Cloudastructure Reports 164% Year-Over-Year Growth in Subscription Revenue for the Second Quarter 2026

Cloudastructure (Nasdaq: CSAI) reported second quarter 2026 revenue of approximately $1.2 million, up 13% year-over-year, driven by a deliberate shift toward recurring subscription services.

Rhea-AI Summary

Cloudastructure (Nasdaq: CSAI) reported second quarter 2026 revenue of approximately $1.2 million, up 13% year-over-year, driven by a deliberate shift toward recurring subscription services. Subscription revenue rose 164% to about $764,000 and comprised roughly 62% of total revenue, versus 27% a year earlier.

Gross profit increased 53% to approximately $610,000, with gross margin improving to about 49% from 37%, as hardware and installation revenue declined. For the first half of 2026, revenue reached roughly $2.5 million, up 39%, with gross profit up about 80%. Net loss narrowed to approximately $1.7 million from $2.2 million, and cash stood near $3.8 million. The company highlighted multifamily and commercial real estate customer expansion, a 99% retention rate, and confirmation that it has regained compliance with Nasdaq’s $1.00 minimum bid price requirement.

Positive

• Subscription revenue up 164% year-over-year to approximately $764,000 in Q2 2026
• Recurring mix rose to ~62% of revenue, from ~27% a year earlier
• Gross profit increased 53% to about $610,000; margin improved to ~49% from ~37%
• First-half 2026 revenue about $2.5 million, up ~39% year-over-year; gross profit up ~80%
• Net loss narrowed to roughly $1.7 million from $2.2 million year-over-year
• Regained Nasdaq compliance with $1.00 minimum bid price after 10 consecutive qualifying trading days

Negative

• Total Q2 revenue grew only ~13% year-over-year to about $1.2 million
• Hardware revenue declined to approximately $233,000 from $455,000 year-over-year
• Installation and other revenue fell to roughly $236,000 from $347,000 year-over-year
• Operating expenses increased to about $2.7 million from $2.3 million year-over-year
• Net loss remained significant at approximately $1.7 million in the quarter despite improvements

News Explained

The selected five-building engagement combines near-term installation work with a larger recurring subscription opportunity, without a disclosed ownership change.

Cloudastructure says it was selected to deploy its surveillance and remote-guarding platform across a five-building Southern California office portfolio. The engagement includes designing and installing camera infrastructure, creating near-term installation revenue and a larger recurring subscription opportunity, but the release describes selection rather than completed deployment.

Subscription revenue for the quarter implies an annualized run rate of approximately $3.1 million based on recurring revenue as of June 30, 2026; this is a run-rate indicator rather than a reported full-year result.

Argus Aug 17 session 17 alerts

-0.18% close to close 81.1x rel. volume Open Argus

Details

News Market Reaction – CSAI

+11.4% Peak Tracked

-19.0% Trough Tracked

$6.01M Market Cap

On Aug 17, the day this news came out, CSAI closed 0.18% below the previous close. Argus tracked a peak move of +11.4% during that session. Argus tracked a trough of -19.0% from its starting point during tracking. Our momentum scanner recorded 17 alerts for this stock that day. Relative volume reached 81.1x the daily average during tracking.

Data tracked by StockTitan Argus for the Aug 17 session.

Key Figures

Subscription revenue growth: 164% Subscription revenue: $764,000 Subscription revenue mix: 62% +5 more

Subscription revenue growth

164%

Q2 2026 year-over-year

Subscription revenue

$764,000

Q2 2026

Subscription revenue mix

62%

Q2 2026 total revenue, versus 27% prior year

Total revenue growth

13%

Q2 2026 year-over-year

Gross profit growth

53%

Q2 2026 year-over-year

Gross margin

49%

Q2 2026, versus 37% prior year

Net loss

$1.7 million

Q2 2026, versus $2.2 million prior year

Cash on hand

$3.8 million

As of June 30, 2026

Historical Context

5 past events · Latest: Aug 12

5 events

1. Aug 12

   Customer deployment

   24h Move

   -1.3%

   Third deployment with longtime Baltimore developer and planned recurring services expansion

