CSP (CSPI) Q2 2026 earnings summary

Executive summary

• Achieved revenue growth of 21.8%–22% year-over-year in Q2 FY2026, reaching $16.0 million, with product sales up 30% and service business up 6.6%–7%, driven by U.S. Technology Solutions and AZT PROTECT deployments.

• Returned to profitability with net income of $264,000 ($0.03/share), reversing a net loss of $108,000 in the prior year quarter.

• Managed cloud and service practices grew 11% year-over-year, supported by new large MSP customers and high retention rates.

• AZT PROTECT deployments doubled year-over-year, with multi-site contracts signed and over 60 unique customers across diverse verticals.

• Cash and cash equivalents were $23.1 million as of March 31, 2026.

Financial highlights

• Product revenue rose 30% to $11.1 million; service revenue increased 6.6% to $4.9 million year-over-year.

• Gross profit for Q2 was $4.5 million (gross margin 27.9%–28%, down from 32% last year); net income margin for Q2 was 1.6%.

• Six-month revenue was $28.0 million (down from $28.8 million), with gross profit of $9.2 million (32.8% margin); six-month net income was $355,000 ($0.04/share).

• Operating loss for the quarter was $0.9 million; for six months, $1.0 million.

• Operating cash flow for the six months was negative $3.4 million, compared to positive $3.7 million in the prior year.

Outlook and guidance

• Management expects continued top and bottom line growth in the second half of FY2026, with full-year growth anticipated over FY2025.

• Revenue from the Acronis OEM relationship is expected to begin by fiscal year-end.

• Management expects available cash, cash from operations, and credit facilities to be sufficient for at least 12 months.

• AZT PROTECT pipeline remains robust, with ongoing expansion opportunities in the U.S. and internationally.