CSPI

Shares of CSP Inc. CSPI have lost 10.3% since reporting results for the third quarter of fiscal 2026. This compares with the S&P 500 index’s 1.7% decline over the same time frame. Over the past month, the stock has fallen 6.3% against the S&P 500’s 3.4% return. For the fiscal third quarter ended June 30, 2026, CSP posted revenues of $14.4 million, down 6.8% from $15.4 million a year earlier. The net loss widened to $846,000, or 9 cents per share, from $264,000, or 3 cents per share. Gross profit slipped 2.7% to $4.3 million from $4.5 million, although the gross margin expanded 100 basis points to 30.1% from 28.8%. CSP Inc. price-consensus-eps-surprise-chart | CSP Inc. Quote Product revenues declined 2% year over year to $9.9 million, while service revenues fell 15.9% to $4.5 million. The product gross margin improved to 20.7% from 15.7%, whereas the service gross margin narrowed to 51.2% from 53.9%. The operating loss increased 26.1% to $1.5 million from $1.2 million. For the first nine months of fiscal 2026, revenues decreased 4.1% to $42.4 million. Gross profit rose 2.4% to $13.5 million, and the gross margin improved to 31.9% from 29.9%. CSP recorded a nine-month net loss of $491,000, or 5 cents per share, compared with net income of $100,000, or 1 cent per diluted share, a year earlier. Cash and cash equivalents totaled $24.7 million at June 30, down from $27.4 million as of Sept. 30, 2025. Current and long-term financing receivables totaled $16.5 million, reflecting CSP’s financing of customer purchases. The company extended terms on more than 20 transactions during the quarter, repurchased about 13,000 shares and declared a quarterly dividend of 3 cents per share. CEO Victor Dellovo said that the Technology Solutions business performed near expectations, supported by growth in cloud and managed services. CSP signed a six-year, seven-figure managed-service agreement with a professional sports organization and a three-year agreement with a food distributor that is expected to generate mid-six-figure annual recurring revenues. AZT PROTECT added customers and expanded deployments at existing accounts. All customer sites reaching their one-year renewal point renewed, producing a 100% renewal rate. CSP also completed AZT PROTECT integration with several original equipment manufacturer products, including Acronis software, and reported progress with a telecommunications partner in South Africa. Hardware delivery constraints were the main revenue headwinds. Vendor lead times that historically ran 30-60 days have stretched beyond 200 days, leaving the Technology Solutions backlog 65% above its year-ago level and delaying revenue recognition. Larger AZT PROTECT opportunities also carry sales cycles of 18-24 months, while customer testing, budget approvals and procurement processes have slowed site expansion. Research and development costs rose 5% year over year to $832,000, reflecting AZT customization and OEM integration work. Selling, general and administrative expenses increased 3% to roughly $5 million. Higher variable compensation in Technology Solutions and costs tied to the U.K. pension buyout transaction also widened the operating loss. A 58.7% increase in other income to $330,000 provided a partial offset. Management expects hardware delivery delays to continue through the fiscal fourth quarter and into the first half of fiscal 2027, but believes that the elevated backlog can support the fiscal 2027 results as orders convert to sales. Several large six-figure AZT PROTECT opportunities are nearing the end of their sales cycles, with potential decisions over the next six months. Acronis marketing materials and product identifiers were expected to be ready for a fall launch. Management also expects multi-year cloud contracts, service retention and broader cloud adoption to support recurring revenues and margins. CSP modified its direct sales organization during the quarter to better address lengthy enterprise sales cycles and pursue OEM, reseller and Fortune 500 opportunities. Management said that three of four salespeople who had left were replaced or scheduled to start. CSP also incurred a couple hundred thousand dollars of actuarial and legal costs related to the U.K. pension buyout transaction. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CSP Inc. (CSPI): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Revenue: $14.4 million in Q3 fiscal 2026, down from $15.4 million in the prior-year quarter. Product Revenue: $9.9 million, compared to $10.2 million in the year-ago quarter. Service Revenue: $4.5 million, down from $5.3 million in the prior-year period. Gross Profit: $4.3 million, versus $4.5 million in the same quarter last year. Gross Margin: 30.1% of sales, up more than 100 basis points from 28.8% in the prior-year quarter. Product Gross Margin: 20.7%, compared to 15.7% in Q3 fiscal 2025. Service Gross Margin: 51.2%, versus 53.9% in the year-ago quarter. Research and Development Expenses: $832,000, a 5% increase from $791,000 in the prior-year quarter. Sales and General Administrative Expenses: $5.0 million, up 3% from $4.9 million a year ago. Operating Loss: $1.5 million, compared to a loss of $1.2 million in the prior fiscal third quarter. Net Loss: $846,000, or 9 cents per share, versus a net loss of $264,000, or 3 cents per share, in the prior-year quarter. Cash and Cash Equivalents: $24.7 million as of June 30, 2026. Nine-Month Revenue: $42.4 million, compared to $44.3 million in the same period last year. Nine-Month Gross Profit: $13.1 million, or 31.9% of sales, versus $13.2 million and 29.9% of sales in the prior-year period. Nine-Month Net Loss: $491,000, or 5 cents per share, compared to net income of $100,000, or 1 cent per diluted share, in fiscal 2025. Dividend: Board approved a dividend of 3 cents per share, payable on September 15, 2026. Warning! GuruFocus has detected 2 Warning Signs with CSPI. Is CSPI fairly valued? Test your thesis with our free DCF calculator. Release Date: August 14, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Achieved 100% renewal rate on all AZT Protect customer sites reaching their one-year renewal period, demonstrating strong product retention. Gross margin expanded by over 100 basis points to 30.1% of sales, driven by improved product gross margin of 20.7% versus 15.7% in the prior year. Signed a six-year, seven-figure managed service agreement with a nationally recognized professional sports team, entering a new market. Completed integration of AZT Protect into several OEM products, including Acronis Software, with a fall launch on track and a growing OEM pipeline. Service gross margin increased 1.3% compared to the prior year period, reflecting continued growth in the cloud and managed service business. No AZT Protect customer has experienced a breach, and the company has developed a catalog of AI-driven exploits it can prevent, strengthening its competitive position. Total revenue declined to $14.4 million from $15.4 million in the prior year quarter, impacted by hardware shipment delays and longer AZT Protect sales cycles. Net loss widened to $846,000 or 9 cents per share, compared to a net loss of $264,000 or 3 cents per share in the prior year quarter. Service revenue decreased to $4.5 million from $5.3 million in the prior year, reflecting vendor delays. AZT Protect sales cycles for large enterprise opportunities remain lengthy (18-24 months), with expansion phases taking longer than anticipated due to stakeholder alignment and internal review processes. Hardware shipment delays are expected to persist for at least a year, with lead times averaging around 200 days compared to 30-60 days historically, impacting revenue recognition. Operating loss increased to $1.5 million from $1.2 million in the prior year, partly due to variable compensation and costs related to the UK pension buyout. Q: Can you provide more detail on the new sales force strategy, given that several salespeople from last year are no longer with the company?A: Victor Dellovo, CEO, clarified that this is not a new strategy but an adjustment to the longer sales cycles in the OT market. The company replaced three out of four salespeople who left, bringing in individuals accustomed to longer sales cycles. The focus remains on OEMs, resellers, and direct engagement with customers to accelerate the sales process. Dellovo emphasized that the company is also working to build trust with resellers to gain access to their best customers, which takes time. Q: What is driving the 18 to 24-month sales cycle for larger AZT Protect opportunities?A: Victor Dellovo, CEO, explained that the extended cycle is a combination of factors, including customers being in existing contracts with other cybersecurity providers, the need for extensive lab testing, and internal political dynamics. He noted that while OT teams often love the product, IT departments controlling the budget can slow the process. He also mentioned that some deals close much faster, such as a wastewater customer in six weeks, but larger deals ($700,000+) typically take 12 to 24 months. Q: With the Acronis integration complete, what kind of revenue can we expect from this partnership?A: Victor Dellovo, CEO, stated that he has no idea yet regarding revenue projections. He explained that the integration process was lengthy because Acronis needed to integrate AZT Protect into multiple systems globally. The sales and renewal teams were told to slow down until all SKUs are available, with a target of October 1st for full integration. After that, the company will re-engage with Acronis's sales team to push the product. Q: Can you elaborate on the progress with OEM partners, particularly in South Africa and the U.S.?A: Victor Dellovo, CEO, confirmed that the company is working with multiple OEMs beyond Acronis. In South Africa, a large telecommunication customer is now working on a third purchase order with AZT Protect embedded in the deployed solution. In the U.S., there are three other OEMs at different stages of discussion. Dellovo noted that the integration challenges are largely behind them, and they are applying lessons learned to accelerate progress in this segment. Q: How is the U.S. government's ban on foreign-made routers impacting product delivery?A: Victor Dellovo, CEO, stated that the ban is not impacting CSPI directly, as they deal with U.S.