2. Aug 10

   Earnings call schedule

   24h Move

   -24.7%

   Scheduled Q2 results call and announced timing for financial results release

3. Aug 06

   Customer deployment

   24h Move

   +16.2%

   Five-building office portfolio deployment replacing traditional onsite security guards

4. Aug 04

   Customer deployment

   24h Move

   +6.8%

   Third Houston deployment expanded coverage to 38% of customer's Texas portfolio

5. Jul 28

   Reverse stock split

   24h Move

   -22.7%

   Announced 1-for-30 reverse split to support Nasdaq minimum bid compliance

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

gross margin, remote guarding, convertible preferred stock, minimum bid price requirement, +1 more

5 terms

gross margin financial

"Gross margin was approximately 49%, compared to approximately 37% in the prior year period."

Gross margin is the difference between how much money a company makes from selling its products and how much it costs to produce them, expressed as a percentage of sales. It shows how efficiently a company is turning sales into profit before other expenses like marketing or salaries. Higher gross margin means the company keeps more money from each sale, which is a good sign of financial health.

View in glossary

remote guarding technical

"remote guarding revenue growth of approximately 156%."

Remote guarding is a security service where trained operators watch live video feeds from a central control center, use two-way audio and automated alerts to deter intruders, and summon on-site responders or police when needed. For investors, it matters because it turns physical security into a software-like, recurring service that can cut on-site labor costs, scale across many locations, and create predictable subscription revenue while reducing theft and liability risks for customers.

convertible preferred stock financial

"technical accounting matter related to the Company’s Series 1 and Series 2 Convertible Preferred Stock."

Convertible preferred stock is a special class of company shares that pays priority, usually fixed, payments to holders and can be exchanged later for a set number of common shares. It matters to investors because it combines steady income and added protection with the chance to share in a company’s upside; think of it as a hybrid between a bond that pays regularly and an option to convert into growth-oriented stock, where the conversion rules influence both potential gains and how much common shareholders’ ownership may be reduced.

minimum bid price requirement regulatory

"the Company has regained compliance with the Minimum Bid Price Requirement"

A minimum bid price requirement is a rule that a stock must trade above a set price for a specified period to stay listed on an exchange. It matters to investors because falling below that threshold can trigger warnings or removal from the exchange, which can cut liquidity, reduce visibility, and often lead to sharper declines in share value—think of it like a venue’s minimum dress code that, if not met, can bar a performer from the stage.

derivative liabilities financial

"a non-cash gain of $319,000 on the change in fair value of derivative liabilities."

Derivative liabilities are obligations a company records when it owes money under financial contracts whose value depends on something else, like interest rates, stock prices, or currencies. Think of them as bets or insurance policies that can create future cash payments; they matter to investors because they can cause sudden changes in a company’s reported debt, profits and cash flow and reveal exposure to market risks that could affect valuation.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

Revenue Mix Continued Shifting Toward Recurring, Higher-Margin Services as Gross Profit Increased 53% Year-Over-Year

Commercial Momentum Continued Through Customer Expansion Across Multifamily, Commercial Real Estate and Critical Infrastructure

Regains Compliance with Nasdaq Listing Requirement

Conference Call to be Held on August 17, 2026 at 12:00 P.M. ET

PALO ALTO, Calif., Aug. 17, 2026 (GLOBE NEWSWIRE) -- Cloudastructure, Inc. (“Cloudastructure” or “the Company”) (Nasdaq: CSAI), a leader in cloud-native AI surveillance and remote guarding solutions, today reported its financial results for the second quarter ended June 30, 2026 and provided a business update.

“Our second quarter results demonstrate a deliberate shift toward a higher-quality, recurring revenue model,” said James McCormick, CEO of Cloudastructure. “Subscription revenue grew 164% year-over-year and reached approximately 62% of total revenue, up from 27% a year ago. This mix shift drove 51% gross profit growth on 13% total revenue growth, establishing a more predictable, scalable, and higher-margin business.”

