CSP Inc. (NASDAQ: CSPI) Q1 2026 profit falls as revenue declines

Rhea-AI Filing Summary

CSP Inc. reported fiscal first quarter 2026 revenue of $12.0 million, down from $15.7 million a year earlier, as prior-year results included over $4.5 million of one-time contracts. Services revenue grew 14.6% to $5.3 million, while product revenue declined to $6.7 million.

Total gross margin rose to 39.3% of sales from 29.1%, lifting gross profit slightly to $4.7 million despite lower revenue. Net income was $91 thousand, or $0.01 per diluted share, versus $472 thousand, or $0.05 per diluted share, in the prior-year quarter.

Cash and cash equivalents were $24.9 million as of December 31, 2025. The Board declared a quarterly dividend of $0.03 per share, payable March 12, 2026 to shareholders of record on February 26, 2026. The company highlighted growth in managed services and initial AZT PROTECT deployments.

Positive

• None.

Negative

• Revenue and earnings declined year over year, with total sales falling from $15.7 million to $12.0 million and net income dropping from $472 thousand to $91 thousand, indicating materially weaker profitability despite improved gross margins.

Insights

Equity analyst

Margins improved and services grew, but revenue and earnings declined sharply year over year.

CSP Inc. shifted its mix toward higher-margin services in fiscal Q1 2026. Services revenue increased 14.6% to $5.3 million, while product revenue fell following prior-year one-time contracts. This mix pushed gross margin up to 39.3% from 29.1%, keeping gross profit slightly higher at $4.7 million.

However, total sales dropped to $12.0 million from $15.7 million, and net income declined to $91 thousand from $472 thousand, with EPS at $0.01 versus $0.05. The company maintained a solid cash position of $24.9 million and declared a quarterly dividend of $0.03 per share, indicating ongoing capital return even amid lower earnings.

The narrative emphasizes growth in managed services and early traction for AZT PROTECT, including multi-site deployments. Future filings for periods after December 31, 2025 will show whether higher-margin services and cybersecurity offerings can offset lumpiness in large product orders and support more consistent profitability.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM 8-K

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Current Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

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Date of Report (Date of earliest event reported): February 12, 2026

CSP Inc.

(Exact name of the registrant as specified in its charter)

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Massachusetts

(State or other jurisdiction of incorporation)

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000-10843	04-2441294
(Commission File Number)	(IRS Employer Identification No.)

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175 Cabot Street - Suite 210, Lowell, MA	01854
(Address of principal executive offices)	(Zip Code)

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(978) 954-5038

(Registrant’s telephone number, including area code)

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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.01 per share	CSPI	Nasdaq Global Market

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Item 2.02 Results of Operations and Financial Condition.

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On February 12, 2026 CSP Inc. (the “Company”) issued a press release announcing its financial results for the first quarter of fiscal year 2026, which ended on December 31, 2025. A copy of the press release relating to such announcement is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

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The information set forth in this Form 8-K, including the exhibits attached hereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that Section. The information in this Form 8-K shall not be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act regardless of any general incorporation language in such filing, except as shall be expressly set forth by specific reference in such filing.

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Item 9.01 Financial Statements and Exhibits

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(d)Exhibits

99.1Press Release Dated February 12, 2026

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SIGNATURE

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Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

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CSP INC.

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Date: February 12, 2026

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By: /s/Gary W. Levine

Gary W. Levine

Chief Financial Officer

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Exhibit 99.1

CSPi Reports 14.6% Services Revenue Growth, Significantly Expands Gross Margin and Generates FY 2026 First Quarter Profit

Strong Customer Retention & New Customers Drive Technology Solutions Business

New Customers Signed for AZT PROTECT as Existing Customers Add Additional Sites

Conference Call Today at 10 a.m. ET

LOWELL, Mass., February 12, 2026 – CSP Inc. (NASDAQ: CSPI), an award-winning provider of security and packet capture products, managed IT and professional services and technology solutions, today announced results, including total gross margin of 39.3%, for the fiscal first quarter ended December 31, 2025. The Company also announced that the Board of Directors declared a quarterly dividend of $0.03 per share payable March 12, 2026, to shareholders of record at the close of business on February 26, 2026.