-based name brands. However, the broader AI build-out is causing significant delays in memory, hard drives, and processors, with lead times averaging around 200 days compared to the usual 30-60 days. He expects this situation to persist for at least another year, as major tech companies continue to absorb supply. Q: Can you provide an update on the partnership with UFT and the recent attacks on water utilities?A: Victor Dellovo, CEO, confirmed that CSPI has a long-term relationship with UFT, which started as a cloud customer and evolved into a reseller for AZT Protect. UFT has been testing the product in their lab and with three of their customers to ensure it works across different environments (Siemens, Emerson, Honeywell). Dellovo hinted that new joint announcements are expected in the next two to three weeks. Q: What is the current status of the company's balance sheet and share repurchase plans?A: Gary Levine, CFO, reported that the company finished the quarter with $24.7 million in cash and cash equivalents. They extended terms on over 20 transactions, with about 30-40% of receivables being longer-term. The company repurchased approximately 13,000 shares during the quarter and continues to pay a dividend of 3 cents per share. Mike Price, an analyst, noted that cash plus financed receivables total about $40 million, which is significant relative to the company's market cap. Q: How is the company addressing the challenge of moving the needle with multi-billion-dollar companies?A: Victor Dellovo, CEO, acknowledged the frustration and explained that CSPI is leveraging relationships with large resellers like Rexel Datacom, CED, and Sonopar to gain access to enterprise customers. He emphasized that building trust with resellers' salespeople takes time, as they are protective of their best customers. The pipeline has grown significantly, with 15 large opportunities in South Africa alone, and the company is down to the final two in one major selection process. Q: What was the financial impact of the UK pension buyout in the quarter?A: Gary Levine, CFO, confirmed that the company sold the UK pension to an insurance company, incurring actuarial and legal costs of a couple hundred thousand dollars in the quarter. This one-time expense contributed to the operating loss. The company's U.S. pensions are funded through life insurance policies, reflected as cash surrender value on the balance sheet. Q: Can you provide more details on the new managed service agreements signed during the quarter?A: Victor Dellovo, CEO, highlighted two significant wins: a six-year, seven-figure managed service agreement with a nationally recognized professional sports team, and a three-year agreement with a food distribution customer expected to generate mid-six figures in annual recurring revenue. These agreements underscore the growth in the company's managed cloud and managed service practice, which continues to drive gross margin expansion. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Image source: The Motley Fool. Friday, Aug. 14, 2026 at 10 a.m. ET Chief Executive Officer-Victor J. Dellovo Chief Financial Officer-Gary W. Levine Operator: Good day, everyone. Welcome to CSPi's Third Quarter Fiscal Year 26 Conference Call. At this time, all participants after the presentation. It is now my pleasure to turn the floor over to your host, Michael Polyviou. The floor is yours. Michael Polyviou: Thank you, Kelly. Good morning, everyone, and thank you for joining us to review CSPi's initial results for the fiscal 26 third quarter which ended on June 30, 2026 as well as recent operating developments. Today, with me on the call is Victor J. Dellovo, CSPi's chief executive officer and Gary W. Levine, CSPI's chief financial officer. After Victor and Gary conclude their opening remarks, we will then open the call for questions. During the Q&A session, we ask participants to limit themselves to 1 question and 1 follow-up question, then to please requeue if you have additional questions. In advance, thank you for your cooperation with this process. Statements made by CSPi's management on today's call regarding the company's business that are not historical facts may be forward looking statements as those identified in federal securities laws. The words may, will, expect, believe, anticipate, project, plan, intend, estimate, and continue, as well as similar expressions are intended to identify forward-looking statements. Forward looking statements should not be meant as a guarantee of future performance or results. The company cautions you that these statements reflect the current expectations about the company's future performance or events and are subject to several uncertainties, risks, and other influences, many of which are beyond the company's control that can influence the accuracy of the statement, and the projections upon which the statements are based. Factors that may affect the company's results include, but are not limited to the risks and uncertainties discussed in the Risk Factors section of the annual report on Form 10-K and the quarterly report on Form 10-Q filed with the Securities and Exchange Commission. Forward looking statements are based on information available at the time those statements are made and management's good faith belief as of the time with respect to future events. All forward looking statements are qualified in their entirety by this cautionary statement and CSPi undertakes no obligation to publicly revise or update any forward looking statement whether as a result of new information, future events, or otherwise after the date thereof. With that, I will turn the call over to Victor J. Dellovo. Chief Executive Officer. Victor, please go ahead. Victor J. Dellovo: Thank you, Michael, and good morning, everyone. Technology solution business performed near our expectations during the fiscal third quarter. Reflecting solid growth in our cloud and managed service business. However, our third quarter financial performance was impacted by what we believe are 2 relatively short term factors. First, while the technology solution business continue to generate solid order growth during the quarter, our ability to convert those orders into revenue has been impacted by longer hardware vendor delivery times. In many cases, vendor deliveries that historically took 30 to 60 days are now extending well beyond 200 days. As a result, our Technology Solutions backlog is now 65% higher than it was a year ago. The second factor impacting our top line performance is the continued ramp of our AZT Protect business. And the longer sales cycles associated with larger enterprise opportunities. We made meaningful progress during the quarter. However, I believe we can and will do better. As we pursue larger accounts, we continue to add new land and expand customers while expanding relationships with existing customers as our customer base grows. We continue adapting to each customer's unique deployment time lines and procurement process for rolling out additional protect protected sites after the initial installation. We recognize that every customer has different priorities, and often multiple competing projects that can delay expansion. Our ability to execute within this environment continues to improve. We believe several initiatives will position us to expand both the number and size of AZT Protect opportunities over the next 6 months. First, we are nearing the end of the 18 to 24 month sales cycle for several large 6-figure opportunities and remain optimistic about converting a number of those into contracts. Second, we continue to see growing opportunities for AZD Protects to become part of an OEM customer solution During the quarter, we completed the integration of our AZT Protect into several OEM products and are beginning to see a growing pipeline from this market segment. While OEM sales cycles are lent they create attractive long term recurring revenue opportunities once integrated. A good example is our relationship with the Acronis software. Where the integration has been completed and we understand mark we and we understand marketing materials and SKUs are on track for a fall launch. Another example is the work in South Africa. Where our OEM partner, large telecommunication customer, is now working on a third purchase order with an AZT Protect embedded in the deployed solution. With the integration challenges and unpredictable timelines largely behind us, we are making meaningful progress in the South African telecommunication market. We are applying the lessons learned from this deployment to other OEM-led relationships currently under development and expect continued progress in this segment over the coming quarters. A third initiative implemented during the quarter was the continued evolution of our direct sales organization on Fortune 500 customers. Our experience with distributors, OEMs, and large direct customers has reinforced that our sales organization must effectively serve all 3 channels while addressing the unique requirements of each customer. We believe the changes made during the quarter better position our sales team to shorten the sales cycle, broaden the sales funnel and improve execution as we enter into the new fiscal year in October. We remain committed to the land and expand strategy. Our approach is to secure the initial deployment at 1 customer site, validate the AZT protect performs as expected within the customer's existing cybersecurity infrastructure. And then deploy deployment across additional sites. This expansion phase has taken longer than anticipated, largely because of the evolving stakeholders' alignment and internal review process. But we believe our enhanced sales organization will help accelerate expansion by engaging higher-level decision makers within customers' organization. Changes within the customer organization often require us to rebuild momentum. While some customers seek additional validation before approving broader deployment. In other cases, IT organizations initially believe their existing infrastructure adequately protects OT environments when expansion opportunities become larger enterprise projects. This creates an opportunity for us to educate customers on the unique requirements of operational technology. The data we have collected from existing deployments combined with strong customer references has enabled us to build a compelling business case demonstrating why AZT Protect is a better solution for OT environments. While these dynamics are a natural part of selling into complex and evolving markets. We believe we are becoming increasingly effective at influencing the customer's decision. We made solid progress with AZT Protect during the third quarter by signing new customers and expanding deployments within existing accounts. In addition, we achieved 100% renewal rate on all customer sites reaching their 1 year renewal period. We have also advanced into final stages of the selection process within several major corporations, demanding continues to be supported by the growing number of cyber attacks disrupting operations worldwide. As well as increased awareness of AI driven threats and so called friendly fire incidents generated by internal systems. Traditionally, cybersecurity solutions rely heavily on continuous patching. Which is often impractical in OT environments. Friendly fire incidents where IT inadvertently sends faulty updates into production environments can be just as disruptive as an external attack. AZT Protect prevents these production disruptions while eliminating the needs for ongoing OT applications security patching. To date, no AZT Protect customer has experienced a breach. We have also developed an extensive catalog of AI driven exploits. Emerging through 2026 that AZT Protect is designed to stop. 1 highly publicized example was the OpenAI ChatGPT related attack involving Hugging Face. Based on the publicly available information, we believe AZT would have prevented the attack, and we have publicly shared those findings. We continue to believe AZT Protect has little effect effective competition in defending against these emerging AI attacks while eliminating the need for code level security patching in OT environments. We remain intensely focused on expanding our sales opportunities as we enter the new fiscal year. Turning to our Technology Solutions business. It once again served as our primary revenue generator despite ongoing hardware shipment delays. Our offer offering continues to improve the efficiency and effectiveness of our customers' IT investment across networking, wireless, mobility, unified communication, data center and advanced cybersecurity. A managed cloud and managed service practice continues to grow at a healthy pace. We continue to benefit