“While we're encouraged by the continued shift toward recurring revenue and stronger margins, we believe the bigger story is the progress we're making with customers and the broader evolution of the security industry,” continued Mr. McCormick. “The first phase of this transition moved surveillance from passive recording to intelligent, cloud-native platforms capable of detecting and responding to events in real time. The next phase extends that transformation to the response itself, using AI-powered surveillance and live remote guarding to reduce reliance on traditional onsite security models. As customers continue modernizing their security infrastructure, Cloudastructure is well positioned to expand customer relationships, grow recurring revenue and capitalize on what we see as a significantly larger long-term market opportunity.”

Key Financial and Operational Highlights:

• Subscription Revenue Growth: Subscription services revenue increased 164% year-over-year to approximately $764,000, driven by cloud video surveillance revenue growth of 172% and remote guarding revenue growth of 156%.
• Revenue Mix Shift: Subscription services represented approximately 62% of total revenue in the second quarter, compared with approximately 27% in the prior year period, as hardware and installation revenue declined.
• Recurring Revenue Run Rate: Second quarter subscription revenue implies an annualized run rate of approximately $3.1 million based on recurring revenue as of the end of June 2026.
• Gross Profit Expansion: Gross profit increased 53% year-over-year to approximately $610,000, with gross margin of approximately 49%, compared with approximately 37% in the prior year period.
• Expense Discipline: General and administrative expenses decreased 15% year-over-year to approximately $840,000, reflecting lower professional services costs.
• First Half Performance: Revenue for the six months ended June 30, 2026 was approximately $2.5 million, an increase of approximately 39% over the same period in 2025, with gross profit up approximately 80%.
• Reduced Net Loss: Net loss narrowed to approximately $1.7 million from approximately $2.2 million in the prior year period.
  
  

Multifamily Expansion and Customer Growth
Multifamily remains the Company’s largest and most established vertical, with significant expansion opportunities across its existing customer base. Earlier this month, the Company announced its third deployment with a luxury multifamily operator in Houston, expanding Cloudastructure’s footprint to approximately 38% of the customer’s Texas portfolio, demonstrating the Company’s land-and-expand strategy as successful initial deployments lead to broader portfolio adoption. Cloudastructure also continues to serve eight of the ten largest multifamily property managers in the United States, as ranked by NMHC. Combined with a customer retention rate of approximately 99%, management believes expansion within existing accounts contributes to a compounding recurring revenue base rather than offsetting attrition.

New Vertical Expansion
Cloudastructure continued expanding its commercial real estate presence subsequent to the end of the quarter through an additional deployment with one of the world's largest commercial property management companies. Building on the success of earlier office deployments, the Company was selected to deploy its AI-powered surveillance and live Remote Guarding platform across a five-building Southern California office portfolio, replacing traditional onsite security guards. The engagement includes designing and installing the camera infrastructure across all five properties, creating near-term installation revenue and a larger recurring subscription opportunity. The deployment originated through a referral within the same institutional portfolio, reinforcing the Company's land-and-expand strategy and the broader opportunity to grow alongside existing enterprise customers.

Regains Compliance with Nasdaq Listing Requirement
As previously disclosed, on February 17, 2026, the Company was notified by Nasdaq that its Class A Common Stock had failed to meet the $1.00 minimum bid price requirement under Nasdaq Listing Rule 5550(a)(2). Nasdaq has since confirmed that the Company’s stock has maintained a closing bid price of at least $1.00 per share for 10 consecutive business days from July 31 through August 13, 2026. Accordingly, the Company has regained compliance with the Minimum Bid Price Requirement, and the matter is closed.

