There can be no assurances that the company will meet its growth targets or its other strategic goals and objectives. As expected, our year-over-year revenue comparison was impacted by strong year-ago hardware deployments related to the material cell phone contract. Total second quarter revenue of $2.49 million reflected 8% growth in monitoring revenue, which is our highest margin and most predictable revenue stream. Hardware revenue was $1.06 million in the second quarter versus $2.21 million in Q2 last year.
Our Q2 gross margin improved by 750 basis points to over 82%, principally driven by the increase in monitoring revenue as a percentage of total revenue. These results reinforce our ability to maintain solid profitability and cash generation while investing in future growth. For example, in the residential market, we are advancing our growth potential through a new partnership with Champion Power Equipment. Given Champion's accelerating growth in the residential standby generator market, we believe this partnership provides significant long-term growth potential that should begin contributing to our results in the current quarter.
The same is true for our efforts to secure OEM bundling opportunities, which we continue to pursue as we believe these are worthwhile efforts to continue to increase our number of monitoring connections. Increasing frequency of severe weather events, combined with growing power demand from AI data centers, electrification, and reshoring, continue to highlight the critical need for resilient infrastructure. Additionally, attacks on critical communications infrastructure reached record levels in 2025, and we estimate that cell tower theft losses will reach approximately $500 million industry-wide in 2026, including copper and equipment theft. With the significant hardware revenue contributions from our large national cell phone provider now cycled through our year-ago comparison periods, we expect more favorable revenue and earnings comparisons moving forward.
| Metric | Period | Current guidance |
|---|---|---|
| Long-term revenue growth | Next 3-5 years | Reaffirmed ~20% average annual revenue growth (measured from the original ambition), with strong incremental operating leverage from the capital-light model |
| Year-over-year comparisons | 2H 2026 | Expect a return to more favorable year-over-year revenue and earnings comparisons in the second half of 2026 as the large contract cycles out of comps |
| Champion partnership | Current quarter (Q3 2026) onward | Champion Power Equipment partnership expected to begin contributing in the current quarter; economics in line with normal monitoring hardware sales (with a volume discount) |
| Blended gross margin | Going forward | Expected to average around 75% as hardware deployments expand (monitoring alone runs >90%) |
| OMNI360 / cell tower TAM | 2026 and beyond | Estimated cell tower theft losses ~$500M industry-wide in 2026; ~235,000 North American towers (~4 tenants each, ~1M potential users) — a 10% share of towers framed as a $100M+ revenue opportunity |
| Metric | YoY | Note |
|---|---|---|
| Total revenue | $2,489K vs $3,525K | A $1,141K hardware decline as year-ago material-contract shipments cycled out, partly offset by monitoring growth. |
| Monitoring revenue | +8% to $1,425K | Continued expansion of monitored endpoints; >90% gross margin. |
| Gross margin | 82.4% vs 74.9% (+750 bps) | Much higher relative contribution of high-margin monitoring revenue. |
| OmniMetrix segment operating income | $722K (vs $395K in Q1 2026) | Operating leverage on higher-margin mix, after ~$30K of pre-revenue Infrastructure Solutions expense. |
| Net income to stockholders | $294K ($0.12) vs $720K ($0.28) | Lower hardware revenue year-over-year; 1H 2026 net income $217K vs $1,184K in 1H 2025. |
| Topic | Previous mention | Current period | Trend |
|---|---|---|---|
| OMNI360 launch and cell tower focus | Two AIO demo sites live (Q1) | OMNI360 formally launched in three tiers with a 24/7 NOC and AI/predictive software; differentiators are an all-in-one single dashboard (generator, HVAC, power, environmental and AI security cameras) and best-in-class software; being showcased at ISE EXPO in Nashville; equipment ~$5,000 per full system (~$650 for a single generator monitor) plus ~$2,000/year monitoring. | — |
| Champion Power Equipment partnership | — | Not classified as an OEM deal because the product stays OmniMetrix-branded; makes OmniMetrix the standard monitoring option on Champion's aXis/fleX home standby generators (a newer, ~2-year-old product line), growing monitoring endpoints on new-unit sales rather than the installed base. | — |
| M&A discipline and capital allocation | — | Continues to review accretive M&A with a disciplined framework, having walked away from several deals where other bidders overpaid; unchanged targeting and financing approach, preferring debt over equity and keeping the share count low. | — |
| OEM bundling and AIO economics | — | Still pursuing OEM bundling (two OEMs); AIO agreement revenue-share steps down from about a half to a third (34%) over defined dollar targets. | — |
| Secular tailwinds | — | Severe weather straining the grid, record attacks on communications infrastructure, and rising AI cell-network traffic reinforce demand for resilient monitoring; management chose to keep cell towers (not data centers) the near-term focus given the ~$100M+ opportunity. | — |