Tantalus Systems Holding Inc.

Revenue was $15.4 million in Q2, up 18% year over year. Connected Devices revenue was $10.4 million and Software and Services revenue was $5 million. Gross profit margin was approximately 55%, recurring revenue was approximately $3.6 million, and ARR reached $15 million, up 13% year over year. Adjusted EBITDA was $690 thousand, up 35% from $510 thousand last year, while net loss was $1 million versus a loss of $903 thousand a year ago. For the first half, revenue was $30 million, and trailing 12-month revenue was approximately $60 million, up more than 21% year over year; trailing 12-month adjusted EBITDA was approximately $4 million with a 6.7% margin. Guidance was qualitative rather than numeric: management expects second-half operating expense to normalize outside of one-time restructuring costs, expects most of the inventory built in Q2 to convert to revenue in the second half of 2026, and said it expects all 8 active contracting opportunities to convert before year-end.

Peter Londa framed the quarter as evidence that Tantalus’ model is working, emphasizing record revenue, strong gross margin, positive adjusted EBITDA, and the strongest balance sheet in company history. He highlighted broadening adoption of TruSense, expansion into Canada, and new software offerings such as TruGrid Verify and TruGrid Advantage as signs that the company is moving toward more recurring, higher-margin revenue. His tone was confident and upbeat, but he also stressed that utility customers remain deliberate and that the sales cycle can be long.

Azim Lalani focused on the quality of revenue, margins, cash, and capital structure. He said 89% of Q2 revenue and 87% of first-half revenue came from existing customers, recurring revenue was about $3.6 million, and software and services gross margin was approximately 78%. He explained that operating cash flow was negative $5.7 million in the quarter because of working capital timing, including about $2 million of inventory buildup and about $2.6 million tied to deferred revenue seasonality, but noted trailing 12-month operating cash flow was about $1.1 million and free cash flow was positive. He also described the refinancing with Fifth Third Bank, which increased the revolver to $12 million, added a $3.5 million term loan, lowered the average term-loan rate from 11.75% to under 6%, cut annualized cash interest by about $200 thousand, and brought liquidity to about $41.3 million.

Analysts pressed on whether macro volatility, inflation, and rising vendor prices were delaying utility buying decisions; management said utilities are being more deliberate, not pausing, and that Tantalus sees this as a natural hedge because customers are increasingly focused on extending the life of existing infrastructure. Questions on TruSense adoption focused on the 37 utilities beyond pilot, and management said the use cases are broadening across AMI enhancements, power-quality visibility, and behind-the-meter load management, with order visibility into 2027 and a possible volume inflection already near current monthly levels. Analysts also asked about OpEx and R&D, and management said the Q2 increase reflected new Canada-focused hiring, pipeline support, and one-time restructuring in R&D, while new analytics and managed-service offerings were developed from customer feedback and are expected to pull through with TruSense deployments.