from the ongoing migration to the cloud and the increasing demand for managed operational support after those migrations are complete. A key driver remains the growing complexity of cloud environments. And the unique requirements of enterprise customers. During the quarter, we entered the professional sports market with the signing of a 6-year, 7-figure managed service agreement with a nationally recognized sports team. We expect to issue a joint press release in the coming weeks. We also signed a 3-year managed service agreement with a food distribution customer expecting to generate mid-6 figures annual recurring revenue. Looking ahead, we believe our best in class service organization, exceptional high customer retention, and continued adoption of cloud-based service will drive further service growth and support continued gross margin expansion. During the quarter, service gross margin increased 1.3% compared to the prior-year period. While we recognize there is still work to do before fully realizing the value of our award winning product in customer service, we have made significant organizational improvements that position us well for the continued growth. With that, I will turn the call over to Gary to discuss our financial results in more detail. Gary W. Levine: Thanks, Victor. For the third quarter ended June 30, 2026, we generated $14.4 million in revenue compared to $15.4 million with the third quarter ended June 30, 2025. Product revenue was 9.9 million compared to 10.2 million for the prior fiscal year third quarter. Service revenue for the quarter was $4.45 million compared to $5.3 million in the prior year, reflecting the vendor delays issue mentioned earlier. Gross profit for the quarter was $4.3 million compared to $5.45 million for the same prior year period. Gross margin for the third quarter grew by more than 100 basis points to 30.1% of sales compared to the year ago fiscal third quarter. Gross margin was 28.8% for the sales in the prior year's third quarter. Gross margin realized from product revenue for the quarter was 20.7%, compared to 15.7% for the third quarter of fiscal 25. But gross margin realized from service was 51.2% as compared to 53.9% for the year ago quarter. Research and development expenses increased 5% to $832 thousand compared to $791 thousand the same prior year quarter as we supported customization of the AZT Protect deployments and OEM embedding developments. Selling, general and administrative expenses for the fiscal third quarter increased 3% to 5 million from $4.9 million a year ago fiscal third quarter. The company grew other income during the quarter by 58.7%. Due to the increase in physical transactions with customers. Increase in variable compensation to the TS division, and costs related to the buyout sale of the UK pension which increased our operating loss for the quarter to 1.5 million from $1.2 million in the prior fiscal third quarter. With the other income earned on our net loss was $846 thousand or 9¢ per share of common for the third fiscal quarter compared to a net loss of $264 thousand or 3¢ per share of common in the prior year's third quarter. Our strong balance sheet continues to provide us with resources to finance customer purchases And as of June 30, 2026, we extended terms on over 20 transactions. We finished the quarter with cash and cash equivalents of $24.7 million the balance sheet continues to provide us with the necessary resources to execute our growth strategies for the managed service business and the AZT Protect product offering as well as paying a dividend of 3 cents per share and we purchased approximately 13 thousand shares of common stock during the quarter. Turning to our results for the 9 months of fiscal 26, revenue was $42.4 million compared to 44.3 million in the same period of the prior year. Gross profit for the fiscal 9 months ended June 30, 2026 was $13.5 million or 31.9% of sales compared to $13.2 million and 29.9% of sales. The company generated $1.4 million on other income and realized a tax benefit of $654 thousand during the first 9 months of fiscal 26. During the same period of fiscal 25, the company generated 1.1 million in other income and realized a tax benefit of $1.5 million. The company's net loss for the 9 months of fiscal 26 was 491 thousand or 5¢ per common share. As compared to a net income of $100 thousand. Or 1¢ per diluted common share for the comparable period during fiscal 25. Lastly, the board of directors approved a dividend of 3¢ per share of common to be paid on September 15, 2026 to shareholders of record on August 28, 2026. Victor J. Dellovo: We will now take your question. Operator: Certainly. The floor is now open for questions. If you have any questions or comments, please press 1 on your phone at this time. We ask that while posing your question, you please pick up your handset listening on a speakerphone to provide optimum sound quality. Please hold for just a few moments while we poll for questions. Your first question is coming from Joseph Nerges with Segren Investments. Joseph Nerges: Good morning, guys. How are you today? Victor J. Dellovo: Good, Joe. Joseph Nerges: Let me dive in on the OEM direction you are going. I am assuming that you are Acronis would be the 1 OEM you are talking about. Currently. Right? Mhmm and then Yeah,. Victor J. Dellovo: there is other ones that we are we are in the process of working with also. Joseph Nerges: Okay. And is there an OEM Were you referring to an OEM in the--in the Internet of Things IoT, the we are dealing with an OEM in that respect, in that area. Victor J. Dellovo: Or a plant Well, it is all in that area. it is you know, there is there is a couple OEMs we are dealing with where they make boxes. And we are trying to get integrated on their platform. there is other OEMs in South Africa that they make other equipment which I cannot mention right at this second, but they make certain equipment which again, we are trying to get embedded on their product So as soon as the product goes out the door, you know, we are, we are there, and then we just turn up the license and, you know, do a true up every month or every quarter. Joseph Nerges: Any additional OEMs in The US? Victor J. Dellovo: Or are we Yes. there is there is 3 other OEMs in The US right now we are we are talking with at different stages. Joseph Nerges: Okay. And I have 1 other question on that is you know, we announced the Acronis deal. It goes back. I looked at Yeah,. The history. Back September last year. Yep. And you mentioned it in the call about the length of it is taking to embed these things. Do we envision that same length on these other deals? I mean, you know, I could see a year seems like a long time, almost a year. And are we hoping that we could shorten that process? Victor J. Dellovo: it is not us, Joe. it is never us. it is always them. Be h1st with you. They are larger organizations that truly move at a slower pace. Mhmm. You know, just due to the fact, I guess, of pure size sign-off and various things. it is never us. We are always there quickly. We are always waiting. Let's put it that way. And this nothing else, I think, that we could possibly do to speed these large, large, multibillion-dollar companies to move faster. And because of our size and you know, it is hard to move these guys. I can promise you, you know, we do stay on top of it constantly every week, maybe times a week to try to move things along as fast as possible. You know, it is with Acronis, is out of our control. Yeah,. 95% of it is out of our control. Anything we can control, we have a plan. We have a timeline, and we try to meet it. Joseph Nerges: Just 1 other thing on and this goes to another point. The Hugging Face attack was you know, the press release on Monday. Mhmm. I do not I do not think some people realize. We do have a how can I say it? We have a partnership that we have not announced that I know of. With a very large partner that deals quite heavily with the federal government. This partner also from my research, has a embedded cybersecurity lab in their thing. I am just wondering I am I am sure the federal government is really high up on these hacks. I will call it cyber attacks by software, no less. And I am just wondering, you know, have we talked to this partner as far as getting us--getting a test with the government? Somehow? You know? Victor J. Dellovo: Again, I know who I know who you are talking about, which I which I cannot mention, but we do talk to them. We have standard calls every 2 weeks. And, again, because their size you know, we Yeah,. We have to move at their pace. But and what they tell us is minimum of what goes on between them and the government directly. Joseph Nerges: I have no idea, Joe, to be honest with you. Oh, I know. But finally, we have something that might appeal. Let's put it that way. If nothing else, somebody at the government level. that is all I am saying. Victor J. Dellovo: If you can finally get through there, the bureaucracy Mhmm. Of these larger I think that is why we just put that out just so to let everyone know, you know, compared to some of the other products that are out there that are not stopping these various viruses or attacks, you know, coming from different--the way our technology is made, we are made to stop these things. Right? So I think that was more of a educational press release just for either people looking at a product or you know, the confidence of different customers already using the product. Joseph Nerges: So And I am gonna extend 1 more question. Just recently, a lot of attacks in the last couple weeks with the utilities, the water utilities, wastewater utilities. Partners, UFT, and I see recently we signed another partner with SITCO. I--in that we have we gotten any feedback from those guys in the last couple weeks? I mean, with what is what is happening in that area, as far as updating some of the customers looking to do some updates. Cybersecurity wise? Victor J. Dellovo: Yeah,. We have a standard call with UFT. SITCO is a newer company that we signed up, so that relationship is still working. But we have a good long term relationship with UFT, because not only are they, a cloud customer of ours, that is how the relationship started, you know, probably back 4 or 5 years ago because of Tesco, 1 of the companies they own that concentrates on the water and waste and water plants. that is how they became a reseller for the product. Again, because of their size, they have a process, and the process is a, get through legal, 2, which takes forever. You know, second stage was get it into their lab, which took a while also. And then they wanted 3 customers of theirs to use the product for a period of time. So before they pushed it out or present presented it to all their customers that they had confidence that AZT would work in, like, different products, whether it is Siemens, Emerson, you know, you name it, H1ywell. You know, their goal is to sell it as a, you know, a product and service directly from their sales team that they had confidence that it would, you know, represent them correctly. And so that has taken probably, we are in about 9 months now. We will be announcing some new things that I will not tell you right now, but you will see them in the next 2 or 3 weeks some things that we will be doing together. Joseph Nerges: Alright. Thanks. I will get back in the queue. Victor J. Dellovo: Thank you. Guys. Gary W. Levine: Thanks, Joe. Operator: Your next question is coming from Will Lauber with Visionary Wealth Advisors. Please pose your question. Your line is live. William Lauber: Yes. Victor, if you can kind of expand a little bit on it. I am not quite sure I understand the Salesforce, new strategy. I would noticed, I guess, from LinkedIn that a number of the salespeople, that were there last year are no longer with you guys. And if you can kind of explain kind of just development in the Salesforce and what the new strategy is. In a little bit more detail. Victor J. Dellovo: Yeah,. it is not a new strategy. We just it is because of the sales cycle, due to individual financial--you know, everyone has their own financial capacity of how long they can wait for a sale to close. We needed to kind of get into some salespeople that were used to a longer sales cycle that came from the marketplace, and that is kind of what we just, you know, ended up replacing 3 out of the 4 salespeople already that left the organization. Yeah,. And, you know, 1 of them is already up and running. 