Recent Achievements and Operating Highlights

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● Fiscal first quarter services revenue increased 14.6% as the Company achieved solid customer retention and acquisition to start the fiscal year.

● Fiscal first quarter gross margin increased more than 10%, reflecting the Company’s continued growth of higher margin service revenue.

● Proof of Concept (PoC) single-site AZT PROTECT engagements proved to be successful as several customers signed orders to expand site deployment since the beginning of fiscal 2026 while the sales pipeline continued to expand.

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“We had an encouraging start to the year and the progress we made across our businesses during the quarter positions us favorably for the next three quarters,” commented Victor Dellovo, Chief Executive Officer. “While our services revenue grew 14.6% over the same prior year period, our product revenue comparison was impacted by several large, one-time orders during the first quarter of fiscal year 2025. At the beginning of this fiscal year, we devoted more resources to further drive our services revenue performance and these investments are already contributing to growth. Our service revenue generates significantly higher gross margin than our product revenue and the first quarter growth led to our overall significant gross margin increase. Our managed services practice performed well and the number of customers we added in the fiscal first quarter was among the highest in terms of net new engagements to kick-off the year, raising our full year optimism for the overall TS business.”

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“We are also generating positive developments within the AZT PROTECT offering as we added several new initial site customers during the fiscal first quarter. While the revenue contribution from these initial deployments is small, it aligns with our overall strategy to get a foot in the door to prove ourselves and drive revenue. This initiative has begun to bear fruit as we increased orders from existing customers and we now have several enterprises deploying AZT PROTECT at more than one location. We are focused on driving expansion of AZT PROTECT deployment through our distribution partners and further deepen our customer engagements as we move through the year, ensuring that our best-of-class AZT PROTECT is protecting the most sensitive infrastructures, including power and water. We believe the solution remains unmatched in its effectiveness to stop otherwise unprotected attacks on critical operating systems throughout the world.”

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Fiscal 2025 Fourth Quarter Results

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Revenue for the fiscal first quarter ended December 31, 2025 was $12.0 million compared to revenue of $15.7 million for the fiscal first quarter ended December 31, 2024. The year-ago fiscal first quarter included several one-time customer contracts totaling over $4.5 million of revenue recognized, and while the Company is pursuing similar sized transactions, the timing of these very from quarter to quarter.

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Despite the revenue decline, gross profit for the three months ended December 31, 2025 increased slightly to $4.7 million compared to $4.6 million in the prior year, demonstrating the Company’s continued focus on higher margin products and services. Gross margin for the fiscal first quarter ended December 31, 2025, was 39.3%

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Exhibit 99.1

of sales, increasing more than 10% compared to 29.1% of sales for the year ago fiscal first quarter, primarily due to the higher proportion of services revenue. The Company reported net income of $91 thousand, or $0.01 per diluted common share for the fiscal first quarter, compared to net income of $472 thousand, or $0.05 per diluted common share for the prior fiscal year first quarter.

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The Company’s balance sheet remained robust, and as of December 31, 2025, had cash and cash equivalents of $24.9 million, providing the Company the necessary resources to execute its growth strategies for managed services and the AZT PROTECT offering.

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Conference Call Details

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CSPi Chief Executive Officer Victor Dellovo and Chief Financial Officer Gary W. Levine will host a conference call at 10:00 a.m. (ET) today to review CSPi’s financial results and provide a business update. To listen to a live webcast of the call, the event link is https://www.webcaster5.com/Webcast/Page/2912/53620. Individuals also may listen to the call via telephone, by dialing 973-528-0011 or 888-506-0062 and use the Participant Access Code: 482107 when greeted by the live operator. A replay of the webcast will be available for approximately one year on the CSPi website.

