ConnectM CEO Letter to Shareholders: Profitable Core Platforms, $12.8 Million Second-Quarter Net Income, $16 Million Stockholder Equity

ConnectM has turned profitable, rebuilt equity by about $40 million, and is reshaping its portfolio around profitable AI-enabled energy and logistics platforms.

Rhea-AI Summary

ConnectM (CNTM) reported its first profitable quarter since listing, with second-quarter 2026 net income of $12.8 million and a rebuilt equity base.

Revenue in Q2 2026 grew 24% year-over-year to $9.8 million, with energy infrastructure platforms contributing $7.5 million, or 76% of revenue, and generating positive income from operations. The quarter’s net income includes a $19.1 million gain on the divestiture of India operations, net of a $4.9 million tax reserve that is expected to be remeasured in the third quarter.

Stockholders’ equity improved from a $23.8 million deficit at December 31, 2024, to $15.8 million at June 30, 2026, helped by exchanging India operations and a land asset for a 17.3% stake in Blue Cloud Softech Solutions, carried at $33.7 million. SG&A fell from 81% to 55% of revenue year-over-year, Keen Labs and logistics operations both generated positive segment income, and the company is retiring legacy SPAC-era debt while its common stock listing application on a national securities exchange is pending.

Positive

• Q2 2026 revenue $9.8 million, up 24% year-over-year
• Q2 2026 net income $12.8 million versus $7.0 million net loss a year earlier
• Energy infrastructure platforms $7.5 million revenue (76% of total) with positive operating income in Q2 2026
• Stockholders’ equity improved from a $23.8 million deficit (12/31/2024) to $15.8 million (6/30/2026), about a $40 million swing
• Blue Cloud stake carried at $33.7 million, exceeding ConnectM’s recent market capitalization
• SG&A ratio reduced from 81% to 55% of revenue year-over-year in Q2 2026
• Keen Labs revenue $3.9 million with positive operating income in its second full quarter of product shipments
• Logistics revenue grew from $4.3 million in 2024 to $12.0 million in 2025, with positive segment income from operations
• Debt reduction more than $10 million of debt and derivative liabilities retired during 2025

Negative

• Consolidated loss from operations remained at $2.9 million in Q2 2026, despite profitable platforms
• Q2 2026 gross margin declined from 36.5% to 28.6% year-over-year due to exiting higher-margin but unprofitable businesses
• Q2 2026 net income includes a one-time $19.1 million gain on India divestiture, net of a $4.9 million tax reserve
• Remaining debt approximately $20 million of debt and convertible notes outstanding, much of it short-term and expensive
• Blue Cloud shares locked up until February 2027 under Indian securities regulations, limiting near-term liquidity
• Listing uncertainty national securities exchange application may not be approved, and listing is not assured

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Two U.S. platforms at the intersection of AI and physical infrastructure; 24% revenue growth with both platforms generating positive operating income; $33.7 million Blue Cloud stake exceeds the Company’s recent market capitalization; legacy SPAC-era financing being retired; application pending to list on a national securities exchange

MARLBOROUGH, Mass., Sept. 09, 2026 (GLOBE NEWSWIRE) -- ConnectM Technology Solutions, Inc. (OTCQX: CNTM) (“ConnectM” or the “Company”), a U.S.-based technology company that develops, sells and operates energy infrastructure powering the physical layer of the AI economy, today issued the following letter to shareholders from Bhaskar Panigrahi, Chairman and Chief Executive Officer. The letter, together with a video discussion of the Company’s strategy, is available at www.connectm.com.