1 started this week. 1 starts next week. Yeah,. And, you know, we are we are still focused on the OEM. it is a it is a specific business. We are working through all the resellers as we normally have. But we are also putting a heavy emphasis of us, as in, you know, Aria talking to the customers directly to try to move this along. As fast as possible. it is not always easy for the resellers to give us the contact info, but, you know, as time goes on, the trust builds so they know that we are gonna treat that customer with white glove service. William Lauber: Okay. So would it be safe to say that I guess, the Salesforce is gonna be more compensated on commission rather than salary, or how is that I would rather not If we wanna have a sidebar on that, we can we can talk to you or rather talk about that in this audience. Okay. Okay. And then if I could just get a little bit when you had menti1d the 18 to 24 month sales cycle, is that because the customers are in current contracts with other cybersecurity contracts and they that is when it expires, or is it something that with the big companies, it just takes that long for them to kind of test it and go through everything? Or what is the driver of that? Long sales cycle? Victor J. Dellovo: it is a combination of both, I would say. it is not it could be 1 or the other. 1 is coming up for, you know, for renewal or, you know, sometimes the Windows 10. Is you know, that is a big push where some of the, you know, our competitor products are not supporting any longer. So that would drive, you know, them to look. And then it is, it is a lot of it is political. You know, to be honest with you. You got the OT guys who love it, want to move fast, and then you got IT folks who have to go because it is their budget. You know, they bring it into a lab. They take their time. You know? They gotta go through. It you know, it just there is no rhyme or reason. You know? You know, we do know now for sure that if I if it comes from IT, we have to engage with them immediately because if they truly have the purse strings, they are making the ultimate decision. Even if the OT guys love it, if they do not control the budget, they are not making, you know, they can influence the sale, but they will not make the ultimate decision on that. So, you know, some lessons learned, over the last year or so on how these larger organizations and the political piece of it kind of rolls out So yeah. William Lauber: You know, I just kinda gave an 18 to 24. You know, we have closed some other business that took a lot shorter. Victor J. Dellovo: You know? Wastewater, we closed some businesses that, you know, you know, took 6 weeks. Right? So but the large you know, 700 thousand million-dollar deals, you know, it is it I would say, you know, it could take 12 months if to 24, somewhere in that range. William Lauber: If I can do anything to show on that, you can believe that I am trying. Okay. And, with Acronis, I know that they would sold at least 2 joint webinars with y'all. And I guess that was even before that product was integrated into their system. Have you gotten any indication as to what kind of interest that they are seeing from their customers? Victor J. Dellovo: Yeah,. We kind of had to put everything on hold, to be honest with you, just because there was no way for their sales team to sell it. Right? They were the getting products integrated into their system takes quite a bit of time. it is just a process they have because, you know, it touches multiple systems and you know? it is a it is a process. So not only do we have to do they did significant testing with it. They also had to get it integrated. So they will be able to sell it, you know, not just in The US, but all over the world. So what that is gonna look like, we are gonna have to reengage with the sales team, the renewal team. You know, it is it is we are gonna have to kick start it up again, but the VPs of sales said until this is fully integrated and all the SKUs are available, you need to kind of slow your roll, and that is kind of where we are at right now. So, you know, promises of October by October 1, everything should be integrated and then we will go full steam ahead trying to, you know, educate the sales team. Get the renewal team on board, and, you know, push it out. William Lauber: Okay. Alright. I will go back in the queue. Operator: Thank you. Your next question is coming from Mike Price. Mike Price: Good morning. I am just can you give us an idea of what the completed product integration with the Acronis software means when it is totally rolled out in terms of revenue What are we gonna see from that? Victor J. Dellovo: I have no idea yet. Mike Price: Okay. And can you tell us how much of the I have not seen the 10-Q. How much of the receivables are being financed? Both short and long term? Gary W. Levine: The probably well, it broken out on the--it is probably about 30 or 40% longer term. And the dollar amount? Mike Price: Mean, last quarter, it was 7.7 and 8.6 over a year. Gary W. Levine: Yep and let's see. Right now, it is 8.3. Mike Price: On the longer, over a year? Gary W. Levine: Yeah,. Mike Price: So, effectively, the receivables that are financed are going to become cash. Is that correct? So you have cash and receivables that are being financed equivalent to about $40 million? 40 million. Cash and inquiry. Gary W. Levine: Yeah,. Yep. Mike Price: Oh, you mean if you add those together? Yep. Gary W. Levine: Exactly. Mike Price: Okay. I mean, just trying to get an idea of the company where you have cash and receivables that are being financed at $40 million, and we are looking at less than an $80 million mark market cap. Okay. Can you give us can you tell us how many shares were repurchased last quarter? Gary W. Levine: 13 thousand. Mike Price: 13 thousand? Gary W. Levine: Yep. Mike Price: Okay. Is the intent still to buy shares, especially at this price? Victor J. Dellovo: Absolutely. Mike Price: Okay. And my final question is, you we appreciate the press release about OpenAI's attack on, Hugging Face could have been prevented. And going back a year and a half, what happened with CrowdStrike and the fact that the old Microsoft operating systems, anybody using it can be protected. And these are great talking points, and you said it is hard to move the needle on billion dollar or multibillion dollar companies. The market has to be aware of AZT in what it can do. And having a 100% retention is really saying something for the product Is there not somebody out there that CSPi can partner with that can move the needle on these multibillion dollar companies faster than what we 've seen? Victor J. Dellovo: I mean, Victor, it was--Mike. Yeah. We are trying to do that, Mike. You know? that is why we are working with the Rexel, DataComms of the world, you know, the CEDs, the ePlus, you know? Because of the relationship they have, that is why we are leveraging those resellers to try to, you know, get them to, walk us in as 1 of their you know, premier partners. And that is that trust you know, when talking to the salespeople, Mike, they are like, OK. I know Aria. I know you guys are set up. I know you checked all the boxes. But, you know, this is my best customer. Right? I am a little nervous that if I walk you in, so you have to build trust with that salesperson. And that does not take, you know, 1 drink on a Friday night. You know? It takes time. You know? They only have 4 or 5 customers each. So it is it is getting them to walk us into the lodge enterprise hand in hand. That takes some time. You know? And that is kinda where we are working with these folks is so we can use their reputation because they have been doing business with these with these companies. But it is still a process because they are like, OK. We get to the table, and you know, I do not wanna share. who we are talking to right now, but there is a lot of large org our pipeline has grown tremendously from quarter to quarter with real companies with real budgets. So I think the team did a great job even turning the sales team over. They did a really good job. You know, this gentleman, George, has been with us now for 6 months. He did a really good job picking it up and keeping the ball moving. On some of these large opportunities. On the South African stuff, I was on a call with them, too. there is a lot of this, probably 15 really, really good opportunities that we have been working with for 6, 7 months now. So, you know, when I started into this side of it, Mike, I had no idea it was gonna take this long because the world of IT does not take this long. But the OT world, it just does. So we are trying to leverage every partner we have every resource we have to try to build that rapport with the end user. But there is a process that they go through. It goes in multiple labs. It has to be working for 90 days. Mike Price: And then, you know, then it goes through a purchasing process potentially And they were looking at when they look at AZT, they look at all the products along with it. 5 or 6 or 7 other products. You know, there is 1 I menti1d in the script that, you know, we are down to 2. There were 15 different options they were looking at. it is you know? And then when I wanna say this is 18 months in the making, it is 18 months, and we are down to 2. You know? Hopefully, at the end of the day, we are the ones that they choose. And it is a big, big opportunity. Mhmm. Well, it just seems like ARIA and AZT should be household names And the expectation is if it catches fire, it will catch fire, and we will see exponential growth And then you know, everybody's happy, but it is like you said, it is just seems to be taking forever. So it is very frustrating from an investor standpoint. But I appreciate your I appreciate your diligence. Victor J. Dellovo: Yep. Appreciate your diligence. Thanks, Mike. Operator: Your next question is coming from Brett Davidson with Investletter. Please pose your question. Your line is live. Brett Davidson: Good morning. I just got a couple quick questions here. The router ban by the US government the foreign made routers, is that impacting the delivery of product? Victor J. Dellovo: Not for us. No. These are just the name brands. That Mhmm. You know, that are all US-based. it is it is just with all the AI build out, it is every memory, hard drives, processors. it is everything's just taking a long time. Brett Davidson: You know? it is on the average around, you know, 200 days. Right now. Victor J. Dellovo: Compared to 30 to 60. And we just keep closing the business, and the funnel will just keep growing. And when it gets released, we will just keep processing it. that is all we can do. We do not make the product, so I have no control of when we get it. Brett Davidson: Is this gonna I mean, is this gonna and, again, I realize you are talking about third parties, but I mean, what do you anticipate the resolution of this looking like? Are you gonna are you gonna get caught up over the next 6 months, or is this just gonna dribble in? You know, the delay is just gonna be extended continuously, maybe not expanding, but, you know, it is gonna be constant struggle for the next 6 months, a year to get your hands on this material. Any insight at all? Victor J. Dellovo: I would say it is probably at least a year of this. I am you know, I do not have a crystal ball, and they may have better, but they are not giving us any you know? As long as the big boys keep buying all the product out there, this is not gonna go away. Any anytime soon. You know, I do not wanna guarantee that, but that is that is the feeling right now. it is going to take some time for this to flush out. Brett Davidson: I am sure you have seen the spend numbers, but, I mean, trying to remember which 1 it was. Spent 800 billion this past quarter. 