Significant Gross Margin Expansion
Consolidated gross margin expanded to approximately 35% in Q1 2026, up from ~21% in Q1 2025 (+14 percentage points YoY) and up from ~18% in Q4 2025 (+17 percentage points sequential). Consolidated gross profit rose to ~$3.4M (from ~$2.9M YoY, +17.2%).
Substantial Reduction in Operating Loss
Operating loss improved to approximately $1.1M in Q1 2026, versus ~$2.1M in the prior year period (improvement of ~$1.0M, -47.6% YoY) and versus ~$2.8M in Q4 2025 (-60.7% sequential).
Healthcare Segment Turned Profitable
Healthcare operations generated positive segment operating income of approximately $24k in Q1 2026, a swing from a segment operating loss of ~$1.2M in Q4 2025 and ~ $0.9M loss in the prior year period, validating turnaround efforts in the segment.
Pharmacy Margin and Contract Momentum
Pharmacy gross margin improved to ~39% in Q1 2026 versus ~20% in the prior year (improvement of ~19 percentage points). Pharmacy contract revenue grew to ~$1.9M (from ~$1.4M YoY, +35.7% YoY; and from ~$1.6M in Q4 2025, +18.8% sequential).
E-commerce Stability and International Demand
E‑commerce revenue was approximately $3.2M in Q1 2026, up ~6.7% YoY from ~$3.0M. Sales were generated across customers in 130+ countries with record highs in IoT sales and recurring revenue and several European government/military orders building a multiyear pipeline.
Operational Cost Discipline
Total operating expenses decreased to ~$4.5M in Q1 2026 versus ~$4.9M YoY (-8.2%) and versus ~$5.3M in Q4 2025 (-15.1%). Salaries and wages fell to ~$2.4M (down ~11.1% YoY and ~14.3% sequential).
Healthy Liquidity and Balance Sheet Flexibility
Ended the quarter with approximately $11M in cash and ~$14M in working capital, with no meaningful debt. Management established an ATM program to provide optional capital flexibility for potential growth or M&A (no immediate plans to access).
New Customer Wins and Fulfillment Volume
Secured five new 340B pharmacy service agreements in a single quarter (company record) currently onboarding (~90 days to start contributing) and filled an average of ~7,500 prescriptions per month for contract facilities in Florida, driving recurring service fees and margin improvements.