Recent Key Achievements

• Profitable energy infrastructure platform. Second-quarter 2026 revenue grew 24% year-over-year to $9.8 million, with the energy infrastructure platforms generating 76% of revenue and producing positive income from operations.
• First profitable quarter since listing. Net income of $12.8 million, or $2.32 per share, in the second quarter, compared with a net loss of $7.0 million a year earlier; results include a $19.1 million gain on the India divestiture, net of a $4.9 million tax reserve expected to be remeasured in the third quarter.
• $40 million equity turnaround. Stockholders’ equity increased to $15.8 million at June 30, 2026, from a deficit of $23.8 million at December 31, 2024.
• $33.7 million Blue Cloud stake exceeds ConnectM’s recent market capitalization. Exchanged India operations, which contributed about 6% of 2025 revenue, along with an India-based land asset for an approximately 17.3% stake in BSE-listed Blue Cloud Softech Solutions with an implied value at signing of $39.6 million, more than ConnectM’s entire market capitalization at the time; the position is carried at $33.7 million.
• Proprietary AI and data platform. More than 30 gigabytes of operating and performance data per day across more than 120,000 connected assets, with 12 patents held or pending, powering both platforms.
• Cost structure reset. SG&A fell to 55% of revenue in the second quarter from 81% a year earlier, and loss from operations narrowed to $2.9 million from $3.5 million.
• Keen Labs and Sun Solar delivering. Keen Labs, the Company’s AI and technology subsidiary, produced $3.9 million of revenue with positive operating income in its second full quarter of product shipments; the 40% interest in Sun Solar contributed approximately $0.7 million of equity-method earnings in the first half.
• Promoted to the OTCQX with a tight share count. Migrated from the OTC Expert Market to the OTCQX Best Market in under a year, with an application now pending to list on a national securities exchange, and with only 5.7 million shares outstanding.
• New government, defense and commercial field-service channels. Entered the government and defense market through the acquisition of Harry Kahn Associates, an 80-year Department of Defense supplier, and appointed 35-year federal contracting executive Dan McGrath as its CEO; extended the logistics platform into commercial field service with a 60% interest in Blue Ribbon Ice.
  

Dear Fellow Shareholders,

ConnectM today is a company with two profitable operating platforms, a repaired balance sheet, $15.8 million of stockholders’ equity, 5.7 million shares outstanding, and an application pending to list our common stock on a national securities exchange. Fourteen months ago, our shares had just been relegated to the OTC Expert Market, the lowest tier of the over-the-counter marketplace, and we were working our way out of a stockholders’ deficit that stood at $23.8 million at the end of 2024. I am writing to tell you what changed, why it changed, and what to expect next.

To be clear, ConnectM did not fail as an operating business and then recover. The problem was never the business; it was the structure we inherited when we went public in July 2024 through a SPAC in which more than 99% of the trust was redeemed, leaving the Company with a large stockholders’ deficit, transaction obligations we had not incurred as operators, and almost no public float. That structure could not satisfy the exchange’s continued listing standards, and we were not given time to fix it. The Nasdaq delisting was a structural event, and our response was a structural rebuild. That rebuild is now substantially complete, and we believe the company emerging from it is stronger, simpler and more focused than the one that listed on Nasdaq in 2024.

Very few micro-cap companies make the transition to a durable, profitable small-cap company and those that do tend to share a handful of characteristics. I believe ConnectM now has each of them, and I want you to be able to verify that for yourselves against our public filings rather than take my word for it.

The core energy infrastructure business is profitable today.

Second-quarter 2026 revenue grew 24% year-over-year to $9.8 million, and it did so while we were deliberately shedding businesses. Our core energy infrastructure platforms contributed $7.5 million, or 76% of revenue, and produced positive income from operations. Energy Infrastructure platform revenue accelerated sequentially from the first quarter.

We also reported net income of $12.8 million, or $2.32 per share, for the second quarter of 2026, our first profitable quarter since becoming a public company, and I want to be direct about that figure: it includes a $19.1 million gain on the divestiture of our India operations, net of a $4.9 million tax reserve that we expect to remeasure in the third quarter. The headline number is a product of the rebuild, while the segment numbers underneath it are a product of the business, and those are the ones I ask you to watch.

The cost structure has been reset as well: SG&A in the second quarter was 16% lower than a year ago, and as a percentage of revenue it fell from 81% to 55%. Loss from operations narrowed to $2.9 million from $3.5 million a year earlier. The gap between two platforms that earn money and a consolidated operating loss is corporate cost sitting above the platforms, plus the businesses we exited in the first half, and we expect both to keep coming down as they roll off the comparison.

Over the past year we exited or wound down businesses that were not earning their cost of capital, including several Owned Service Network units, our Managed Solutions segment and our India transportation and distributed-energy operations, and we are exploring the divestiture of our remaining Owned Service Network operations. Those businesses carried higher gross margins than our energy infrastructure business, which is why our consolidated gross margin has moved from 36.5% to 28.6%, but they lost money at the operating level. Scale still matters to us, but we intend to build it from a base that earns money, in the energy infrastructure platforms with the most room to grow, rather than carry revenue that loses money at the operating line.

We sit where physical infrastructure meets artificial intelligence.

Artificial intelligence creates value only when it touches something physical: a battery that dispatches at the right moment, a heat pump that runs at the right temperature, a pallet that arrives the same day, and ConnectM builds and operates at that layer. Our energy infrastructure platforms share a common data and intelligence layer, built by Keen Labs, that accesses more than 30 gigabytes of operating and performance data every day across more than 120,000 connected assets, underpinned by twelve patents held or pending. We believe every installation and every delivery makes the models better, and better models win more installations and deliveries.

