Elauwit Connection, Inc. Common Stock

Second-quarter revenue was $2.9 million, down 46% year over year, and six-month revenue was $7.3 million, down 32.4% year over year. Gross profit was $0.4 million versus $0.8 million a year ago, while gross margin improved slightly to 15.5% from 15.1%. Operating loss was $3.1 million versus $0.7 million last year, net loss was $3.1 million versus $0.9 million, and adjusted EBITDA was a loss of $3 million versus a loss of $0.7 million. Cash and cash equivalents were $1.2 million, accounts receivable were $3.6 million, inventories were $2.9 million, deferred revenue was $5.3 million, and backlog was more than $38.9 million. Management said 2026 new construction is weighted to the second half and expects an uptick in both construction revenue and recurring services revenue for the rest of the year; it also expects contracted units to exceed 50,000 by year-end.

CEO Barry Rubens framed the quarter as a transition period in which Elauwit refined its sales process, focusing more on high-density markets and larger property owners. He said the company moved from a broad, experimental sales approach to a more targeted “rifle” approach, and he expects sales expense to come down in the near term while still preserving momentum. His tone was constructive and confident, emphasizing that conversion activity is increasing and should accelerate the path from contracting to revenue.

CFO James Di Bartolo highlighted the quarter’s revenue decline as timing-related, tied to periodic and variable construction and installation work. He noted gross margin improved to 15.5% from 15.1%, and said cost reduction actions are intended to push network construction gross margin back toward about 20% while recurring services margins remain in a 10%-15% range depending on mix. He also said operating expenses were $3.5 million, up from $1.5 million, but the company has identified about $1.9 million in annualized OpEx reductions going forward. The balance sheet was described as strong, with $1.2 million of cash and $38.9 million of backlog.

Analysts focused on sales ramp, the mix between new logos and portfolio conversions, construction timing, and supply chain/tariff exposure. Management said the sales team has moved from an early testing phase to a more focused approach, with sales expense expected to decline in the short term before increasing again as velocity builds. On the revenue mix, management said conversions of existing customer portfolios are increasing and speed up the path to revenue, while also noting a modest increase in NaaS activity in existing properties. On supply chain, management said it had not encountered significant disruptions from tariffs.