Financial Results for the Second Quarter Ended June 30, 2026

• Revenue for the second quarter ended June 30, 2026 was $1.2 million, compared to $1.1 million for the same period in 2025, an increase of approximately 13% year-over-year.
  • Subscription services revenue increased to $764,000 from $289,000, an increase of approximately 164%, led by cloud video surveillance revenue growth of approximately 172% and remote guarding revenue growth of approximately 156%. Hardware revenue decreased to $233,000 from $455,000, and installation and other revenue decreased to $236,000 from $347,000, reflecting the Company’s continued shift toward recurring, subscription-based revenue.
     
• Cost of goods sold for the second quarter was $623,000, compared to $686,000 in the prior year period, a decrease of approximately 9%, reflecting lower hardware costs and fewer installation projects, which carry a lower margin profile than the Company’s service lines, partially offset by higher hosting, data center bandwidth, and remote guarding costs to support platform growth.
   
• Gross profit increased to $610,000, compared to $399,000 in the second quarter of 2025, representing approximately 53% year-over-year growth. Gross margin was approximately 49%, compared to approximately 37% in the prior year period, reflecting the increased contribution from recurring service offerings.
   
• Operating expenses for the quarter totaled approximately $2.7 million, compared to approximately $2.3 million in the prior year period, reflecting increased sales and marketing investment and higher operations headcount to support deployment and remote guarding scale, partially offset by lower general and administrative expenses.
   
• General and administrative expenses for the quarter were approximately $841,000, compared to approximately $1.0 million in the prior year period, a decrease of approximately 15%, reflecting reduced professional services costs.
   
• Net loss for the second quarter was approximately $1.7 million, compared to approximately $2.2 million in the same period in 2025, reflecting improved gross profit and a non-cash gain of $319,000 on the change in fair value of derivative liabilities. (Prior year comparative figures have been revised in connection with the technical accounting matter related to the Company’s Series 1 and Series 2 Convertible Preferred Stock. The revision did not affect cash, operations, revenue, or operating expenses.)
   
• As of June 30, 2026, the Company had cash on hand of approximately $3.8 million.
  
  

Second Quarter 2026 Financial Results Conference Call:
The Company will host a conference call on Monday, August 17, 2026 at 12:00 P.M. ET | 9:00 A.M. PT to discuss its financial results for the second quarter ended June 30, 2026, and provide a business update.

Date: August 17, 2026
Time: 12:00 P.M. ET | 9:00 A.M. PT
Live Call: 1-888-506-0062 (U.S. Toll Free) or 1-973-528-0011 (International)
Access Code: 991539
Webcast: https://www.webcaster5.com/Webcast/Page/3134/54406

The live webcast and any related presentation materials made available for the call will be available through the Company’s investor relations website at https://www.cloudastructure.com/investor/home. For interested individuals unable to join the conference call, a replay will be available through August 31, 2026, by dialing 1-877-481-4010 (U.S. Toll Free) or 1-919-882-2331 (International). Participants must use the following code to access the replay of the call: 54406. An archived version of the webcast will also be available for 365 days.

About Cloudastructure
Headquartered in Palo Alto, California, Cloudastructure’s patented award-winning security platform utilizes a scalable cloud-based architecture that features cloud video surveillance with proprietary, state-of-the-art AI/ML analytics, and a seamless remote guarding solution. The combination enables enterprise businesses to achieve proactive, end-to-end security, and pairs that platform with an attractive value proposition that eschews proprietary hardware and offers contract-free, month-to-month pricing and unlimited 24/7 support. With Cloudastructure, companies can achieve unparalleled situational awareness in real time and thereby stop crime as it is happening, while simultaneously achieving up to a 75% lower Total Cost of Ownership than other systems. For more information, visit https://www.cloudastructure.com.

