Cycurion (NASDAQ: CYCU) boosts Q1 2026 margins and revenue visibility with Halo, HavenX deal
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Cycurion, Inc. reported first quarter 2026 results showing stronger margins and smaller losses while remaining unprofitable. Revenue was $3.27 million, down from both the prior quarter and year, but gross margin improved to 21.1% from 12.1% in the fourth quarter of 2025.
Net loss attributable to Cycurion narrowed to $2.13 million from $5.11 million in the prior quarter and $10.25 million a year earlier, and adjusted EBITDA loss improved to -$1.62 million. Cash and cash equivalents were $2.03 million against total liabilities of $17.76 million.
The company executed a binding agreement to acquire Halo Privacy and HavenX, expected to add about $7 million in annualized contracted revenue at roughly 55% gross margin. Including these businesses, Cycurion estimates contracted backlog that may convert to revenue over about one year at $21–$22 million, versus $15–$17 million from existing contracts alone.
Positive
- Meaningful margin expansion and loss reduction: Gross margin increased to 21.1% from 12.1% in the prior quarter, while net loss attributable to Cycurion improved to $2.13 million from $5.11 million and adjusted EBITDA loss narrowed to $1.62 million, indicating substantial operating progress.
- Stronger contracted revenue visibility with accretive deals: A binding agreement to acquire Halo Privacy and HavenX is expected to add about $7 million of annualized contracted revenue at roughly 55% gross margin, raising estimated one-year contracted revenue conversion to $21–$22 million.
Negative
- Continuing losses and limited cash versus liabilities: Despite improvement, Cycurion remains loss-making with a $2.13 million net loss attributable for the quarter and $1.62 million adjusted EBITDA loss, while holding $2.03 million in cash against $17.76 million in total liabilities.
- Revenue contraction during transition: Quarterly revenue declined to $3.27 million from $3.54 million in Q4 2025 and $3.87 million a year earlier as the company winds down legacy contracts ahead of higher-margin replacement work, leaving near-term scale constrained.
Insights
Margins and losses improved sharply, but scale and liquidity remain key constraints.
Cycurion delivered clear operational progress in Q1 2026. Gross margin rose to 21.1%, up from 12.1% in Q4 2025, as management exited lower-margin contracts and cut selling, general and administrative expenses by 31.6% quarter over quarter.
Net loss attributable to Cycurion narrowed to $2.13 million from $5.11 million in Q4 2025 and $10.25 million a year earlier. Adjusted EBITDA loss roughly halved versus the prior quarter to -$1.62 million. However, revenue declined to $3.27 million, reflecting the planned wind-down of legacy work.
The binding agreement to acquire Halo Privacy and HavenX is expected to add about $7 million in annualized contracted revenue at roughly 55% gross margin and lift one-year contracted revenue visibility to $21–$22 million. Total liabilities of $17.76 million versus cash of $2.03 million highlight that execution on higher-margin growth and backlog conversion will be important to improve the balance sheet over time.
8-K Event Classification
2 items: 8.01, 9.01
2 items
Item 8.01
Other Events
Other
Voluntary disclosure of events the company deems important to shareholders but not covered by other items.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Q1 2026 Revenue: $3,268,620
Gross Margin: 21.1%
Net Loss Attributable to Cycurion: $2,128,462
+5 more
8 metrics
Q1 2026 Revenue
$3,268,620
For the three months ended March 31, 2026
Gross Margin
21.1%
Q1 2026 vs 12.1% in Q4 2025
Net Loss Attributable to Cycurion
$2,128,462
Q1 2026, improved from $5,105,054 in Q4 2025
Adjusted EBITDA
-$1,620,826
Non-GAAP, Q1 2026
Halo/HavenX Annualized Revenue
$7 million
Estimated annualized contracted revenue to be added after closing
One-year Contracted Revenue Visibility
$21–$22 million
Estimated revenue conversion over about one year including Halo and HavenX
Cash and Cash Equivalents
$2,028,718
As of March 31, 2026
Total Liabilities
$17,764,283
As of March 31, 2026
Key Terms
Adjusted EBITDA (Non-GAAP), contracted backlog, binding agreements, stock-based compensation, +2 more
6 terms
Adjusted EBITDA (Non-GAAP) financial
"Reconciliation of Net Loss to EBITDA (Non-GAAP) and Adjusted EBITDA (Non-GAAP)"
Adjusted EBITDA (non-GAAP) is a company’s measure of operating cash profitability that starts with earnings before interest, taxes, depreciation and amortization and then removes or adds back one-time items or other costs management deems unrelated to ongoing operations. Investors use it like a cleaned-up snapshot of how the core business is performing—similar to judging a car’s fuel efficiency after excluding costs that don’t affect how it runs—but should compare the specific adjustments to understand what’s been excluded.
