SideChannel, Inc. (OTCQB:SDCH), a provider of cybersecurity services, announced its financial performance for the third quarter of the fiscal year ending September 30, 2026. The company recorded a revenue of $1.8 million, marking a slight increase of $21 thousand or 1.2% compared to the same quarter the previous year.
#Financial Overview
Despite the minor increase in revenue, SideChannel's net loss for the third quarter stood at $134 thousand, significantly improved from a net loss of $261 thousand during the same period in FY 2025. Gross margin improved to 54.9%, a rise of 790 basis points from the previous year's 47.0%.
Operating expenses saw a modest increase of $18 thousand, or 1.6%, compared to the third quarter of FY 2025. The company experienced a trailing twelve-month revenue retention rate of 68.2%, up from 63.6% reported in September 2025. However, its financial standing remains a concern, with cash reserves declining by $839 thousand, ending at $326 thousand as of June 30, 2026.
#Year-to-Date Results
For the nine-month period ending June 30, 2026, SideChannel reported total revenues of $5.1 million, reflecting a decrease of $431 thousand or 7.7% from the prior fiscal year. Though the gross margin for this period was higher at 53.2%, this represents a significant increase from 47.5% in FY 2025. A net loss of $974 thousand—or $0.22 per share—was reported for the year to date, in comparison to a net loss of $510 thousand—or $0.12 per share—during the same timeframe last year.
#Management Insights
Brian Haugli, President and CEO of SideChannel, commented on the quarterly results, highlighting the revenue growth and the effective management of operating expenses. He noted advancements in the company’s cybersecurity platform and the integration of AI capabilities to enhance client services and operational efficiency. Haugli emphasized that these developments assist SideChannel in streamlining workflows for its virtual Chief Information Security Officers (vCISOs).
#Future Outlook
The ongoing financial challenges, including the need for additional funding and the impact of net losses, raise questions about SideChannel's long-term sustainability. As the company continues to innovate and refine its cybersecurity offerings, it must address these financial uncertainties to maintain investor confidence.
#Key Takeaways
- SideChannel reported Q3 FY 2026 revenue of $1.8 million, a 1.2% increase year-over-year.
- The net loss narrowed to $134 thousand, improving from a $261 thousand loss the previous year.
- Year-to-date revenue declined by 7.7%, totaling $5.1 million.
- Cash reserves decreased significantly by $839 thousand to $326 thousand.
- Gross margin improved to 54.9%, indicating better cost management.
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