Sep 9, 2026 earnings call — AI and sovereignty drive government growth
Revenue was $109 million, up 12% year over year.
Revenue $0.1B (est $0.1B) · EPS $0.15 (est $0.09)
Key quotes
"That is why AI and sovereignty are now the center of customer discussions."
"Profitability expanded significantly faster than revenue, reflecting the leverage we have built into the model."
"We are on target to achieve $20 million of signed deals in The US this year."
Analyst Q&A 3
US federal contract timing and RPO
Q (Eric Martinuzzi · Lake Street): Are the U.S. federal pipeline transactions expected to be awarded in the current government fiscal year ending September 30? Also, why did the $470 million RPO fall and should we expect it to trough and recover?
A: They expect some U.S. federal deals to be awarded in the current fiscal year. Management said demand is very strong and customers are shifting to subscription, which improves quality but shifts reported RPO; the cancelable portion was about $42 million at the end of Q2 and consumption of a large multiyear contract reduced RPO by about $30 million this quarter. Renewals are not included in RPO until contractually committed, and they said they have about 85% coverage for the next 12 months of revenues and remain confident in the outlook.
"And as David mentioned before, it is about 85% coverage for the next 12 months revenues, and we remain confident in our outlook for this year and also our fiscal 2028 target." — Elad Sharon (CEO)
Bookings vs revenue guide and cash flow
Q (Taz Kajolgi · Roth Capital): Why do CRPO/contract bookings look stronger than the revenue growth guide? Also, any update on full-year operating cash flow given inventory and subscription shifts, and are you still on track for the $20 million U.S. bookings for fiscal year?
A: Management said they are comfortable with the revenue guidance and see strong demand while the business mix shifts to more subscription and software, which improves revenue quality. They said Q2 operating cash flow was strong year-over-year but they deliberately increased inventory now to support customer delivery and avoid supply disruptions, which affects near-term cash flow. They also said they remain on track to sign about $20 million in U.S. deals this fiscal year.
"And we are feeling comfortable with the guidance, and if we need to update, we will be more than happy to do it." — David Abadi (CFO)
Inventory buying and subscription effect
Q (Matthew Calitri · Needham and Company): How should we think about the cash flow impact of the higher inventory purchases? And how much would growth differ if revenue recognition had not shifted toward subscription?
A: They said they are increasing inventory to meet growing demand and to guard against longer delivery times and higher prices in the supply environment, and they will increase inventory cautiously to balance cost and delivery. They also said they cannot yet quantify the exact cash flow impact of the incremental inventory but expect overall operating cash flow to be significant and positive. On subscription, they said if the mix had not shifted toward subscription they would see a few percentage points higher reported growth, while noting subscription improves predictability and profitability.
"we want to be in a position that we are able to fulfill the demand, the growing demand of the customer." — Elad Sharon (CEO)