contracted backlog financial
"the Company's $112 million contracted backlog is expected to realize approximately $15 million – $17 million"
Contracted backlog is the total dollar value of customer orders or projects that a company has formally committed to deliver but has not yet completed or recognized as revenue. For investors it is a forward-looking measure of expected future sales and cash flow—like a paid to-do list that shows the pipeline of work—but it can overstate certainty if contracts are cancellable, delayed, or subject to change.
binding agreements financial
"executed binding agreements to acquire Halo Privacy and HavenX"
stock-based compensation financial
"Stock-based compensation | 315,833"
Stock-based compensation is when a company pays employees, directors or consultants with shares or the right to buy shares instead of or in addition to cash. It matters to investors because issuing stock or options spreads ownership thinner (like cutting a pie into more slices), which can reduce each existing share’s claim on profits and can also change reported earnings; investors watch it to assess true cost of running the business and how management is incentivized.
Convertible notes financial
"Convertible notes | 192,897"
Convertible notes are a type of short-term loan that a company receives from investors, which can later be turned into company shares instead of being paid back in cash. They matter to investors because they offer a way to support a company early on while giving the potential to own a stake in its success if the company grows and later raises more funding.
factoring liability financial
"Factoring liability | 1,566,887"
Earnings Snapshot
Revenue: $3,268,620
Q1 2026
Revenue
$3,268,620
down from $3,870,050 in Q1 2025
Net loss attributable to Cycurion
$2,128,462
improved from $10,248,486 in Q1 2025
Gross margin
21.1%
up from 17.5% in Q1 2025 and 12.1% in Q4 2025
Adjusted EBITDA
-$1,620,826
down from $515,281 in Q1 2025 and improved vs -$3,303,055 in Q4 2025
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): May 14, 2026
(Exact Name of Registrant as Specified in Its Charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: (888 ) 341-6680
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:
| 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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
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 x
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. o
Item 8.01 Other Events.
On May 14, 2026, the Company issued a press release. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits
(d)Exhibits:
| Exhibit No. | Description | |||||||
| 99.1 | Press Release dated May 14, 2026 | |||||||
| 104 | Inline XBRL for the cover page of this Current Report on Form 8-K | |||||||
2
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CYCURION, INC. | ||||||||||||||
| Date: | May 14, 2026 | By: | /s/ L. Kevin Kelly | |||||||||||
| Name: | L. Kevin Kelly | |||||||||||||
| Title: | Chief Executive Officer | |||||||||||||
3
Exhibit 99.1
Cycurion Reports First Quarter 2026 Results
Delivers 900 Basis Point Gross Margin Expansion, Net Loss Cut 51% and $21 to $22 Million Annual Revenue Visibility Turnaround Momentum
McLean, Virginia., May 14, 2026. (GLOBE NEWSWIRE) -- Cycurion, Inc. (NASDAQ: CYCU) ("Cycurion" or the "Company"), a leader in AI-driven cybersecurity and national security solutions with trusted relationships across the U.S. Government, numerous leading corporations, and high-profile individuals across all industries, announced today results for the first quarter ended March 31, 2026.
"The first quarter of 2026 marks a clear inflection point in our transformation," said Kevin Kelly, Chairman and Chief Executive Officer of Cycurion. "We nearly doubled gross margins, significantly reduced operating expenses and executed binding agreements to acquire Halo Privacy and HavenX, which adds approximately $7 million in annualized contracted revenues at approximately 55% gross margin once the deal closes. Combined with our existing contracted backlog, which we expect to deliver approximately $15 million to $17 million in annual revenue, the addition of Halo Privacy and HavenX will increase our contracted backlog we estimate to convert to revenue in a one year period to approximately $21 million to $22 million. We are executing with discipline - exiting lower margin legacy work, reducing costs and reinvesting in our AI-driven platforms. I am confident in our path to profitability and long-term shareholder value."
