CSP Inc.

For fiscal Q3 ended June 30, 2026, revenue was $14.4 million versus $15.4 million a year ago. Product revenue was $9.9 million versus $10.2 million, and service revenue was $4.45 million versus $5.3 million. Gross profit was $4.3 million versus $5.45 million, and gross margin improved to 30.1% from 28.8%. Product gross margin rose to 20.7% from 15.7%, while service gross margin was 51.2% versus 53.9%. Net loss was $846 thousand, or $0.09 per share, versus a net loss of $264 thousand, or $0.03 per share, in the prior-year quarter. For the first nine months of fiscal 2026, revenue was $42.4 million versus $44.3 million, gross profit was $13.5 million, or 31.9% of sales, and net loss was $491 thousand, or $0.05 per share. Cash and cash equivalents were $24.7 million at June 30, 2026. Management did not give formal next-quarter or full-year guidance, but said it expects continued progress in service growth and AZT Protect, with several large 6-figure opportunities nearing the end of an 18 to 24 month sales cycle, and a fall launch for Acronis-related materials/SKUs once integration is complete.

Victor Dellovo said the quarter was near expectations operationally, but results were held back by long hardware delivery times and the continued ramp of AZT Protect. He emphasized that the company is making progress in enterprise land-and-expand selling, OEM embedding, and direct sales to Fortune 500 customers, and said the new sales organization should help shorten cycles and broaden the funnel. His tone was constructive but realistic, repeatedly stressing that large OT and OEM deals move slowly and that much of the timing is outside CSPi’s control.

Gary Levine said third-quarter revenue was $14.4 million, gross profit was $4.3 million, and gross margin was 30.1%, with product margin at 20.7% and service margin at 51.2%. He noted operating loss was $1.5 million and net loss was $846 thousand, or $0.09 per share, and highlighted that R&D rose 5% to $832 thousand and SG&A rose 3% to $5 million. He also said other income increased 58.7%, cash was $24.7 million, over 20 transactions had extended terms, roughly 30% to 40% of receivables were longer term with $8.3 million over a year, the company bought back about 13 thousand shares, and the board approved a 3-cent dividend payable September 15, 2026.

Analysts focused on three main issues: how soon OEM integrations like Acronis will turn into revenue, how long the sales cycle is for AZT Protect, and whether the vendor-delay problem will ease. Management said Acronis and other OEMs are still working through integration and SKU readiness, with a fall launch expected for Acronis, but revenue impact is still unclear. On sales cycles, Victor said large enterprise and OT deals can take 12 to 24 months because of testing, lab work, politics, and budget-holder approvals, and on supply, he said delays are being driven by AI-related demand for memory, hard drives, and processors and could last at least a year.