ConnectM designs, sources and distributes the hardware the grid now needs at its edge: AI-enabled smart heat pumps and controls; our Hi-C hybrid energy storage systems for high-power applications such as data-center generator starting and power transition; our Hi-E lithium-iron-phosphate long-duration storage systems; and virtual power plant software that aggregates distributed assets into dispatchable grid capacity. It also runs our U.S. wholesale procurement and distribution of solar, storage and balance-of-system components to installation partners, including Sun Solar, and supplies Keen-branded equipment through fourteen national distribution and installation partners. The demand driver is not abstract: the International Energy Agency projects that electricity consumption from data centers will more than double, from approximately 415 terawatt-hours in 2024 to approximately 945 terawatt-hours in 2030, and new generation and transmission cannot be built fast enough to keep pace. Distributed storage, grid-interactive heat pumps and aggregated virtual power plants are how the grid adds flexible capacity at the edge, and ConnectM supplies them. Our strategy is to convert one-time equipment sales into recurring grid-services revenue by enrolling the assets we distribute into AI-managed virtual power plants.

ConnectM matches business-to-business freight, including palletized and other heavy goods, to a network of independent contracted drivers in real time and applies AI to dispatch, routing and sortation. Shippers get same-day delivery from warehouse to point of sale at costs below the national carriers. We earn a take rate of approximately 20% on each delivery, complete more than 18,000 deliveries a month, and own no trucks. Our customers, which include wholesalers, manufacturers, retailers and third-party logistics providers, integrate our energy infrastructure platforms into their own fulfillment processes, and retention has historically been strong. Logistics revenue grew to $12.0 million in 2025 from $4.3 million in 2024, its first partial year under our ownership, with positive segment income from operations, and it has kept growing in 2026. In July we acquired a 60% interest in Blue Ribbon Ice, a software platform that applies the same real-time matching model to commercial HVAC, refrigeration and facility service, extending our logistics engine from moving freight to dispatching skilled labor.

We also have a channel into defense. In April 2026 we acquired Harry Kahn Associates, founded in 1943, which provides logistics data systems, technical manuals and training content to the U.S. Department of Defense, the U.S. Coast Guard and defense primes including Boeing, Northrop Grumman and Lockheed Martin. HKA has maintained an uninterrupted contracting relationship with U.S. Naval Air Systems Command since 1976 and has never had a product rejection in more than 80 years. In August we appointed Dan McGrath, a 35-year federal contracting executive who has pursued and executed more than $3.5 billion in funded prime contracts, as HKA’s Chief Executive Officer, and Brigadier General (Ret.) Mark Beesley serves as a senior advisor. I want to set expectations correctly: HKA’s revenue is small today, and we did not acquire a revenue line so much as a channel through which our energy infrastructure technologies can be sold to a customer that does not extend trust lightly. Federal sales cycles are long, and we will announce defense wins when they are contracts with numbers attached, and not before.

The balance sheet has been rebuilt, and the shareholders who stayed were not punished to do it.

Stockholders’ equity has moved from a deficit of $23.8 million at December 31, 2024, to positive $1.6 million at December 31, 2025, to $15.8 million at June 30, 2026: a swing of approximately $40 million in eighteen months.

The most consequential transaction of the rebuild was the exchange of our certain assets and businesses both in USA and India, for 160 million shares of Blue Cloud Softech Solutions Ltd., a BSE-listed technology company. The businesses we exchanged had contributed about 6% of our 2025 revenue. In return we received approximately 17.3% interest in Blue Cloud with an implied value at signing of approximately $39.6 million, more than ConnectM’s entire market capitalization at the time. That position is carried on our balance sheet at $33.7 million, and we retain long-term access to the India fleet data that trains our AI models. The shares are subject to a six-month lock-up under Indian securities regulations through February 2027, after which we are free to use them as collateral for additional financing to retire debt and strengthen our cash position. I regard this holding as strategic capital that we created out of a marginal operating business, without issuing new ConnectM stock in the exchange.

We have also been retiring the legacy financing that accompanied the de-SPAC. During 2025 we retired more than $10 million of debt and derivative liabilities through conversions and structured settlements. Approximately $20 million of debt and convertible notes remains, much of it short-term and expensive, and clearing it is the final step of the rebuild. We recently executed agreements for $5 million of senior secured notes, secured principally by our Blue Cloud shares, an asset already on our balance sheet, to repay a majority of higher-cost convertible notes, shareholder loans and merchant cash advances. If our application to list on a national securities exchange is approved, most of our other outstanding convertible notes are expected to convert automatically at the listing price, and our legacy standby equity purchase agreement would terminate in connection with the listing. Our balance sheet at listing could look very different from the one we inherited. However, there can be no assurance that our application will be approved or that listing will be achieved.