Highlights of First Quarter 2026 as Compared to Fourth Quarter 2025
•Revenue of $3.3 million, which reflects the planned wind-down of certain legacy contracts ahead of the ramp of higher-margin replacement work.
•Gross margin expanded 900 basis points to 21.1% from 12.1%, nearly doubling as a result of a deliberate shift to higher-margin contracts and disciplined cost management.
•Selling, general and administrative expenses decreased $1.3 million, or 31.6%, to $2.7 million.
•Net loss improved 51.5% to $2.6 million from $5.3 million.
•EBITDA loss improved 60.2% to $1.9 million from $4.9 million.
Strategic and Operational Momentum
•Halo Privacy and HavenX Acquisition (Binding Agreement May 2026): Adds approximately $7 million in estimated annualized contracted revenue with a gross margin of approximately 55%. Brings industry-leading secure communications technology (including the Halo Link app) and elite digital investigations/attribution capabilities (HavenX), expanding Cycurion's presence in high-growth markets.
•Robust Contract Backlog: Consistent with prior disclosures, the Company's $112 million contracted backlog is expected to realize approximately $15 million – $17 million over the next twelve months, which the addition of Halo Privacy and HavenX upon closing, this expectation increases to approximately $21 million – $22 million over a one yer period.
•Cost Reduction Initiatives: Organizational realignment on track to generate over $2.2 million in annualized savings, with meaningful benefits already reflected in first quarter of 2026 selling, general and administrative expenses.
•Acquisition Pipeline: Continued advancement of the revised Memorandum of Understanding to acquire Kustom Entertainment's Legacy Video Solutions segment (expected to add approximately $5.1 million in annual revenue and approximately $8 million in contracted backlog).
About Cycurion
Based in McLean, Virginia, Cycurion (NASDAQ: CYCU) is a forward-thinking provider of IT cybersecurity solutions and AI, committed to delivering secure, reliable, and innovative services to clients worldwide. Specializing in cybersecurity, program management, and business continuity, Cycurion harnesses its AI-enhanced ARx platform and expert team to empower clients and safeguard their operations. Along with its subsidiaries, Axxum Technologies LLC, Cloudburst Security LLC, and Cycurion Innovation, Inc., Cycurion serves government, healthcare, and corporate clients committed to securing the digital future. For more information, visit www.cycurion.com.
About Halo Privacy
Halo Privacy, with more than 10 years of expertise, develops cutting-edge, privacy-first secure communication tools engineered for the highest security standards, including the revolutionary Halo Link app.
About HavenX
HavenX is a leading digital investigations and attribution firm focused on cyber-harassment, defamation tracking, OSINT, IP geolocation, breach intelligence, and high-confidence threat actor identification.
Forward-Looking Statements
This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the operations and prospective growth of Cycurion's business.
Certain statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Such statements include, but are not limited to, statements regarding the proposed transaction contemplated by the binding agreement, including the likelihood, timing, structure or consummation of the transaction; the anticipated benefits of the transaction; the acceleration of the Company's inorganic growth strategy; the continued execution on the Company's backlog; and other statements that are not historical facts, including statements which may be accompanied by words such as "continue," "will," "may," "could," "should," "expect," "expected," "plans," "intend," "anticipate," "believe," "estimate," "predict," "potential," and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Cycurion and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to, risks related to customer performance and satisfaction, contract modifications, delays or terminations, and the Company’s ability to fulfill contractual obligations, the outcomes of the Company"s investigations, any potential legal proceedings, or the future performance of the Company's stock. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed by Cycurion with the U.S. Securities and Exchange Commission. Cycurion anticipates that subsequent events and developments may cause its plans, intentions, and expectations to change. Cycurion assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Cycurion's plans and expectations as of any subsequent date.
