0001193125-26-225593
SEC filingQ1 revenue declined 15.0% to $41.1M from softer demand and slower client decision-making, but profitability turned positive with operating income of $51K versus a prior-year loss, driven by disciplined expense management.
Revenue decreased 15.0% year-over-year to $41.1 million from $48.3 million, primarily reflecting softer demand and slower client decision-making cycles for new projects in the 2026 period. This decline impacted gross profit, which fell 14.5% to $11.0 million from $12.9 million, though the gross margin held relatively steady at 26.8%. The year-over-year revenue pressure underscores ongoing caution in client spending patterns amid macroeconomic uncertainty.
Cash from operating activities used $3.2 million, slightly more than the $3.0 million use in the prior-year quarter. This reflects working capital dynamics, primarily a decrease in accrued payroll and related costs due to the timing of annual bonus payments, as well as an increase in accounts receivable. Capital expenditures declined to $66 thousand from $114 thousand, resulting in free cash flow of -$3.2 million. Management notes that cash balances, operating activities, and credit facility availability remain adequate to fund business needs and the February 2026 share repurchase program over the next twelve months, absent acquisitions.