Finally, ConnectM today has 5,727,583 shares outstanding. A tight capitalization is not an accident but a decision: the operating progress described above accrues to a small number of shares, and when we issue equity, we do so deliberately and for a stated purpose.

The people who built this company, and the partners who joined it, own it with you.

ConnectM is fortunate to have a strong base of long-term shareholders, including high-net-worth individuals and family offices, many of whom have been shareholders of the Company for more than five years on average.

Throughout ConnectM's journey—and particularly during some of our most challenging periods—these shareholders have demonstrated their continued confidence in the Company by purchasing additional shares, converting debt into equity, and making additional investments in ConnectM.

Collectively, this group of long-term shareholders—whom I fondly refer to as the “friends and family of ConnectM”—owns more than 50% of ConnectM's outstanding common stock.

I sincerely appreciate their unwavering support, patience, and continued confidence in both ConnectM and our leadership. Their long-term commitment has been instrumental in helping us navigate challenging periods and position the Company for its next phase of growth.

More than a quarter of ConnectM’s outstanding shares are held by two counterparties who sold us assets and agreed to be paid largely in ConnectM stock rather than cash: the sellers of the India logistics land asset we acquired in November 2025, and the founder of Sun Solar. They accepted our equity and they hold it today, alongside our directors and executive officers, none of whom has sold a share through this period and several of whom, including me, bought additional shares in the open market in June.

I took a company public once before, on the Bombay and National Stock Exchanges, and grew it at a 100% compound annual rate, raising capital a single time and never returning to the market. ConnectM has required more than one raise, which I regard as the cost of the structure we inherited rather than the model I intend to run. Management is not operating this company on behalf of shareholders. We are shareholders, and every share of dilution costs us exactly what it costs you.

Capital is a growth tool, not a survival tool.

Three rules govern how we allocate capital. First, our objective is for ConnectM to fund its operations from its own cash flow, so that the equity market is a source of growth capital rather than operating funds. Second, every transaction we consider is judged on whether it improves the earnings power of the Company and its standing with long-term investors. Third, we will not do a deal that creates a short-term headline at the expense of long-term value per share.

Our acquisition approach is disciplined and repeatable. We follow the model of the great serial acquirers: keep the number of transactions steady and let the size of each grow with the Company. We divest with the same discipline when a business does not fit, and the Blue Cloud transaction, in which a platform we acquired in 2017 was monetized at a value above our own market capitalization, is the proof that we know how to realize value as well as build it.

We have applied to list our common stock on a national securities exchange under our existing symbol, CNTM. If obtained, a national exchange listing could broaden the Company’s visibility among institutional investors, index funds and brokerage platforms that cannot own it today, and it is the last structural item on the list I gave you in May 2025.

What to measure us on

In May 2025, when the outlook was bleakest, I wrote to you and listed exactly what we would do: get current on our SEC filings, move up to the top tier of the OTC, grow revenue, reduce debt, and position ConnectM for a return to a national exchange. Every item on that list has been completed or is in process. I am writing this letter for the same reason: so that a year from now you can hold me to it.

Between now and the middle of 2027, measure ConnectM on four things: sequential growth in energy infrastructure revenue; segment-level profitability sustained and extended toward the consolidated level; the number of shares outstanding, which you should expect to change only for stated, value-creating reasons; and the approval of our listing on a national securities exchange. If we deliver those four, we believe the rest follows.

I will not tell you what ConnectM’s stock is worth; I will give you the facts and let you decide. At June 30, 2026, stockholders’ equity was $15.8 million on 5.7 million shares, and our Blue Cloud position alone was carried at $33.7 million, more than the value the public market has recently assigned to the entire company. Our energy infrastructure platforms are growing and generate positive operating income, and our management team owns stock and bought more this summer. Those facts are in our filings; whether they are reflected in our share price is a question for the market, and one I expect a national exchange listing and a broader shareholder base to help answer.

ConnectM is not a company that came back from the brink, but one that was never allowed to be seen clearly, because the structure it inherited obscured the business it was building. That structure is being dismantled piece by piece, and what remains is our energy infrastructure platforms with positive operating income, a rebuilt equity base, a tightly held capitalization, a loyal shareholder base that owns stock and buys more, and positions in markets with structural, not cyclical, demand that is being fueled by AI.