200 billion from Google. Those numbers are not sustainable, so I am thinking maybe in the next year, yeah, this is gonna start to resolve itself. Victor J. Dellovo: Yeah,. Someday this will wash out. You know? But I do not know exactly when. My goal is to keep building the recurring revenue business on the MSP. The cloud business, and AZT. Those 3 things that I can kind of control, and that is what we are focused on. Know, the hardware software side of it, is definitely you know, it is a it is a significant part of the business, and it pays a lot of bills. Right? But that is the part that I do not have any control of. Brett Davidson: And this impacted the gross margin? The holdback on you getting a hold of inventory. Victor J. Dellovo: Oh, and held back not--well, the gross profit. Right? Because we did not we were not able to recognize, you know, revenue, which, you know, that is kinda why a big piece of why I think we were off on the quarter is just our Yeah,. Our backlog increased by, I what was it, 63% or something like that. 65%. Yeah,. 65%. Yeah,. Brett Davidson: Alright. Well, thanks so much. Victor J. Dellovo: Thanks. Thanks, Brad. Operator: Once again, if there are any questions or comments, please press 1 on your phone at this time. Please hold a moment while we pull for any additional questions. You do have a follow-up question from Joseph Nerges with Segren Investments. Please pose your question, your line is live. Joseph Nerges: Yeah. Just 1 more question. You Gary, you menti1d that we are out of that we are out of The UK now with their Pension. Pension system. Is that it? Gary W. Levine: We bought out the--so no. We sold it to insurance company. Sold it. Yep. Joseph Nerges: Okay. And what did that hit how much did that cost us in the quarter? Couple 100 thousand? Gary W. Levine: What was the--Yeah. It was the actuarial and legal costs. Came through, and now it was a couple hundred thousand. Joseph Nerges: Okay. So no more we have no more problem with we are finished with that long term pension because we obviously, the German operation was sold a long time ago. And The US operation does not have that same we do not have that with our--no. Gary W. Levine: We have the life insurance that yeah. That funds that. Indirectly. it is not part of the but our pensions that we have in the company are funded through that. that is what the cash surrender value on the balance sheet. Joseph Nerges: Okay. Alright. Well, thank you very much. Appreciate it, guys. Gary W. Levine: Yep. Yep. Victor J. Dellovo: Thanks, Joe. Operator: There are no additional questions in queue at this time. I would now like to turn the floor back over to Victor J. Dellovo for closing remarks. Victor J. Dellovo: Thank you, everyone, for joining us today. We continue to work toward maximizing our value for the remainder of fiscal 26 and fiscal 27. Both on the service side of our business as well as with AZT Protect, and we look forward to reporting our progress with you. In the meantime, thank you to our shareholders for their support. To our team for their dedication and effort and we wish everyone a good remainder of their day. Goodbye for now. Operator: Thank you, everyone. This does conclude today's conference call. You may disconnect your phone lines at this time, and have a wonderful day. Thank you for your participation. Before you buy stock in Csp, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Csp wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $421,511!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,381,960!* That performance is why people listen. With a track record of beating the S&P 500 by nearly 5x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 15, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. CSP Inc. (CSPI) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in CSP Inc.? Here are five stocks we like better. Revenue and profitability weakened: Fiscal Q3 revenue fell to $14.4 million from $15.4 million, while net loss widened to $846,000, or $0.09 per share. Hardware delivery times exceeding 200 days delayed revenue recognition, although the Technology Solutions backlog rose 65% year over year. AZT PROTECT is pursuing larger growth opportunities: CSPi is nearing the end of several 18- to 24-month enterprise sales cycles and is expanding OEM integrations, including a planned Acronis launch. The company reported a 100% renewal rate for customer sites reaching one-year renewals. Managed services momentum and financial flexibility continued: CSPi signed a six-year, seven-figure sports-team agreement and a three-year contract expected to generate mid-six-figure annual recurring revenue. The company ended the quarter with $24.7 million in cash, repurchased about 13,000 shares and maintained its $0.03 quarterly dividend. CSP (NASDAQ:CSPI) reported lower fiscal third-quarter revenue and a wider net loss as longer hardware delivery times delayed the conversion of orders into revenue, while the company continued to build its managed services business and pursue larger enterprise opportunities for its AZT PROTECT cybersecurity offering. For the quarter ended June 30, 2026, revenue was $14.4 million, compared with $15.4 million in the prior-year quarter. Product revenue declined to $9.9 million from $10.2 million, while service revenue fell to $4.5 million from $5.3 million. → Lumentum Just Delivered the AI Growth Investors Wanted Chief Executive Officer Victor Dellovo said the Technology Solutions business performed near expectations and continued to generate order growth, but vendor shipment delays have limited revenue recognition. Hardware deliveries that had historically taken 30 to 60 days are now taking more than 200 days in many cases, he said. As a result, the company’s Technology Solutions backlog was 65% higher than it was a year earlier. Dellovo said the delays reflect broader supply constraints tied to demand for components including memory, hard drives and processors amid AI-related infrastructure buildouts. → Ryman Checks Into a $1.38B Hospitality Upgrade Gross profit was $4.3 million, compared with $4.5 million a year earlier. However, gross margin improved to 30.1% of sales from 28.8% in the prior-year quarter. Product gross margin increased to 20.7% from 15.7% a year earlier. Service gross margin was 51.2%, compared with 53.9% in the prior-year period. Research and development expense rose 5% to $832,000, reflecting work on AZT PROTECT customer customizations and OEM integrations. Selling, general and administrative expense increased 3% to $5 million. CFO Gary Levine said the operating loss widened to $1.5 million from $1.2 million in the prior-year quarter, partly due to higher variable compensation in the Technology Solutions division and costs related to the sale of the company’s U.K. pension obligation to an insurance company. → Joby’s Defense Pivot Accelerates With $500M Resonant Sciences Deal Net loss was $846,000, or $0.09 per share, compared with a net loss of $264,000, or $0.03 per share, in the fiscal 2025 third quarter. For the first nine months of fiscal 2026, CSPi reported revenue of $42.4 million, down from $44.3 million a year earlier. Gross profit increased to $13.5 million, or 31.9% of sales, from $13.2 million, or 29.9% of sales. The nine-month net loss was $491,000, or $0.05 per share, compared with net income of $100,000, or $0.01 per diluted share, in the comparable prior-year period. Dellovo said AZT PROTECT’s growth has been constrained by longer sales cycles for larger enterprise opportunities, though the company added customers and expanded deployments at existing accounts during the quarter. CSPi achieved a 100% renewal rate for customer sites reaching their one-year renewal periods, he said. The company is nearing the end of several 18- to 24-month sales cycles involving large six-figure opportunities and expects some may convert into contracts. Dellovo said larger opportunities can require extensive lab testing, internal reviews and alignment among operational technology and information technology stakeholders. CSPi is also seeking to embed AZT PROTECT in original equipment manufacturer products. The company completed integrations with several OEM products during the quarter and said it is seeing a growing pipeline from the segment. Dellovo cited Acronis Software as an example, saying the technical integration is complete and the company expects associated marketing materials and SKUs to be available for a fall launch. During the question-and-answer session, he said Acronis had indicated that full integration could be completed by Oct. 1, after which CSPi expects to resume sales-team education and broader commercial efforts. In South Africa, an OEM partner serving a telecommunications customer is working on a third purchase order involving AZT PROTECT embedded in its deployed solution, Dellovo said. CSPi is also in discussions with three additional U.S. OEMs at different stages of engagement. The company’s cloud and managed services practice continued to grow, supported by customer migration to cloud environments and demand for ongoing operational support, according to Dellovo. During the quarter, CSPi entered the professional sports market with a six-year, seven-figure managed-services agreement with a nationally recognized sports team. The company said it expects to issue a joint press release in coming weeks. It also signed a three-year managed-services agreement with a food distribution customer that is expected to generate mid-six-figure annual recurring revenue. Dellovo said the company is focusing on recurring revenue from managed services, cloud offerings and AZT PROTECT while it continues to manage hardware availability constraints. CSPi ended the quarter with $24.7 million in cash and cash equivalents. Levine said the company extended payment terms on more than 20 customer transactions as of June 30, supported by what he described as a strong balance sheet. The company repurchased approximately 13,000 shares during the quarter and said its board approved a quarterly dividend of $0.03 per share. The dividend is scheduled to be paid Sept. 15, 2026, to shareholders of record as of Aug. 28, 2026. Looking ahead, Dellovo said CSPi is working to maximize its opportunities through the remainder of fiscal 2026 and into fiscal 2027 across both its services operations and AZT PROTECT business. CSP Inc develops and markets IT integration solutions, security products, managed IT services, cloud services, purpose-built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value-added reseller to various customers in web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "CSP Q3 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

