Xtract One Technologies Inc.

Total revenue was approximately $5.8 million in Q2 fiscal 2026 versus $3.4 million in the prior-year period, up 70%, and up 26% from Q1. Gross profit margin was 54% versus 70% a year ago. New bookings were $8.7 million versus $13.5 million a year ago. Contractual backlog and signed agreements pending installation totaled $48.8 million versus $37.2 million last year, including $13.9 million of contractual backlog and $34.9 million of signed agreements pending installation; approximately 83% of the pending-installation value was from upfront deals. Operating cash usage was $4.2 million versus $0.2 million in the prior-year quarter, and the company ended with $15.7 million in cash and cash equivalents. Management said it remains on track for record top-line results in fiscal 2026, expects revenue to continue increasing through the year, and expects margins to improve later in fiscal 2026 and beyond as Xtract One Gateway scales.

Peter Evans framed the quarter as unusually busy for bookings and deployments and said the company is in a “transformational year” with better visibility than ever into fiscal 2026. He highlighted strong demand for both Gateway products, especially in education, health care, entertainment and broader commercial markets, and pointed to rising interest outside the U.S., including the U.K. and Mexico. He was upbeat throughout, saying the business is well positioned to make fiscal 2026 the best year ever and that demand is accelerating as manufacturing capacity expands.

Karen Hersh said Q2 revenue was approximately $5.8 million, up 70% year over year, with sales also up 26% sequentially. She emphasized that gross margin was 54% versus 70% last year because of higher startup costs and production ramp expenses tied to Xtract One Gateway, while SmartGateway margins remained in the mid- to high 60s. She also noted operating costs rose modestly, with sales and marketing at $1.8 million, R&D flat at $1.6 million, and G&A at about $2 million, and said operating cash usage of $4.2 million reflected working-capital investment as production ramped; the company raised about $11.5 million gross in a bought deal and ended with $15.7 million in cash.

Analysts focused on the pace of backlog conversion, margin recovery, manufacturing constraints, and whether demand is improving enough to shorten sales cycles. Management said the One Gateway rollout is proceeding cautiously but positively, that backlog should continue converting into revenue over the next couple of quarters, and that there is not a major manufacturing bottleneck right now aside from a few longer-cycle components that have been addressed with safety stock. On margins, Karen said Xtract One Gateway is currently in the very low 50s while SmartGateway is in the higher 60s, but both executives said Q2 should be the trough margin quarter and that Gateway margins should eventually move toward the 60s. They also said the average sales cycle is roughly 4 to 5 months, though it varies widely, and that global security concerns are creating more inbound interest in some verticals.