. Since inception, the company has incurred operating losses, consistent with its investment in growth.
Cash utilization intensified, with net cash used in operating activities increasing to -$15.1 million from -$9.1 million. This higher burn stemmed primarily from the volume and timing of customer collections and vendor payments, compounded by elevated personnel-related costs. Capital expenditures rose modestly to $394 thousand from $319 thousand, directed toward additional systems that broaden adoption within the existing customer base. Free cash flow reached -$15.5 million as a result.
Management is addressing margin pressures through supply chain initiatives. Negotiations for a supply agreement emphasize cost-saving measures to accelerate gross margin improvement, especially for consumables. The company anticipates gross margins will rise over time as revenues from products and services scale faster than associated costs, though near-term expansion may vary due to period-specific factors like system order timing and customer site access. System placements fluctuate based on order volume, site readiness including construction, underscoring opportunities for deeper penetration in current accounts.