SideChannel Inc (OTCPK:SDCH)

Q3 2026 SideChannel Inc Earnings Call Transcript

Aug 12, 2026 / 08:30 PM GMT

Release Date Price: $1.88 (+13.94%)

Transcript 10-Q

Key Points

Positve

SideChannel Inc (SDCH) reported its first quarter of year-over-year revenue growth in five quarters, with revenue up 1.2% to $1.8 million.
Gross margin expanded significantly by 790 basis points to 54.9%, driven by a higher mix of Enclave software and improved delivery team utilization.
The company cut its quarterly net loss roughly in half to $134,000, and generated positive cash flow from operations for the quarter, increasing cash sequentially.
Cybersecurity software and services revenue now represents 51.6% of total revenue, surpassing VCSO for the first time, reflecting a successful strategic shift.
Trailing 12-month revenue retention improved to 68.2% from 63.6% at the end of September, with gains in both VCSO and software/services segments.
Operating expenses were essentially flat year-over-year, reversing the prior trend of significant growth, and the company has no debt.

Negative

SideChannel Inc (SDCH) continues to face a going concern disclosure, with substantial doubt about its ability to continue as a going concern not alleviated.
The company ended the quarter with only $326,000 in cash and net working capital of approximately $15,000, highlighting a thin balance sheet.
Nine-month revenue is down 7.7% to $5.1 million, and the net loss widened to $974,000 from $510,000 in the prior year period.
New VCSO client acquisition dropped significantly, with new logos contributing $486,000 this year versus $1.2 million last year, indicating a demand generation and sales capacity problem.
The company spent an additional $506,000 on selling and marketing over nine months, yet revenue declined, with management acknowledging that some of that spend did not yield returns.
To operate for the next 12 months, SideChannel Inc (SDCH) must raise additional capital or significantly reduce its product offering and cost structure, neither of which has been completed.

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

SDCH.PK - SideChannel Inc
Q3 2026 SideChannel Inc Earnings Call
Aug 12, 2026 / 08:30PM GMT

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Presentation
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Unidentified_1 [1]
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Greetings. Welcome to the Side Channel Fiscal Year 2026 Q3 Financial Results Update. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press *0 on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Brian Hoagley, Chief Executive Officer. You may begin.

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Unidentified_2 [2]
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Hey, thanks for everybody for joining. I'm Brian Hoagly, CEO of Side Channel.

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