AZT PROTECT Performance and High Customer Satisfaction Generates 100% Renewal Rate; TS Order Backlog Continues Year-Over-Year Growth; Recent Surge of Large Cloud-based Services Contracts Combine with AZT PROTECT & TS Opportunities to Drive Fiscal 2027 Optimism Conference Call Today at 10 a.m. ET LOWELL, Mass., Aug. 14, 2026 (GLOBE NEWSWIRE) -- CSP Inc. (NASDAQ: CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, today announced results for the fiscal third quarter ended June 30, 2026. The Company also announced that the Board of Directors declared a quarterly dividend of $0.03 per share payable September 15, 2026, to shareholders of record at the close of business on August 28, 2026. Recent Achievements and Operating Highlights Signed a seven-figure, six-year managed services agreement with a professional sports organization. CRN, a brand of The Channel Company, named CSPi to its 2026 Tech Elite 250 list for the sixth consecutive year. Initiated additional Land and Expand single-site AZT PROTECT engagements and completed product integration with Acronis software. Implemented sales organization modifications to advance Land and Expand and OEM customer opportunities. “Our Technology Solutions (TS) business performed near our expectations during the fiscal third quarter, reflecting solid growth from the Cloud and Managed Services businesses, and despite continued vendor hardware supply issues extending customer delivery lead times,” commented Victor Dellovo, Chief Executive Officer. “While the prolonged across the board vendor hardware delivery delay is likely to continue through the current fiscal fourth quarter and into the first half of fiscal 2027, we believe our increased backlog will enhance our full year 2027 results. Our team is aggressively attacking the delivery date issue to convert orders to sales over the next several months. During the fiscal third quarter, we did generate meaningful progress and signed several new TS customers, including a six-year, seven-figure contract with a professional sports organization, expanding our profile in this lucrative market. “The AZT PROTECT business continued to add new customers and expand sites within existing customers during the third quarter. In addition, we completed the integration of AZT PROTECT into the Acronis Software product offering as well as with several specialized distributors. We have established opportunities to secure larger seven figure agreements through direct sales efforts to OEMs and have modified our sales organization to aggressively address this emerging potential while increasing the effectiveness of our Land-And-Expand strategy. In addition, we have several targets nearing the end of the 18-24 month sales cycle and believe our evolved sales approach maximizes our ability to convert the opportunity into an order. “The market for AZT PROTECT continues to expand as cyberattacks forcing operations to shut down for extended periods of time increase. We believe AZT PROTECT could have been the difference in preventing these shutdowns and its performance is the major driver behind our 100 percent customer renewal rate. Successful sales execution would provide us with a strong tailwind into the new fiscal year. Combined with the new multi-year cloud-based engagements signed during fiscal 2026 and conversion of TS backlog to revenue, we are positioned to enter fiscal 2027 with significant business momentum.” Fiscal 2025 Third Quarter Results Sales for the fiscal third quarter ended June 30, 2026, were $14.4 million compared to sales of $15.4 million for the fiscal third quarter ended June 30, 2025, as the Technology Solutions backlog remained above normal levels due to the well-document equipment shortages impacting the industry. Gross profit margin for the fiscal third quarter ended June 30, 2026, was 30.1% of sales, an increase of over 100 basis points compared to the year ago fiscal third quarter gross margin of 28.8%. The Company reported a net loss of $846,000 or $0.09 per common share for the fiscal third quarter, compared to a net loss of $264,000, or $0.03 per common share for the prior fiscal year third quarter. The Company continues to maintain a strong balance sheet, and as of June 30, 2026, had cash and cash equivalents of $24.7 million, after providing financing to several customers. The strong balance sheet provides the Company with the necessary resources to execute its growth strategies for growing the managed services business and fostering greater market penetration of the AZT PROTECT offering. Fiscal Year 2026 Nine Month Results Sales for the fiscal nine months ended June 30, 2026, was $42.4. million compared with sales of $44.3 million in prior year period. Gross profit for the fiscal nine months ended June 30, 2026, was $13.5 million, or 31.9% of sales compared with $13.2 million, or 29.9% of sales. The Company reported a net loss of $491,000, or $0.05 per share in the fiscal nine months ended June 30, 2026, compared with net income of $100,000, or $0.01 per diluted share for the fiscal nine months ended June 30, 2025. Conference Call Details CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi’s financial results and provide a business update. To listen to a live webcast of the call, the event link is https://www.webcaster5.com/Webcast/Page/2912/54426. Individuals also may listen to the call via telephone, by dialing 973-528-0011 or 888-506-0062 and use the Participant Access Code: 359648 when greeted by the live operator. A replay of the webcast will be available for approximately one year on the CSPi website. About CSPi CSPi (NASDAQ:CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help customers use technology to success. The High Performance Product division, including ARIA Cybersecurity Solutions, recognizes that better, stronger, more effective cybersecurity starts with a smarter approach. ARIA's solutions provide new ways for organizations to protect their most critical assets—they can shield their critical applications from cyberattack with the AZT solution, while monitoring internal traffic, device-level logs, and alert output with our ARIA ADR solution to substantially improve threat detection and surgically disrupt cyberattacks and data exfiltration. Rounding out the portfolio, Aria's AZT Gateway Software allows us to interrogate network packets at 100mbps line-rate to enforce forwarding and capture policies on the fly. Customers in a range of industries rely on our solutions to accelerate incident response, automate breach detection, and protect their most critical assets and applications—no matter where they are stored, used, or accessed. CSPi's Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility. Safe Harbor The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include general economic conditions, market factors, competitive factors and pricing pressures, and others hardware delivery delay is likely to continue through the current fiscal fourth quarter and into the first half of fiscal 2027, we believe our increased backlog will enhance our full year 2027 results described in the Company's filings with the Securities and Exchange Commission (“SEC”). Please refer to the section on forward-looking statements included in the Company's filings with the SEC. Gary LevineCFO978-954-5040

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Technology Solutions revenue was constrained by hardware vendor delivery times extending from historical 30-60 day windows to over 200 days, resulting in a 65% year-over-year increase in backlog. The AZT Protect business is transitioning toward larger enterprise accounts, which involve longer 18-24 month sales cycles due to complex procurement processes and internal stakeholder alignment. Management is pivoting its sales strategy to engage higher-level IT decision-makers earlier, as these stakeholders often control the budgets even when OT teams advocate for the technology. Strategic focus has shifted toward OEM partnerships, such as the Acronis integration, to embed AZT Protect directly into third-party products for long-term recurring revenue. The managed cloud and service practice continues to see healthy growth driven by the increasing complexity of enterprise cloud migrations and demand for post-migration operational support. Operational efficiency in the service segment improved, with service gross margins increasing by 1.3% compared to the prior-year period. Management highlighted that AZT Protect has maintained a 100% renewal rate and zero customer breaches to date, validating the product's efficacy in OT environments. Management expects hardware supply chain constraints to persist for at least another year as large-scale AI infrastructure build-outs continue to consume global component capacity. The Acronis partnership is targeted for a full commercial launch by October 1, 2026, following the completion of software integration and SKU availability. Several large six-figure enterprise opportunities are nearing the end of their 18-24 month sales cycles, with management optimistic about conversions in the coming months. The company is expanding its OEM pipeline with three additional US-based partners and ongoing deployments in the South African telecommunications market. Future growth will prioritize high-margin recurring revenue streams from MSP, cloud services, and AZT Protect to offset volatility in the hardware-dependent Technology Solutions segment. The company completed the buyout and sale of its UK pension plan to an insurance company, incurring one-time actuarial and legal costs of approximately a couple hundred thousand dollars. Operating loss increased to 1.5 million from 1.2 million, partly due to variable compensation in the Technology Solutions division and the UK pension transaction costs. Management identified 'friendly fire' incidents—disruptions caused by internal IT updates in OT environments—as a key market opportunity for AZT Protect's patch-free security model. The company utilized its balance sheet to finance over 20 customer transactions, with long-term receivables reaching 8.3 million as of June 30, 2026. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management stated they do not yet have a specific revenue estimate for the Acronis rollout as the integration process was entirely controlled by the partner's timeline. The partnership was previously on hold because the partner's sales team lacked the necessary SKUs and integrated systems to sell the product globally. CSPi replaced three out of four salespeople to bring in talent accustomed to the longer sales cycles required for enterprise cybersecurity deals. The new strategy emphasizes building trust with resellers to gain direct access to their 'white glove' enterprise accounts. Management confirmed the ban on foreign-made routers is not impacting their business, as they primarily deal with US-based name brands. Current delays are attributed to broad shortages in memory, hard drives, and processors rather than regulatory restrictions. A partnership with UFT has progressed through a nine-month validation phase, including lab testing and successful pilot deployments with three customers. Management teased new joint initiatives with UFT to be announced within the next two to three weeks.