Cautionary Note Regarding Forward-Looking Statements
Certain statements in this press release may be considered forward-looking statements within the meaning of the federal securities laws. Forward-looking statements may include, without limitation, statements regarding customer adoption and expansion, the Company’s land-and-expand strategy, recurring revenue growth and the annualized run rate, product capabilities, market opportunity, deployment timing, and the Company’s ability to scale its platform. Forward-looking statements are typically identified by words and phrases such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “seek,” “should,” “will,” “would,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target” or the negative of such words and other comparable terminology. Forward-looking statements are based on current expectations and assumptions, are subject to risks and uncertainties, and are not guarantees of future performance. The Company has a history of net losses and a limited operating history at scale, and there can be no assurance that it will achieve or sustain profitability. The Company’s ability to grow recurring revenue depends on successful deployment and customer adoption and retention, including in a customer base that may be concentrated in the multifamily sector and among a limited number of customers. Actual results may differ materially from those expressed or implied by forward-looking statements due to multiple factors including, among others: uncertainty regarding market adoption of AI-powered surveillance and remote guarding solutions; customer concentration, churn, and renewal rates; delays, cost overruns, or performance issues in deploying and integrating the Company’s platform; competition and pricing pressure; the Company’s ability to fund growth and meet capital needs; the ability to maintain platform availability, cybersecurity, and data privacy; changes in applicable laws and regulations; the Company’s ability to manage sales and marketing investments and scale operations; delays or changes in financial reporting and accounting treatment;  and the risks and uncertainties discussed in the reports that the Company has filed with the SEC, including its Annual Report on Form 10-K and subsequent filings. Forward-looking statements speak only as of the date of this release. Except as required by applicable law, the Company undertakes no obligation to update or revise any forward-looking statements.

Media Contact
Kathleen Hannon, Sr. Communications Director
Cloudastructure, Inc.
704.574.3732
Kathleen@cloudastructure.com

Investor Contact
Valter Pinto, Managing Director
KCSA Strategic Communications
212.896.1254
Cloudastructure@KCSA.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How did Cloudastructure (CSAI) perform financially in the second quarter of 2026?

Cloudastructure reported Q2 2026 revenue of about $1.2 million, up roughly 13% year-over-year. According to the company, gross profit grew 53% to approximately $610,000, while net loss narrowed to about $1.7 million from $2.2 million in the prior-year quarter.

What was Cloudastructure’s subscription revenue growth in Q2 2026 for CSAI?

Cloudastructure’s subscription services revenue increased approximately 164% year-over-year to around $764,000 in Q2 2026. According to the company, this was led by cloud video surveillance growth of about 172% and remote guarding growth of roughly 156%, significantly shifting its revenue mix toward recurring services.

How did Cloudastructure’s revenue mix change in Q2 2026 for CSAI shareholders?

Cloudastructure’s subscription services represented roughly 62% of total revenue in Q2 2026, up from about 27% a year earlier. According to the company, hardware and installation revenue declined, reflecting an intentional shift to higher-margin, recurring subscription offerings that support more predictable long-term revenue.

Did Cloudastructure (CSAI) regain compliance with Nasdaq listing requirements in 2026?

Yes, Cloudastructure has regained compliance with Nasdaq’s $1.00 minimum bid price requirement. According to the company, its stock maintained a closing bid price of at least $1.00 for 10 consecutive business days from July 31 through August 13, 2026, and the matter is now closed.

What were Cloudastructure’s first-half 2026 results and net loss for CSAI investors?

For the six months ended June 30, 2026, Cloudastructure generated about $2.5 million in revenue, up approximately 39% year-over-year. According to the company, gross profit increased roughly 80% over the same period, while Q2 2026 net loss narrowed to about $1.7 million from $2.2 million.

How is Cloudastructure managing expenses and margins in Q2 2026 for CSAI?

Cloudastructure improved gross margin to about 49% from 37% year-over-year in Q2 2026, aided by a higher subscription mix. According to the company, operating expenses rose to roughly $2.7 million, though general and administrative expenses fell 15% to about $841,000 due to lower professional services costs.

What customer growth and retention metrics did Cloudastructure (CSAI) highlight for Q2 2026?

Cloudastructure emphasized expansion with large multifamily and commercial real estate customers and a retention rate near 99%. According to the company, it serves eight of the ten largest U.S. multifamily property managers and is deploying AI surveillance and remote guarding across additional office portfolios, supporting its land-and-expand strategy.