Kneat Releases 2025 Annual Shareholder Letter Highlighting Resilience, Opportunities Presented by Artificial Intelligence

Rhea-AI Summary

Kneat (OTCQX: KSIOF) released its 2025 shareholder letter highlighting resilient growth amid industry headwinds. The company reported software revenue +33% in 2025, $74M+ Annual Recurring Revenue and a Net Revenue Retention of 115%.

Kneat cited record new customers, 100% retention among core strategic customers, AI features for GxP environments, a 98/100 G2 satisfaction score, and an NPS above 70. Management expects improving operating efficiency and a path to cash-flow breakeven in 2026.

Positive

• Software revenue +33% year-over-year in 2025
• $74M+ Annual Recurring Revenue (ARR)
• NRR 115% indicating expansion within the installed base
• Record new customers in 2025 and 100% retention of core strategic customers
• 98/100 G2 satisfaction score and NPS >70

Negative

• Net Revenue Retention decreased versus 2024 due to deferred expansions and non-strategic churn
• Industry-wide delayed buying cycles and heightened ROI scrutiny pressured growth dynamics

News Market Reaction – KSIOF

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-1.42% News Effect

On the day this news was published, KSIOF declined 1.42%, reflecting a mild negative market reaction.

Data tracked by StockTitan Argus on the day of publication.

LIMERICK, Ireland, Feb. 25, 2026 (GLOBE NEWSWIRE) -- kneat.com, inc. (TSX: KSI) (OTCQX: KSIOF) (“Kneat” or the “Company”) a leader in digitizing and automating validation and quality processes, today released its annual shareholder letter highlighting the durability of its growth over the course of a complex year for life sciences companies and the opportunities ahead.

Dear Shareholders,

As we look back on 2025, I want to begin by thanking you for your continued confidence in Kneat. This past year underscored the essential role our platform plays in helping the world’s leading life sciences organizations operate with compliance, consistency, and efficiency. It also highlighted our strength in a period of increased macro uncertainty.   Across the enterprise software landscape, companies faced delayed buying cycles, heightened ROI scrutiny, and questions about the impact of artificial intelligence. Against these industry headwinds, Kneat delivered strong and resilient performance. We grew software revenue by 33%, welcomed a record number of new customers, and continued to gain market share over the competition. Since signing our first customer a decade ago, our land and expand model has scaled organically to more than $74 million in Annual Recurring Revenue¹, supported by a strong Net Revenue Retention (NRR)¹ rate of 115% in 2025.   The NRR decrease over 2024 stems mainly from deferred expansion deals and churn related to non-strategics. We are not aware of any churn to a competitor, and we maintained 100% retention among our core strategic customers.

Recent commentary has raised concerns about potential AI substitution in SaaS, concerns that apply least in the highly regulated, mission-critical environments where Kneat operates. Our customers are among the world’s most sophisticated life sciences manufacturers, where compliance, traceability, and absolute data integrity are non-negotiable. Enterprise software in this context is a trust-driven business. Kneat has earned that trust through years of proven performance as the partner of choice for thousands of users across many of the world’s largest life sciences companies, including 8 of the top 10 pharmaceutical manufacturers. The reliability and maturity of our platform, combined with long-standing customer relationships, create significant barriers that are difficult for new or existing competitors to overcome.

Kneat is purpose-built for the full rigor of validation in regulated environments. Every action within our platform is attributable, traceable, auditable, and preserved for long-term regulatory review across global authorities. This architecture and its depth of data integrity is exceptionally difficult to replicate and represents a durable competitive advantage.

In this context, AI is not a threat but a meaningful accelerant. Safe and effective AI depends on structured, high-quality, audit-ready data, and Kneat provides exactly that foundation as the trusted system of record. In 2025, we introduced AI capabilities designed specifically for GxP-aligned environments, including a content review assistant, natural-language process analysis, a user-support chatbot and instant language translation. Each of these capabilities operates within embedded governance frameworks, ensuring that AI-supported outputs meet the same standards as traditional validation processes.   Looking forward, our AI roadmap includes deeper automation across lifecycle documentation, risk management, workflows, and end-to-end process optimization, all delivered with the transparency and reliability our customers require.

Our differentiation continues to strengthen. The combination of deep validation functionality, configurable zero-code workflows, and a robust data-integrity model aligned to regulatory expectations is unique in our market. Customer feedback reinforces this position. Kneat recently earned a 98/100 G2 Satisfaction Score, the highest in the Pharma and Biotech category and twenty points ahead of the next vendor. We continue to maintain a Net Promoter Score above 70, reflecting exceptional customer advocacy. Our team recently won a prestigious Gold Stevie® Award, recognizing their excellence in global tech support.