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About CSPi

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CSPi (NASDAQ:CSPI) operates two divisions, each with unique expertise in designing and implementing technology solutions to help customers use technology to success. The High Performance Product division, including ARIA Cybersecurity Solutions, recognizes that better, stronger, more effective cybersecurity starts with a smarter approach. ARIA's solutions provide new ways for organizations to protect their most critical assets—they can shield their critical applications from cyberattack with the AZT solution, while monitoring internal traffic, device-level logs, and alert output with our ARIA ADR solution to substantially improve threat detection and surgically disrupt cyberattacks and data exfiltration. Rounding out the portfolio, Aria's AZT Gateway Software allows us to interrogate network packets at 100mbps line-rate to enforce forwarding and capture policies on the fly. Customers in a range of industries rely on our solutions to accelerate incident response, automate breach detection, and protect their most critical assets and applications—no matter where they are stored, used, or accessed. 

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CSPi's Technology Solutions division helps clients achieve their business goals and accelerate time to market through innovative IT solutions and professional services by partnering with best-in-class technology providers. For organizations that want the benefits of an IT department without the cost, we offer a robust catalog of Managed IT Services providing 24×365 proactive support. Our team of engineers have expertise across major industries supporting five key technology areas: Advanced Security; Communication and Collaboration; Data Center; Networking; and Wireless & Mobility.

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Safe Harbor

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The Company wishes to take advantage of the "Safe Harbor" provisions of the Private Securities Litigation Reform Act of 1995 with respect to statements that may be deemed to be forward-looking under the Act. Generally, the use of words such as “expect,” “intend,” “estimate,” “believe,” “anticipate,” “will,” “forecast,” “outlook”, “plan,” “project,” or similar words identify forward-looking statements that we intend to be included within the safe harbor protections provided by the federal securities laws. However, these words are not the exclusive means of identifying such statements. Although we believe that our plans, intentions, and other expectations reflected in or suggested by such forward-looking statements are reasonable, we cannot assure you that we will achieve those plans, intentions, or expectations. All forward-looking statements are subject to risks and uncertainties that may cause actual results or events to differ materially from those that we expected.

Important factors that could cause actual results or events to differ materially from our expectations, or cautionary statements, are disclosed under “Part I. Item 1A. – Risk Factors” included in our most recent Annual

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Exhibit 99.1

Report on Form 10-K and from time to time in our subsequent Quarterly Reports on Form 10-Q and our other US Securities and Exchange Commission (“SEC”) filings and public communications.

All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by those cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this report in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not reflect all of the factors that could cause actual results or events to differ from our expectations. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this report are made only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

SOURCE: CSP Inc.

CONTACT:

CSP Inc.
Gary Levine, 978-954-5040
Chief Financial Officer

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Exhibit 99.1

CSP INC. AND SUBSIDIARIES
CONDENSED UNAUDITED CONSOLIDATED BALANCE SHEETS
(Amounts in thousands)

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​	​ ​ ​	December 31, 2025		​ ​ ​	September 30, 2025
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Assets		​	​		​	​
Current assets:		​	​		​	​
Cash and cash equivalents	​	$	24,928	​	$	27,418
Accounts receivable, net	​		11,786	​		12,000
Financing receivables, net	​	​	7,714	​	​	8,939
Inventories	​		2,366	​		1,442
Other current assets	​		2,362	​		2,521
Total current assets	​		49,156	​		52,320
Financing receivables due after one year, net	​		7,424	​		5,965
Cash surrender value of life insurance	​	​	5,877	​	​	5,845
Other assets	​		6,697	​		7,033
Total assets	​	$	69,154	​	$	71,163
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Liabilities and Shareholders’ Equity	​		​	​		​
Current liabilities	​	$	17,856	​	$	22,183
Pension and retirement plans	​		1,202	​		1,219
Other non-current liabilities	​		5,286	​		3,210
Shareholders’ equity	​		44,810	​		44,551
Total liabilities and shareholders’ equity	​	$	69,154	​	$	71,163