Cycurion Investor Relations:
(888) 341-6680
investors@cycurion.com
Cycurion Media Relations:
(888) 341-6680
media@cycurion.com
2
Quarterly Results of Operations and Non-GAAP Financial Measures
(Unaudited)
| Quarterly Consolidated Results of Operations | |||||||||||||||||
| For the Three Months Ended | |||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||
| Revenue | $ | 3,268,620 | $ | 3,542,644 | $ | 3,870,050 | |||||||||||
| Cost of revenue | 2,580,262 | 3,114,505 | 3,192,287 | ||||||||||||||
| Gross profit | 688,358 | 428,139 | 677,763 | ||||||||||||||
| Gross margin | 21.1 | % | 12.1 | % | 17.5 | % | |||||||||||
| Operating expenses: | |||||||||||||||||
| Selling, general and administrative expenses | 2,743,695 | 4,013,876 | 337,374 | ||||||||||||||
| Stock compensation expenses | 315,833 | 804,424 | — | ||||||||||||||
| Business combination expenses | — | 630,000 | 10,437,894 | ||||||||||||||
| Total operating expenses | 3,059,528 | 5,448,300 | 10,775,268 | ||||||||||||||
| Operating loss | (2,371,170) | (5,020,161) | (10,097,505) | ||||||||||||||
| Interest income | 14,236 | 25,768 | — | ||||||||||||||
| Interest expense | (204,852) | (257,174) | (178,890) | ||||||||||||||
| Gain on debt settlement, net | — | (28,504) | 141,653 | ||||||||||||||
| Other expense | — | — | (113,744) | ||||||||||||||
| Other expense, net | (190,616) | (259,910) | (150,981) | ||||||||||||||
| Loss before income taxes | (2,561,786) | (5,280,071) | (10,248,486) | ||||||||||||||
| Provision for income tax | — | — | — | ||||||||||||||
| Net loss | (2,561,786) | (5,280,071) | (10,248,486) | ||||||||||||||
| Less: Net loss attributable to non-controlling interest | 433,324 | 175,017 | — | ||||||||||||||
| Net loss attributable to Cycurion | $ | (2,128,462) | $ | (5,105,054) | $ | (10,248,486) | |||||||||||
| Reconciliation of Net Loss to EBITDA (Non-GAAP) and Adjusted EBITDA (Non-GAAP) | |||||||||||||||||
| For the Three Months Ended | |||||||||||||||||
| March 31, 2026 | December 31, 2025 | March 31, 2025 | |||||||||||||||
| Net loss attributable to Cycurion | $ | (2,128,462) | $ | (5,105,054) | $ | (10,248,486) | |||||||||||
| Interest income | (14,236) | (25,768) | — | ||||||||||||||
| Interest expense | 204,852 | 257,174 | 178,890 | ||||||||||||||
| Other expense | — | — | 113,744 | ||||||||||||||
| Depreciation and amortization | 1,187 | 7,665 | 74,892 | ||||||||||||||
| EBITDA (Non-GAAP) | (1,936,659) | (4,865,983) | (9,880,960) | ||||||||||||||
| Loss on debt settlement, net | — | 28,504 | (141,653) | ||||||||||||||
| Transaction related expenses | — | 630,000 | 10,437,894 | ||||||||||||||
| Finance expense | — | — | 100,000 | ||||||||||||||
| Stock-based compensation | 315,833 | 904,424 | — | ||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | (1,620,826) | $ | (3,303,055) | $ | 515,281 | |||||||||||
3
CYCURION, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| March 31, 2026 | December 31, 2025 | ||||||||||
| Assets: | |||||||||||
| Cash and cash equivalents | $ | 2,028,718 | $ | 5,255,235 | |||||||
| Accounts receivable, net | 3,336,047 | 2,687,479 | |||||||||
| Prepaid expenses and other current assets | 106,934 | 60,133 | |||||||||
| Total current assets | 5,471,699 | 8,002,847 | |||||||||
| Software development costs, net | 4,735,981 | 4,606,981 | |||||||||
| Goodwill | 21,238,450 | 20,842,508 | |||||||||
| Total non-current assets | 25,974,431 | 25,449,489 | |||||||||
| Total assets | $ | 31,446,130 | $ | 33,452,336 | |||||||
| Liabilities and Stockholders' Equity: | |||||||||||
| Liabilities: | |||||||||||
| Bank loan-revolving credit line | $ | 2,725,546 | $ | 2,933,396 | |||||||
| Loans payable - current portion | 669,693 | 669,693 | |||||||||
| Factoring liability | 1,566,887 | 1,511,678 | |||||||||
| Convertible notes | 192,897 | 192,897 | |||||||||
| Promissory notes | 2,500,849 | 2,499,662 | |||||||||
| Loans payable - related parties | 123,650 | 123,650 | |||||||||
| Accounts payable | 1,441,596 | 1,314,772 | |||||||||
| Accrued liabilities | 4,283,045 | 4,228,337 | |||||||||
