Cloudastructure (CSAI) Q2 2026 earnings summary

Executive summary

• Annualized recurring revenue run rate reached $3.1 million at the end of Q2 2026, with total revenue for the quarter at $1.23 million, up 14% year-over-year, driven by strong growth in subscription and remote guarding services, while hardware and installation revenues declined.

• Recurring subscription revenue surged 164% year-over-year to $764,000, now comprising 62% of total revenue, up from 27% a year ago.

• Gross profit for Q2 2026 rose 53% year-over-year to $610,000, with gross margin expanding to 49% from 37% due to a shift toward higher-margin service revenue.

• Net loss narrowed to $1.7 million from $2.2 million in the prior year, reflecting improved gross profit and a non-cash gain on derivative liabilities.

• Customer retention rate remains high at approximately 99%, supporting durable revenue growth and expansion in multifamily and commercial real estate sectors.

Financial highlights

• Q2 2026 revenue was $1.23 million, up 14% year-over-year; six-month revenue reached $2.55 million, up 40%.

• Subscription revenue reached $764,000, up 164% year-over-year; hardware and installation revenue declined.

• Gross profit for Q2 2026 was $610,000, with gross margin at 49% (up from 37%); cost of goods sold decreased 9% year-over-year to $623,000.

• Operating expenses rose to $2.71 million from $2.32 million, mainly due to investments in sales, marketing, and operational capacity.

• Ended the quarter with $3.8 million in cash and $4.5 million in working capital.

Outlook and guidance

• Management expects the second half of 2026 to deliver substantially more revenue than the first half, driven by a growing pipeline, expanded sales leadership, and continued growth in recurring revenue.

• The company is positioned to capitalize on the shift to AI-powered surveillance and remote guarding, targeting a larger long-term market opportunity.

• Management expects continued operating losses and negative cash flows for the foreseeable future, but believes current cash and available financing are sufficient for at least 12 months.