SideChannel Inc (OTCPK:SDCH)

Q2 2026 SideChannel Inc Earnings Call Transcript

May 12, 2026 / 08:30 PM GMT

Release Date Price: $2

Transcript 10-Q8-K

Key Points

Positve

Gross margin expanded by 380 basis points from 49.7% to 53.5%, indicating improved operational leverage.
The software and services category, including Enclaves, grew 12.5% year-over-year, showcasing growth in core product offerings.
The transition to a platform model is expected to increase margins significantly, with Phase 2 targeting a 65% margin and Phase 3 aiming for 64% to 75%.
Enclave, the company's core product, offers significant operational benefits such as real-time asset visibility and micro-segmentation, appealing to mid-market customers.
The company is seeing positive momentum in channel growth, with MSP and MSSP partners actively embedding Enclaves and co-selling vCISO services.

Negative

Total revenue declined by 11.9% year-over-year, from $1.89 million to $1.58 million.
vCISO services revenue fell by 28.4% year-over-year, reflecting a contracted pipeline and transition challenges.
The company reported a loss of $840,000 on revenue of $3.35 million for the first six months of the fiscal year.
Cash burn from operations was negative $854,000, indicating financial strain during the transition.
The company faced challenges with sales execution, attributed to bad sales hires who did not understand or execute the business model effectively.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

SDCH.PK - SideChannel Inc
Q2 2026 SideChannel Inc Earnings Call
May 12, 2026 / 08:30PM GMT

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Presentation
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Unidentified_1 [1]
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Greetings, and welcome to the Side Channel Fiscal Year 2026 Second Financial. Or second quarter financial results update call.

At this time, all participants are on listen-only mode, and a question-and-answer session will follow the formal presentation.

If anyone should require operatory assistance during a conference, please press *0 on your telephone keypad.

And please note, this conference is being recorded.

I will now turn the conference over to your host, Mr. Brian Hoagley, Chief Executive Officer with Side Channel. Sir, the floor is yours.

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Unidentified_2 [2]
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