| Accrued compensation and benefits | 1,306,906 | 919,825 | |||||||||
| Accrued interest payable | 1,486,041 | 1,347,787 | |||||||||
| Excise tax payable | 1,167,173 | 1,167,173 | |||||||||
| Total current liabilities | 17,464,283 | 16,908,870 | |||||||||
| Loans payable - non-current portion | 300,000 | 300,000 | |||||||||
| Total non-current liabilities | 300,000 | 300,000 | |||||||||
| Total liabilities | 17,764,283 | 17,208,870 | |||||||||
| Stockholders' Equity: | |||||||||||
Preferred stock ($0.0001 par value, 20,000,000 shares authorized) | |||||||||||
Series A convertible preferred stock ($0.0001 par value, 110,000 shares designated, 0 and 0 issued and outstanding, respectively) | — | — | |||||||||
Series B convertible preferred stock ($0.0001 par value, 3,000 shares designated, 0 and 1 issued and outstanding, respectively) | — | — | |||||||||
Series C convertible preferred stock ($0.0001 par value, 5,000 shares designated, 2,547 and 4,851 issued and outstanding, respectively) | — | — | |||||||||
Series D convertible preferred stock ($0.0001 par value, 6,666,700 shares designated, 150,000 and 150,000 issued and outstanding, respectively) | 15 | 15 | |||||||||
Series E convertible preferred stock ($0.0001 par value, 100 shares designated, 51 and 51 issued and outstanding, respectively) | — | — | |||||||||
Series F convertible preferred stock ($0.0001 par value, 10,000 shares designated, 0 and 0 issued and outstanding, respectively) | — | — | |||||||||
Series G convertible preferred stock ($0.0001 par value, 10,000 shares designated, 143 and 143 issued and outstanding, respectively) | — | — | |||||||||
Common stock ($0.0001 par value, 300,000,000 shares authorized, 5,510,021 and 3,642,501 shares issued and outstanding, respectively) | 551 | 364 | |||||||||
| Additional paid in capital | 46,979,742 | 46,979,762 | |||||||||
| Accumulated deficit | (29,007,543) | (26,879,081) | |||||||||
| Total stockholders' equity attributable to Cycurion | 17,972,765 | 20,101,060 | |||||||||
| Deficit attributable to noncontrolling interests | (4,290,918) | (3,857,594) | |||||||||
| Total stockholders' equity | 13,681,847 | 16,243,466 | |||||||||
| Total liabilities and stockholders’ equity | $ | 31,446,130 | $ | 33,452,336 | |||||||
4
CYCURION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
| For the Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Revenue | $ | 3,268,620 | $ | 3,870,050 | |||||||
| Cost of revenue | 2,580,262 | 3,192,287 | |||||||||
| Gross profit | 688,358 | 677,763 | |||||||||
| Operating expenses: | |||||||||||
| Selling, general and administrative expenses | 2,743,695 | 337,374 | |||||||||
| Stock compensation expenses | 315,833 | — | |||||||||
| Business combination expenses | — | 10,437,894 | |||||||||
| Total operating expenses | 3,059,528 | 10,775,268 | |||||||||
| Operating loss | (2,371,170) | (10,097,505) | |||||||||
| Other income/(expenses): | |||||||||||
| Interest income | 14,236 | — | |||||||||
| Interest expense | (204,852) | (178,890) | |||||||||
| Gain on debt settlement, net | — | 141,653 | |||||||||
| Other expense, net | — | (113,744) | |||||||||
| Other expenses, net | (190,616) | (150,981) | |||||||||
| Loss before income taxes | (2,561,786) | (10,248,486) | |||||||||
| Provision for income tax | — | — | |||||||||
| Net loss | (2,561,786) | (10,248,486) | |||||||||
| Less: Net loss attributable to non-controlling interest | 433,324 | — | |||||||||
| Net loss attributable to Cycurion | $ | (2,128,462) | $ | (10,248,486) | |||||||
| Comprehensive loss | $ | (2,128,462) | $ | (10,248,486) | |||||||
| Loss per share: | |||||||||||
| Basic | $ | (0.47) | $ | (15.57) | |||||||
| Diluted | $ | (0.47) | $ | (7.40) | |||||||
| Weighted average shares outstanding: | |||||||||||
| Basic | 4,561,976 | 658,218 | |||||||||
| Diluted | 4,561,976 | 1,383,507 | |||||||||
5
CYCURION, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Three Months Ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cash flows from operating activities: | |||||||||||