Our record number of new customers in 2025 reflects Kneat’s standing as the trusted standard. As life sciences organizations modernize their quality systems and adopt AI responsibly, the need for structured, compliant, audit-ready data is growing sharply, making Kneat an increasingly central component of their digital infrastructure.

Taken together, these factors underpin our confidence as we enter 2026. We have a scalable business model, a growing market opportunity, and meaningful expansion potential across both new and existing customers. With disciplined investment, improving operating efficiency, and a clear path to cash-flow breakeven, we remain focused on delivering enduring value to our customers and our shareholders.

Sincerely,
Eddie Ryan
CEO

About Kneat

Kneat Solutions provides leading companies in highly regulated industries with unparalleled efficiency in validation and compliance through its digital validation platform Kneat Gx. As an industry leader in customer satisfaction, Kneat boasts an excellent record for implementation, powered by our user-friendly design, expert support, and on-demand training academy. Kneat Gx is an industry-leading digital validation platform that enables highly regulated companies to manage any validation discipline from end-to-end. Kneat Gx is fully ISO 9001 and ISO 27001 certified, fully validated, and 21 CFR Part 11/Annex 11 compliant. Multiple independent customer studies have shown that Kneat Gx reduces man-hours associated with validation documentation by up to 50%, accelerates review and approval cycles by up to 50%, and consistently supports higher standards of regulatory compliance. For more information visit www.kneat.com.

Cautionary and Forward-Looking Statements

Except for the statements of historical fact contained herein, certain information presented constitutes “forward-looking information” within the meaning of applicable Canadian securities laws. Such forward-looking information includes, but is not limited to, the relationship between Kneat and the customer, Kneat’s business development activities, the use and implementation timelines of Kneat’s software within the customer’s validation processes, the ability and intent of the customer to scale the use of Kneat’s software within the customer’s organization, our ability to win business from new customers and expand business from existing customers, the expected use of our financial resources and the anticipated effects thereof on our business and operations, and the compliance of Kneat’s platform under regulatory audit and inspection. These and other assumptions, risks and uncertainties may cause Kneat’s actual results, performance, achievements and developments to differ materially from the results, performance, achievements or developments expressed or implied by forward-looking statements.

Material risks and uncertainties relating to our business are described under the headings “Cautionary Note Regarding Forward-Looking Statements and Information” and “Risk Factors” in our MD&A dated February 25, 2026, under the heading “Risk Factors” in our Annual Information Form dated February 25, 2026 and in our other public documents filed with Canadian securities regulatory authorities, which are available at www.sedarplus.ca. Forward-looking statements are provided to help readers understand management’s expectations as at the date of this release and may not be suitable for other purposes. Readers are cautioned not to place undue reliance on forward-looking statements. Kneat assumes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as expressly required by law. Investors should not assume that any lack of update to a previously issued forward-looking statement constitutes a reaffirmation of that statement. Continued reliance on forward-looking statements is at an investor’s own risk.

For further information:

Katie Keita, Kneat Investor Relations
P: + 1 902-706-9074

¹ Annual Recurring Revenue (“ARR”) and Net Revenue Retention (“NRR”) are supplementary financial measures. See ‘Supplementary Financial Measures’ section of our MD&A for additional information.

FAQ

How much did Kneat (KSIOF) grow software revenue in 2025?

Kneat reported software revenue growth of 33% in 2025. According to the company, this performance occurred despite delayed buying cycles and stronger ROI scrutiny across enterprise software buyers.

What is Kneat's Annual Recurring Revenue (ARR) for 2025 and what does it mean for KSIOF?

Kneat cited more than $74 million in ARR for 2025. According to the company, this reflects scalable land-and-expand traction and recurring revenue visibility across its life sciences customer base.

What does a 115% Net Revenue Retention (NRR) imply for Kneat (KSIOF)?

NRR of 115% implies existing customers expanded overall spend in 2025. According to the company, the NRR dip versus 2024 was driven mainly by deferred expansions and churn among non-strategic accounts.

How is Kneat positioning AI for regulated life sciences environments (KSIOF)?

Kneat introduced AI features tailored for GxP environments, including content review and a support chatbot. According to the company, these operate within governance frameworks to preserve audit-readiness and data integrity.

What customer satisfaction metrics did Kneat (KSIOF) report for 2025?

Kneat reported a 98/100 G2 satisfaction score and a Net Promoter Score above 70. According to the company, these metrics reflect strong product fit and high customer advocacy in Pharma and Biotech.

What is Kneat's near-term financial outlook and cash-flow plan for 2026 (KSIOF)?

Kneat expects disciplined investment, improving efficiency, and a clear path to cash-flow breakeven in 2026. According to the company, management is focused on scaling responsibly while pursuing cash-flow improvements.