CLOUDASTRUCTURE, INC. Q1 FY2026 earnings call

• Market & Company Positioning

  • The global security market is shifting from reactive incident recording to proactive threat prevention, with 1 billion existing security cameras worldwide creating a large untapped opportunity for Cloudastructure's AI-powered proactive platform
  • The company's platform combines AI-driven video analytics, cloud infrastructure, and human-in-the-loop remote guarding to achieve a 98% real-time threat deterrence rate, 96% AI detection accuracy, and less than 1% of incidents requiring emergency service escalation
  • Key performance metrics: 100% customer satisfaction score, 100+ net promoter score, 99% customer retention

• Customer & Vertical Expansion

  • Multifamily housing remains the strongest core vertical, with contracts secured with 6 of the 10 largest US property management companies; customers are shifting from initial single-site trials to full multi-site/portfolio rollouts, driving faster growth
  • The company is expanding into new high-potential verticals including construction, logistics/transportation, distributed infrastructure, and commercial properties, leveraging new hardware solutions designed for remote/off-grid locations

• Product Development

  • Launched new offerings in 2025: mobile surveillance trailers, rapid deployment security enclosures, and solar-powered monitoring systems for off-grid environments, enabling deployment at locations without traditional infrastructure
  • Maintains a unified, hardware-agnostic platform that allows customers to integrate multiple existing camera and security systems into a single centralized monitoring environment

• Operational Scale

  • In 2025, the platform processed approximately 11.2 million alerts and supported over 112,000 live verbal interventions; it currently processes roughly 9 million videos per day, with sufficient backend capacity to support projected 2026 growth

• Financial Overview

  • Full year 2025 gross profit grew 304% YoY to $1.5 million, demonstrating model scalability
  • Operating expenses totaled $9.7 million (up from $6.6 million in 2024) driven by investments in product development, sales and marketing, and public company infrastructure
  • Net loss for 2025 was $8.5 million (55 cents per share), up from $6.5 million (45 cents per share) in 2024, reflecting ongoing growth investments; EBITDA was negative $5.5 million for 2025
  • Ended 2025 with $8.5 million in cash, $8.6 million in working capital, and a debt-free balance sheet, providing a strong financial foundation for growth

For full year 2025, Cloudastructure's total revenue grew 271% year-over-year to $5.1 million. All product segments delivered double-digit to triple-digit revenue growth:

• Cloud video surveillance: Revenue increased 137% YoY, contributes core high-margin recurring revenue
• Remote guarding: Revenue grew 150% YoY, is a layered add-on service to the core surveillance offering
• Hardware: Revenue increased 329% YoY, includes new offerings like mobile surveillance trailers and solar-powered enclosures
• Other revenue (including installation and additional subscription services): Revenue grew 410% YoY, one-time revenue that precedes future recurring revenue

• The company did not release specific public numerical guidance for 2026, but confirmed internal strong growth targets for the year, following 2025's 271% total revenue growth and 100% ARR growth
• Monthly new location deployment capacity is expected to increase by 50% by the second half of 2026, from the historical rate of ~20 new deployments per month, supported by expanded third-party installation partner networks
• Gross margins are expected to continue expanding gradually in 2026 as recurring revenue scales; temporary slower margin expansion is expected as the company prioritizes new customer acquisition and new installations (the lowest margin business segment) to drive long-term growth
• Directionally, cash burn is expected to continue decreasing over the course of 2026, as revenue growth outpaces increased investment spending
• Historically, the company experiences seasonality with weaker first half performance and stronger second half performance, driven by annual customer budget cycles and end-of-fiscal-year contract execution in Q4; Q1 2026 is expected to be a relatively light quarter

• All forward-looking statements are subject to inherent risks and uncertainties that could cause actual results to differ materially from expectations, as detailed in the company's SEC filings, including the 2025 Form 10-K
• The company is currently in an investment-driven growth stage, so near-term profitability is not expected as it prioritizes scaling customer acquisition and market penetration
• Growth depends on the company's ability to scale installation capacity and backend infrastructure to meet rising demand, though management has stated it is actively expanding capacity to match projected growth

Q: Jack Vanderaarde (Maxim Group) asked for the current count of active locations, an assessment of future multifamily growth potential, and the company's current deployment capacity. / A: Cloudastructure currently has over 150 active locations, and its six top 10 multifamily partners manage over 1.2 million total housing units, representing massive untapped growth opportunity. The historical deployment rate of ~20 new locations per month is expected to increase by 50% by H2 2026, driven by expanded pre-sales capabilities and third-party installation partner networks. Backend infrastructure already processes 9 million videos daily and has sufficient capacity for projected 2026 growth. Multifamily will remain a core vertical, with new customers increasingly requesting full portfolio deployments rather than incremental single-site adds.

Q: Vanderaarde asked for confirmation of year-end 2025 ARR, and trends for ASP and attach rates for core surveillance and remote guarding. / A: Year-end 2025 ARR is confirmed to be over $2 million, up from under $1 million at the start of 2025, with strong growth projected to continue. The base ASP for cloud surveillance is $35 per camera per month, and $79 per camera per month for remote guarding, which layers seamlessly on the core platform. As customers see the results of the solution, they frequently add more guarded cameras over time, lifting ASP and attach rates incrementally.

Q: Vanderaarde asked which new verticals outside multifamily management is most excited about, and customer awareness levels. / A: The two most exciting high-potential new verticals are transportation/logistics and commercial properties. In logistics, the company's solution addresses high cargo theft rates at secure truck yards and package security for delivery companies. In commercial properties, it provides exterior safety after dark for employees and facilities. Customer awareness is growing rapidly following proven results in multifamily, with roughly half of new leads now coming inbound to the company.

Q: James Kistner (Water Tower Research) asked about seasonality, the link between installation revenue and future recurring revenue, and 2026 sales and marketing investment plans. / A: The company has consistent seasonality with a slower first half and stronger second half, driven by customer annual budget cycles and end-of-year contract execution, so Q1 is expected to be light. Installation revenue is a leading indicator of future recurring revenue, as recurring revenue starts immediately after installation is completed, building steadily over the contract term. Sequential Q4 2025 sales and marketing expense was slightly lower due to fewer holiday conferences and travel, but 2026 will see increased investment in sales infrastructure and additional experienced sales reps.

Q: Ellen Litczak (Force Capital) asked about the path to margin expansion and profitability as revenue scales. / A: Gross margins expanded significantly from 2024 to 2025, and gradual expansion is expected to continue in 2026. Management is prioritizing new customer acquisitions and new installations (the lowest margin segment) to grow the overall business long-term, so margin expansion will proceed slowly rather than quickly. As recurring revenue builds over time, margins will widen, and the company is focused on building a large sustainable profitable business while being good stewards of shareholder cash.