LOWELL, Mass., Aug. 11, 2026 (GLOBE NEWSWIRE) -- CSPi (NASDAQ: CSPI), an award-winning provider of security and packet capture products, managed IT and professional services, and technology solutions, announced that it will issue its fiscal 2026 third quarter financial results before the opening of the market on Friday, August 14, 2026. CSPi President and Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. ET that day to review the financial results and provide a business update. To listen to a live webcast of the call, the event link is https://www.webcaster5.com/Webcast/Page/2912/54426. Individuals also may listen to the call via telephone, by dialing 973-528-0011 or 888-506-0062 and use the Participant Access Code: 359648 when greeted by the live operator. A replay of the webcast will be available for approximately one year on the CSPi website. About CSPi CSPi (NASDAQ: CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help their customers use technology to succeed. The High Performance Product division, including ARIA Cybersecurity Solutions, originated from supporting initiatives for the Department of Defense and Western intelligence agencies related to network monitoring, data protection, and intelligence initiatives. This focused mindset now results in foolproof data protection, enterprise-wide. Our ARIA Software Defined Security solutions set provides enhanced network security, as well as accelerating incident response capabilities, while our Myricom nVoy Series appliances provide automated breach identification and notification, enabled by the 10G dropless packet capture inherent in our Myricom intelligent adapters. CSPi’s Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers has expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility. Contact: Edward [email protected]

Shares of CSP Inc. CSPI have declined 0.4% since the company reported results for the second quarter of fiscal 2026. This performance contrasts with the broader market, as the S&P 500 index posted a 0.4% return over the same period. Over the past month, the CSPI stock has risen 2.6%, while the S&P 500 has gained 7.1%. In the second quarter of fiscal 2026, CSP reported a solid revenue increase of 21.8% to $16 million from $13.1 million in the same quarter last year. The company's product revenues grew 30% to $11.1 million, driven by large customer orders. Service revenues also grew 6.6% to $4.9 million. However, the gross margin for the quarter was slightly impacted by a higher proportion of product revenues. The metric dropped to 27.9% from 32% in the year-ago period. Despite this, CSP achieved net income of $264,000, or 3 cents per share, a significant turnaround from the net loss of $108,000, or 1 cent per share, incurred in the previous year. CSP Inc. price-consensus-eps-surprise-chart | CSP Inc. Quote CSP's operating expenses increased modestly, with research and development expenses rising 7% to $818,000, reflecting the ongoing customization of the AZT PROTECT product. Meanwhile, selling, general and administrative expenses grew 2% to $4.5 million. The company generated a 27.9% gross margin, slightly lower than last year’s 32% due to the higher contribution from product sales, which have lower margins than services. Despite these rising costs, CSP's improved profitability and solid operational execution were highlighted by its continued success in the Technology Solutions division and its expanding service business. CEO Victor Dellovo emphasized CSP's strong fiscal second-quarter performance, particularly in its U.S. Technology Solutions business. The company’s growth was driven by a combination of large customer purchase orders and an uptick in deployments of the AZT PROTECT product. Notably, CSP saw a significant increase in its land and expansion strategy, with more than 10 new AZT PROTECT orders from customers, double the amount secured in second-quarter fiscal 2025. This expansion in customer base is seen as a key growth driver for the company’s future, especially as CSP continues to address the increasing complexity of cybersecurity in operational technology (OT) environments. The increase in product revenues was mainly caused by a large one-time customer purchase order. Service revenues also contributed positively, benefiting from CSP's high customer retention rate and the growing demand for its cloud and managed IT services. However, the company’s gross margin was impacted by the higher proportion of product sales, which typically have lower margins than services. Despite these factors, CSP managed to turn a profit this quarter, underscoring its strategic focus on expanding its service offerings while growing its product portfolio. CSP remains optimistic about the remainder of fiscal 2026. The company is confident in its ability to continue expanding its AZT PROTECT deployments and service business. CEO Dellovo pointed out that CSP’s focus on cybersecurity solutions, particularly the AZT PROTECT system, is positioned to drive growth for the remainder of the fiscal year. CSP also continues to benefit from its strong customer relationships and a growing market awareness of the unique capabilities of its products, especially in the OT space. In the fiscal second quarter, CSP secured a major contract with a global cement manufacturer, deploying AZT PROTECT at more than two dozen U.S. plants. This initial deployment is part of a broader potential deal involving more than 100 plants globally. While CSP has successfully landed this deal in the United States, the real growth opportunity lies in expanding the deployment to international locations. The company is also continuing to engage with strategic OEM partners, including Acronis, to embed its cybersecurity solutions into broader technology platforms, which could unlock significant long-term growth potential. CSP's strong fiscal second-quarter results underscore its ongoing transformation, with a focus on expanding its footprint in both product and service markets, particularly in the cybersecurity and IT services sectors. With a robust product pipeline and a growing number of customer deployments, CSP is well-positioned to continue its growth trajectory throughout fiscal 2026. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CSP Inc. (CSPI): Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Interested in CSP Inc.? Here are five stocks we like better. CSPi returned to growth as product sales rose ~30% and services ~7%, driven by strong demand for AZT PROTECT (more than 10 land‑and‑expand orders, double the prior year) and a three‑year cement agreement covering >2 dozen U.S. sites with an international opportunity of 100+ plants. Q2 financial snapshot: revenue of $16.0 million (vs. $13.1M a year ago), net income of $0.264M ($0.03 per share) aided by a $568k tax benefit, and a cash balance of $23.1M; company announced a $0.03 per‑share dividend and repurchased 15,510 shares. Services momentum continued with managed cloud/managed services up ~11% and service gross margin of 57% (improving >100 bps), supported by high customer retention and a new MSP client contributing nearly six figures in monthly revenue. CSP (NASDAQ:CSPI) executives highlighted a return to growth in the company’s fiscal second quarter of 2026, pointing to strong product demand, rising services momentum and increased activity around its AZT PROTECT operational technology (OT) cybersecurity offering. Chief Executive Officer Victor Dellovo said CSPi “returned to growth” during the quarter as product sales grew 30% and the services business grew 7% versus the prior-year quarter, driven by the company’s U.S. technology solutions business and several large customer purchase orders. → Berkshire Hathaway’s Record Cash Hoard: Why and What's Next? Dellovo said CSPi saw an “appreciable pickup” in AZT PROTECT orders, including more than 10 “land and expand” orders with new customers—double the number signed in the same quarter of fiscal 2025. He described these initial orders as limited deployments used to validate AZT PROTECT within a customer’s existing cybersecurity environment, followed by efforts to expand deployments across additional sites. However, Dellovo said the expansion phase has taken longer than anticipated due to factors such as stakeholder changes, internal review requirements, and additional validation requests from early deployment sites. He also noted that some IT teams initially approach OT security needs through an IT infrastructure lens, requiring further education on OT-specific requirements. → A Prada Payday: Is AMC Back in Style? Despite those timing challenges, Dellovo said CSPi is making progress. He cited AZT PROTECT being deployed at a fourth plant for a major raw material manufacturer, adding that additional plant rollouts have taken less time as the product’s track record builds. He also said other customers that started with a single-site deployment in 2025 are expanding to additional sites. Dellovo pointed to a major “land and expand” relationship signed in April: a three-year agreement covering “more than 2 dozen U.S. sites” for a global cement manufacturer. He said the contract carries a “six-figure annual revenue value” expected to be recorded in fiscal third quarter and noted it took roughly 13 months to finalize. → Insider Sales: Top AST SpaceMobile Insider Cuts Postion Over 30% During the Q&A, Dellovo said the U.S. rollout represents the first phase and that CSPi is in discussions with a “sister company” for sites outside the U.S., describing the international opportunity as “over 100 plants.” He added there is also potential for additional growth in the U.S. footprint. Dellovo also referenced additional customer activity during the quarter, including an agreement in late March with a “leader in the cloud-based commercial content automation service” to deploy AZT within CSPi’s ARIA ADR offering across production infrastructure, and an early March deployment of AZT PROTECT at a “leading pet food producer.” Dellovo said CSPi’s OT-market approach has been helped by increased awareness of threats “generated by AI” and “friendly fire” incidents, where faulty IT updates can disrupt manufacturing environments. He contrasted typical cybersecurity patching approaches with AZT PROTECT’s model, saying “no patches are needed,” and added that “to date, no breaches have occurred” with the product. He also said CSPi is pursuing strategic OEM relationships, “most notably with Acronis,” which is working to embed AZT PROTECT into its platform. Dellovo said CSPi is “hoping to begin generating revenue from the Acronis relationship by the end of the current fiscal year,” while noting such integrations take time to mature. In response to investor questions, Dellovo discussed CSPi’s view that AZT PROTECT faces limited effective competition in certain OT environments, particularly older systems. He said some competitors are “choosing not to continue supporting” older Windows versions, and described AZT PROTECT as lightweight—citing CPU utilization in the “1% to 2%” range and memory usage around “16 meg.” On go-to-market execution, Dellovo said CSPi is leaning heavily on distribution and reseller channels and is “trying not to take anything direct any longer,” with exceptions. He said CSPi has “three major” channel relationships and “probably another six or so smaller resellers or integrators,” estimating roughly 10 in total. He added that deal flow is “distributed all over the place,” with varying levels of activity across partners. Dellovo also described a shift toward “paid POCs,” where customers purchase a starter kit—such as “one trust center” and “five or ten licenses”—to establish mutual commitment beyond a no-cost trial. Dellovo said CSPi’s managed cloud and managed service practice grew 11% over the prior-year comparable period, benefiting from ongoing enterprise cloud migrations and rising demand for operational support after migrations are complete. He noted the growing complexity of cloud environments and the unique needs of different enterprises as key market drivers. He also said CSPi signed a new managed services provider (MSP) customer in fiscal first quarter generating “nearly six figures in monthly revenue” that began contributing during the second quarter. Dellovo added that a top 15 U.S. landscaping company is engaging CSPi for comprehensive managed services. According to Dellovo, customer retention in services remains “extremely high,” supporting gross margin expansion in that segment. He said service gross margins increased more than 100 basis points year over year during the quarter. Chief Financial Officer Gary Levine reported revenue of $16.0 million for the fiscal second quarter ended March 31, 2026, compared with $13.1 million in the year-ago quarter. Levine said product revenue increased 30% to $11.1 million, primarily due to a “large one-time purchase order,” while service revenue grew 6.6% to $4.9 million. Gross profit increased to $4.5 million from $4.2 million a year earlier. Gross margin was 28% versus 32% in the prior-year quarter, reflecting product gross margin of 15% (down from 18%) and service gross margin of 57% (up from 55%). Levine said research and development expense rose 7% to $818,000 as CSPi supported customization of AZT PROTECT deployments and OEM embedded developments. Selling, general and administrative expense increased 2% to $4.5 million. Levine also noted interest income rose 27.9% due to increased financing transactions with customers. The company recorded a tax benefit of $568,000, “primarily from excess tax benefit from restricted stock awards vested during the second quarter,” resulting in net income of $264,000, or $0.03 per share, compared to a net loss of $108,000, or $0.01 per share, in the prior-year quarter. Levine said CSPi’s balance sheet has enabled it to finance customer purchase orders; as of March 31, the company had extended terms on “over 30 transactions.” CSPi ended the quarter with $23.1 million in cash and cash equivalents. Levine said the company plans to pay a $0.03 per share dividend on June 15, 2026, to shareholders of record on May 21, 2026, and noted that CSPi repurchased 15,510 shares of common stock during the quarter. For the first six months of fiscal 2026, Levine reported revenue of $28.0 million versus $28.8 million in the same prior-year period. Gross profit was $9.2 million, or 33% of sales, compared to $8.8 million, or 30% of sales. Net income for the six-month period was $355,000, or $0.04 per share, compared to $364,000, or $0.04 per share, in the prior-year period. In closing remarks, Dellovo said CSPi made “solid progress” in the quarter and is “aggressively pursuing” opportunities for the remainder of fiscal 2026 across both services and AZT PROTECT, with the company planning to update investors again in August. CSP Inc develops and markets IT integration solutions, security products, managed IT services, cloud services, purpose-built network adapters, and cluster computer systems for commercial and defense customers worldwide. It operates in two segments, Technology Solutions and High Performance Products. The Technology Solutions segment provides third-party computer hardware and software as a value-added reseller to various customers in web and infrastructure hosting, education, telecommunications, healthcare services, distribution, financial and professional services, and manufacturing industries. The article "CSP Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for May 2026.

