CSP (CSPI) Q3 2026 earnings summary

Executive summary

• Q3 2026 revenue was $14.4 million, down from $15.4 million in Q3 2025, with gross margin improving to 30.1% from 28.8% year-over-year.

• Net loss for Q3 was $846,000 ($0.09/share), compared to a net loss of $264,000 ($0.03/share) in Q3 2025; operating loss widened to $1.5 million.

• For the nine months ended June 30, 2026, revenue was $42.4 million (vs. $44.3 million prior year), with a net loss of $491,000 (vs. net income of $100,000 prior year).

• Technology Solutions and managed services showed growth in cloud and recurring revenue, while AZT PROTECT achieved a 100% renewal rate and expanded its customer base.

• Backlog in Technology Solutions increased 65% year-over-year due to delayed hardware deliveries, with several large AZT PROTECT deals nearing completion.

Financial highlights

• Product revenue was $9.9 million (vs. $10.2 million prior year); service revenue was $4.5 million (vs. $5.3 million prior year).

• Gross profit was $4.3 million, down from $4.5 million, but gross margin improved to 30.1% from 28.8% year-over-year.

• Cash and cash equivalents at quarter-end: $24.7 million.

• Receivables financed and cash together total approximately $40 million.

• Net cash used in operations was $3.0 million for the nine months, compared to $0.4 million provided in the prior year.

Outlook and guidance

• Management expects continued growth in managed services and AZT PROTECT, with several large opportunities potentially converting in the next six months.

• Hardware supply chain delays are expected to persist for at least another year, impacting revenue recognition.

• Enhanced sales organization, OEM integrations, and new multi-year cloud contracts are expected to accelerate expansion and recurring revenue.

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