| Net loss | $ | (2,561,786) | $ | (10,248,486) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Stock-based compensation | 315,833 | — | |||||||||
| Stock-based compensation - business combination related | — | 9,250,000 | |||||||||
| Amortization of debt discount | 1,187 | 64,850 | |||||||||
| Depreciation of property and equipment | — | 1,709 | |||||||||
| Amortization of software development costs | — | 8,333 | |||||||||
| Gain on debt settlement, net | — | (141,653) | |||||||||
| Finance expense | — | 100,000 | |||||||||
| Changes in assets and liabilities: | |||||||||||
| Accounts receivable, net and other receivables | (648,568) | (1,300,686) | |||||||||
| Prepaid expenses and other current assets | (46,801) | (11,415) | |||||||||
| Accounts payable and accrued liabilities | (184,201) | (286,114) | |||||||||
| Accrued compensation and benefits | 96,248 | 37,673 | |||||||||
| Accrued interest payable | 138,254 | (219,320) | |||||||||
| Net cash used in operating activities | (2,889,834) | (2,745,109) | |||||||||
| Cash flows from investing activities: | |||||||||||
| Cash acquired on business combination | — | 34,983 | |||||||||
| Capitalized software development costs | (129,000) | (70,000) | |||||||||
| Cash withdrawn from Trust Account in connection with redemption | — | 1,001,216 | |||||||||
| Release of Trust Account to Company's bank account | — | 833,324 | |||||||||
| Net cash (used in)/provided by investing activities | (129,000) | 1,799,523 | |||||||||
| Cash flows from financing activities: | |||||||||||
| Proceeds from exercise of warrants | 167 | 3,309,921 | |||||||||
| Redemption of common stock subject to redemption | — | (1,001,216) | |||||||||
| Repayments of revolving line of credit | (207,850) | (9,300) | |||||||||
| Repayment of bank borrowings | — | (5,114) | |||||||||
| Proceeds from convertible notes payable | — | 386,500 | |||||||||
| Proceeds from notes payable | — | 513,200 | |||||||||
| Repayments of notes payable | — | (20,000) | |||||||||
| Net cash (used in)/provided by financing activities | (207,683) | 3,173,991 | |||||||||
| Net (decrease)/increase in cash and cash equivalents | (3,226,517) | 2,228,405 | |||||||||
| Cash and cash equivalents, beginning of period | 5,255,235 | 40,790 | |||||||||
| Cash and cash equivalents, end of period | $ | 2,028,718 | $ | 2,269,195 | |||||||
6
FAQ
How did Cycurion (CYCU) perform financially in Q1 2026?
Cycurion reported Q1 2026 revenue of $3.27 million and a net loss attributable to the company of $2.13 million. Gross margin improved to 21.1%, and adjusted EBITDA loss narrowed to $1.62 million, reflecting cost reductions and a shift to higher-margin contracts.
What margin improvements did Cycurion (CYCU) achieve in Q1 2026?
Cycurion’s gross margin rose to 21.1% in Q1 2026, up from 12.1% in Q4 2025 and 17.5% a year earlier. The improvement came from exiting lower-margin legacy work and tighter cost control, helping reduce operating loss and adjusted EBITDA loss significantly quarter over quarter.
What is Cycurion’s contracted backlog and near-term revenue visibility?
Cycurion has a $112 million contracted backlog. It expects approximately $15–$17 million of this to convert to revenue over about one year, which should increase to roughly $21–$22 million when Halo Privacy and HavenX are included after closing.
What does Cycurion’s Q1 2026 balance sheet show about liquidity and leverage?
At March 31, 2026, Cycurion held $2.03 million in cash and cash equivalents and total assets of $31.45 million. Total liabilities were $17.76 million, including various loans and payables, resulting in total stockholders’ equity of $13.68 million.
How did Cycurion’s operating expenses change in Q1 2026 compared with Q4 2025?
Selling, general and administrative expenses fell to $2.74 million in Q1 2026 from $4.01 million in Q4 2025. Total operating expenses dropped to $3.06 million from $5.45 million, contributing to a significantly lower operating loss of $2.37 million.