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Exhibit 99.1

CSP INC. AND SUBSIDIARIES
CONDENSED UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in thousands, except per share data)

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​	Three months ended
​	December 31,		​ ​ ​	December 31,
​	2025		​	2024
Sales:	​	​		​	​
Product	$	6,701	​	$	11,015
Services		5,335	​		4,655
Total sales		12,036	​		15,670
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Cost of sales:		​	​		​
Product		5,282	​		9,119
Services		2,019	​		1,987
Total cost of sales		7,301	​		11,106
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Gross profit		4,735	​		4,564
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Operating expenses:		​	​		​
Engineering and development		858	​		786
Selling, general and administrative		3,989	​		4,132
Total operating expenses		4,847	​		4,918
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Operating loss		(112)	​		(354)
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Other income, net		483	​		711
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Income before income taxes	​	371	​		357
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Income tax expense (benefit)	​	280	​		(115)
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Net income	$	91	​	$	472
Net income attributable to common shareholders	$	86	​	$	438
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Net income per common share - basic	$	0.01	​	$	0.05
Weighted average shares outstanding – basic		9,442	​		9,124
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Net income per common share - diluted	$	0.01	​	$	0.05
Weighted average shares outstanding net income - diluted		9,683	​		9,619

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FAQ

How did CSP Inc. (CSPI) perform financially in fiscal Q1 2026?

CSP Inc. reported fiscal Q1 2026 revenue of $12.0 million, down from $15.7 million a year earlier. Net income was $91 thousand, or $0.01 per diluted share, compared with $472 thousand, or $0.05 per diluted share, in the prior-year quarter.

What drove CSP Inc.’s gross margin improvement in Q1 2026?

Gross margin rose to 39.3% of sales in Q1 2026 from 29.1% a year earlier, primarily due to a higher proportion of services revenue. Services carry significantly higher margins than product sales, and 14.6% services revenue growth helped offset the decline in lower-margin product revenue.

How did CSP Inc.’s services and product revenues change year over year?

In fiscal Q1 2026, services revenue increased to $5.3 million from $4.7 million, a 14.6% rise. Product revenue declined to $6.7 million from $11.0 million, largely because the prior-year quarter included over $4.5 million of one-time customer contracts that did not repeat.

What was CSP Inc.’s cash position at December 31, 2025?

As of December 31, 2025, CSP Inc. held $24.9 million in cash and cash equivalents. This compares with $27.4 million at September 30, 2025, and provides resources to pursue growth strategies in managed services and the AZT PROTECT cybersecurity offering.

Did CSP Inc. declare a dividend with its Q1 2026 results?

Yes. CSP Inc.’s Board of Directors declared a quarterly dividend of $0.03 per share. The dividend is payable on March 12, 2026, to shareholders of record at the close of business on February 26, 2026, continuing the company’s cash return to shareholders.

What updates did CSP Inc. provide on its AZT PROTECT offering?

CSP Inc. reported adding several new initial site customers for AZT PROTECT in fiscal Q1 2026 and expanding deployments with existing customers to multiple locations. While early revenue is small, the company views these wins as important steps toward broader adoption through distribution partners.

How did CSP Inc.’s operating expenses change in Q1 2026?

Total operating expenses were $4.8 million in fiscal Q1 2026, slightly down from $4.9 million a year earlier. Engineering and development expenses rose to $0.9 million, while selling, general and administrative expenses decreased to $4.0 million, helping limit the operating loss to $112 thousand.

Filing Exhibits & Attachments

5 documents

Press Releases

• EX-99.1 EX-99.1 117.4 KB

Other Documents

• EX-101 EX-101.SCH 3.3 KB
• EX-101 EX-101.DEF 2.7 KB
• EX-101 EX-101.LAB 16.9 KB
• EX-101 EX-101.PRE 11.1 KB