To the shareholders who held through the Expert Market, and who have waited for this company to be valued as a business rather than as a structure: thank you. The rest is on us.

Sincerely,

Bhaskar Panigrahi
Chairman and Chief Executive Officer
ConnectM Technology Solutions, Inc.

About ConnectM Technology Solutions, Inc.

ConnectM Technology Solutions, Inc. is a U.S.-based technology company that develops, sells and operates hardware and software powering the physical layer of the AI economy. The Company’s strategy is organized around two U.S.-centered platforms: DeliveryCircle, its wholly owned, asset-light logistics-technology subsidiary, whose Decios platform uses AI to optimize B2B last-mile delivery; and Keen Labs, its wholly owned AI and technology subsidiary, which designs, sources and distributes AI-enabled distributed-energy and electrification hardware and virtual power plant software. Through Harry Kahn Associates, the Company also serves government and defense customers. For more information, visit www.connectm.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this press release, regarding our future financial performance, our strategy, the proposed listing of our common stock on a national securities exchange, the proposed senior secured notes financing and conversion of outstanding notes, the contemplated divestiture of our Owned Service Network operations, expansion plans, future operations, future operating results, estimated revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or the negative of such terms or other similar expressions. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements, including the risks described in the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” sections of our Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission, including that our financial statements include a going concern explanatory paragraph, that our application to list on a national securities exchange may not be approved, and that the value of our Blue Cloud shareholding, which is subject to a lock-in, may fluctuate significantly.

Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and ConnectM is under no obligation to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Contacts

Investor Relations
Crescendo Communications, LLC
Tel: (212) 671-1020
Email: CNTM@crescendo-ir.com

ConnectM Technology Solutions, Inc.
+1 617-395-1333
irpr@connectm.com

FAQ

How did the Blue Cloud Softech transaction affect ConnectM’s balance sheet and business mix?

ConnectM exchanged its India operations, which contributed about 6% of 2025 revenue, and an India-based land asset for 160 million shares of BSE-listed Blue Cloud Softech Solutions, representing approximately a 17.3% stake. The implied value at signing was about $39.6 million, more than ConnectM’s entire market capitalization at the time, and the position is carried on the balance sheet at $33.7 million. ConnectM also retains long-term access to India fleet data to help train its AI models.

What constraints exist on ConnectM’s Blue Cloud shares and how might they be used?

The Blue Cloud shares are subject to a six-month lock-up under Indian securities regulations through February 2027. After that period, ConnectM expects to be free to use the shares as collateral for additional financing to retire debt and strengthen its cash position.

What steps has ConnectM taken to address legacy SPAC-era financing?

During 2025, ConnectM retired more than $10 million of debt and derivative liabilities through conversions and structured settlements. Approximately $20 million of debt and convertible notes remains. The company recently executed agreements for $5 million of senior secured notes, secured principally by its Blue Cloud shares, to repay a majority of higher-cost convertible notes, shareholder loans and merchant cash advances.

How would a national securities exchange listing affect ConnectM’s capital structure?

If ConnectM’s application to list on a national securities exchange is approved, most of its other outstanding convertible notes are expected to convert automatically at the listing price, and its legacy standby equity purchase agreement would terminate in connection with the listing. The company states that the balance sheet at listing could look very different from the one it inherited, while cautioning there is no assurance the application will be approved.

What are ConnectM’s main operating platforms and how are they performing?

ConnectM operates U.S. energy infrastructure platforms powered by a common AI and data layer, and a logistics platform that matches freight to independent drivers. The energy infrastructure platforms generated $7.5 million of Q2 2026 revenue with positive operating income, while the logistics segment grew revenue from $4.3 million in 2024 to $12.0 million in 2025 with positive segment income from operations and continued growth in 2026.

What is the status and role of Keen Labs and Sun Solar in ConnectM’s results?

Keen Labs, ConnectM’s AI and technology subsidiary, produced $3.9 million of revenue with positive operating income in its second full quarter of product shipments. ConnectM’s 40% interest in Sun Solar contributed approximately $0.7 million of equity-method earnings in the first half of 2026. Both support the company’s energy infrastructure platforms.

How is ConnectM approaching the defense market through Harry Kahn Associates?

ConnectM acquired Harry Kahn Associates in April 2026, gaining a long-standing supplier to the U.S. Department of Defense, U.S. Coast Guard and major defense primes. The company describes HKA’s current revenue as small and views the acquisition primarily as a channel through which its energy infrastructure technologies can be sold to defense customers. Management notes that federal sales cycles are long and plans to announce defense wins only when there are contracts with numbers attached.