Kneat.com (KSI) Q1 2026 earnings summary

Executive summary

• Revenue grew 22% year-over-year to $18.0 million in Q1 2026, with Annual Recurring Revenue (ARR) up 20% to $76.4 million, reflecting strong customer expansion and alignment with strategic goals.

• Gross profit increased 28% to $14.0 million, with gross margin improving to 78% from 74%.

• Two significant customer expansions expected in Q1 closed in early April, and multiple new contracts were signed with major biopharma and pharmaceutical manufacturers.

• Customers are increasingly adopting digital validation, with 87% still using paper-based processes and 80% reporting rising validation workloads.

• The company is evolving from document-centric to data-centric workflows, enhancing its value proposition and customer alignment.

Financial highlights

• Q1 revenue reached $18.0 million, up from $14.7 million in Q1 2025, a 22% increase year-over-year.

• ARR grew to $76.4 million, up 20% year-over-year, with FX providing a CAD 900,000 tailwind sequentially but a CAD 950,000 headwind year-over-year.

• Gross margin expanded to 78% due to improved cloud hosting economics and higher services revenue.

• Net loss of $3.9 million in Q1 2026, compared to net income of $2.1 million in Q1 2025.

• Adjusted EBITDA rose to $2.7 million from $2.3 million year-over-year.

Outlook and guidance

• Management expects incremental ARR to remain back-end loaded, consistent with historical patterns.

• Professional services revenue is expected to be higher in 2026 than in 2025, with gross margins stable at current levels.

• The company remains committed to achieving cash flow positivity for the full year 2026.

• Management expresses confidence in continued growth, citing strong sales pipeline and industry digitalization trends.

• Customer feedback and industry studies indicate sustained demand for digital validation solutions.