Returned to top-line growth driven by a 30% increase in product sales and a 7% rise in service business, primarily through the U.S. Technology Solutions segment. Doubled AZT Protect orders compared to the prior year, utilizing a 'land-and-expand' strategy where initial single-site tests validate the product's integration with existing cybersecurity infrastructure. Attributed the slower-than-anticipated expansion phase to evolving stakeholder alignment, internal customer review requirements, and the need to re-engage teams following personnel changes. Identified a significant market opportunity in providing education on the distinct security requirements of OT environments versus traditional IT infrastructure. Leveraged the 'friendly fire' narrative, where IT updates mistakenly disrupt OT production, to position AZT Protect's patch-free methodology as a superior alternative to traditional solutions. Maintained high customer retention and expanded service gross margins by 100 basis points through best-in-class managed cloud and operational support services. Shifted the sales model toward 'paid POCs' to ensure customer commitment and reduce the time spent on non-committal 'tire-kicking' evaluations. Anticipates fiscal 2026 will be a growth year, supported by sustained momentum in the service segment and a growing pipeline of AZT Protect deployments. Expects to begin generating revenue from the Acronis OEM relationship by the end of the current fiscal year as the integration of AZT Protect into their platform matures. Targets the expansion of a major cement manufacturer contract from two dozen U.S. sites to over 100 global locations, leveraging established IT team approval to shorten future sales cycles. Focuses on transitioning to a channel-heavy sales model, leaning on approximately 10 major and minor resellers to evangelize the product and leverage existing long-term customer relationships. Aims to further shrink the time between initial land-and-expand phases by utilizing successful track records at existing plants to bypass repetitive validation steps. Recorded a $568,000 tax benefit primarily from excess tax benefits related to restricted stock awards, which enabled the company to report a net profit for the quarter. Product gross margins decreased to 15% from 18% due to a large one-time purchase order completed for a customer during the period. Increased R&D spending by 7% to $818,000 to support the customization of AZT Protect for specific customer deployments and OEM embedded developments. Utilized a strong balance sheet to finance customer purchase orders, extending terms on over 30 transactions, and finished the quarter with a cash position of $23.1 million. Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management estimated that customers save approximately $1,000 per plant per month by reducing patching spend and extending the life of legacy assets by 12 to 24 months. Strategic value is also derived from avoiding production downtime, as replacing entire systems is a lengthy process that halts revenue generation. AZT Protect is specifically designed for older systems like Windows XP or Windows 7 that competitors no longer support or that cannot handle CPU-intensive modern security software. The solution maintains a very small footprint, utilizing only 1% to 2% of CPU and 16 MB of memory, making it viable for resource-constrained OT endpoints. New board member Jim brings extensive OT industry contacts and a background in large-scale pharmaceutical evaluations of the company's products. His presence is intended to assist with market strategy and provide high-level testimonials to major manufacturers like Emerson, Siemens, and Honeywell. The current three-year agreement covers U.S. sites under a specific budget, but the company is in advanced talks with a sister organization for over 100 international plants. Management believes the global deal could be an 'all-or-nothing' master agreement rather than a site-by-site rollout. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here.

Rising Initial AZT PROTECT Site Deployments Generating System-wide Opportunities to Support Longer Term Growth; Recent Q3 AZT PROTECT Engagements, Technology Solutions Momentum & Continued Services Growth Enhances Second Half Growth Potential Conference Call Today at 10 a.m. ET LOWELL, MA / ACCESS Newswire / May 7, 2026 / CSP Inc. (NASDAQ:CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, today announced 21.8% revenue growth and profitability for the fiscal second quarter ended March 31, 2026. The Company also reported the Board of Directors declared a quarterly dividend of $0.03 per share payable June 15, 2026, to shareholders of record at the close of business on May 21, 2026. Recent Achievements and Operating Highlights Key customer order fulfillment drove second quarter product revenue growth; similar opportunities are being pursued during the second half of the fiscal year. In April, deployed AZT PROTECT to more than two dozen sites of global cement manufacturer; customer evaluating AZT PROTECT for sites outside the U.S. Increased pace of Land and Expand single-site AZT PROTECT engagements creating expanded opportunities for customer deployments in the second half of the fiscal year. "We had a solid quarter as revenue increased over 21% lead by our U.S. Technology Solutions business, and we have carried this business momentum into the first month of our fiscal third quarter," commented Victor Dellovo, Chief Executive Officer. "As a result of our second quarter, and current trends, we believe we could achieve full year growth compared to fiscal 2025. Our TS business continues to lead our progress, and a primary factor behind this market driver has been the growing complexity of the cloud and the unique and specific needs of each enterprise. At the same time, our services business continued to grow due to our best-in-class service and extremely high customer retention rate, which contributes to realizing higher gross margins within the service segment. "We are generating positive trends with the AZT PROTECT offering and continue to execute an increasingly successful land and expand strategy to leverage the market opportunity for our unique cyber-security solutions. During the quarter we doubled the number of new initial site customers over the prior year period. At the beginning of the third quarter, we added a new customer who is deploying AZT at more than two dozen manufacturing sites around the U.S. We continue to work with our strategic partners and distributors on additional multi-site deployments across key markets, including steel, energy, manufacturing, water utilities, pharmaceutical, food, and telecommunications industries. "Half-way through our fiscal year, we are where we expected to be and are on track to generate growth during the second half of the year. Our cloud and managed services business will remain the drivers of our growth, with AZT PROTECT positioned to make a growing contribution." Fiscal 2026 Second Quarter Results Revenue for the fiscal second quarter ended March 31, 2026, was $16.0 million compared to revenue of $13.1 million for the fiscal second quarter ended March 31, 2025. Product revenue grew 30% to $11.1 million while service revenue grew 6.6% to $4.9 million. Gross profit for the three months ended March 31, 2026, increased slightly to $4.5 million compared to $4.2 million. Gross margin for the fiscal second quarter ended March 31, 2026, was 27.9% of sales compared to the year ago fiscal second quarter gross margin of 32%, due to the higher proportion of product revenue. After recording a income tax benefit for the quarter of $568,000, the Company generated net income of $264,000, or $0.03 per share. During the prior year quarter, the Company reported an income tax benefit of $683,000 and a net loss of $(108,000), or $(0.01) per share. The Company's balance sheet remained robust, and as of March 31, 2026, had cash and cash equivalents of $23.1 million, after providing financing to several customers. The strong balance sheet continues to provide the Company with the necessary resources to execute its growth strategies for growing the managed services business and building AZT PROTECT deployments. Fiscal Year 2026 Six Month Results Revenue for the fiscal six months ended March 31, 2026, was $28.0 million compared with revenue of $28.8 million in prior year period. Gross profit for the fiscal six months ended March 31, 2026, was $9.2 million, or 32.8% of sales compared with $8.8 million, or 30.4% of sales. The Company reported net income of $355,000, or $0.04 per share in the fiscal six months ended March 31, 2026, compared with net income of $364,000, or $0.04 per share for the fiscal six months ended March 31, 2025. Conference Call Details CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi's financial results and provide a business update. To listen to a live webcast of the call, the event l https://www.webcaster5.com/Webcast/Page/2912/53998. Individuals also may listen to the call via telephone, by dialing 973-528-0016 or 877-545-0523 and use the Participant Access Code: 867325 when greeted by the live operator. A replay of the webcast will be available for approximately one year on the CSPi website. About CSPi CSPi (NASDAQ:CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help customers use technology to success. The High Performance Product division, including ARIA Cybersecurity Solutions, recognizes that better, stronger, more effective cybersecurity starts with a smarter approach. ARIA's solutions provide new ways for organizations to protect their most critical assets-they can shield their critical applications from cyberattack with the AZT solution, while monitoring internal traffic, device-level logs, and alert output with our ARIA ADR solution to substantially improve threat detection and surgically disrupt cyberattacks and data exfiltration. Rounding out the portfolio, Aria's AZT Gateway Software allows us to interrogate network packets at 100mbps line-rate to enforce forwarding and capture policies on the fly. Customers in a range of industries rely on our solutions to accelerate incident response, automate breach detection, and protect their most critical assets and applications-no matter where they are stored, used, or accessed. CSPi's Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24ￗ365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility. Safe Harbor The Company cautions that numerous factors could cause actual results to differ materially from forward-looking statements made by the Company. Such risks include current trends, we believe we could achieve full year growth compared to fiscal 2025, we are where we expected to be and are on track to generate growth during the second half of the year and our cloud and managed services business will remain the drivers of our growth, with AZT PROTECT positioned to make making a growing contribution." Please refer to the section on forward-looking statements included in the Company's filings with the SEC. CSP INC. AND SUBSIDIARIES CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS (Amounts in thousands) CSP INC. AND SUBSIDIARIES CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS (Amounts in thousands, except per share data) CONTACT: CSP Inc. Gary Levine, 978-954-5040 Chief Financial Officer SOURCE: CSP Inc. View the original press release on ACCESS Newswire