Pivotree (PVT) Q2 2026 earnings summary

Executive summary

• Achieved significant progress in transitioning to AI-augmented delivery, with 100% workforce AI-trained and 22% of Q2 2026 revenue from AI-enabled services.

• Built the strongest qualified sales pipeline in nearly two years, positioning for future bookings and revenue growth.

• Maintained financial stability and positive operating cash flow during the revenue transition, with the highest cash position since early 2023.

• Strategic investments included $0.6M in restructuring costs to optimize European operations and product/R&D teams.

• Launched eight new or transformed AI-enabled services year-to-date.

Financial highlights

• Total Q2 2026 revenue was $12.6M, reflecting a 10% sequential and 27% year-over-year decline due to strategic realignment and wind-down of Legacy Managed Services.

• Gross margin improved to 47.3%, up from 46.2% year-over-year, supporting sustained profitability.

• Adjusted EBITDA was $0.9M (7.2% margin), down from $1.7M (10.1%) in the prior year, excluding $0.6M restructuring charge.

• Net loss for Q2 was $0.4M, impacted by restructuring costs and absence of prior year's $2.4M non-recurring gain.

• Cash and cash equivalents at period end were $13M, the highest since Q1 2023.

Outlook and guidance

• By Q4, nearly all services are expected to be AI-enabled or AI-deliverable.

• Anticipate continued volatility in reported numbers during the ongoing transformation, but focus remains on converting pipeline to bookings and revenue.

• Managed services (MIPS) expected to stabilize with more recurring, multi-year contracts, reducing historical lumpiness.

• Management expects ongoing transition to AI-enabled services to drive future revenue mix and profitability.

• Focus remains on disciplined execution and cash preservation while scaling new capabilities.