Track Group (TRCK) posts Q1 profit and sets higher FY26 margin goals

Rhea-AI Filing Summary

Track Group, Inc. reported a solid turnaround for Q1 FY26, with total revenue of $9.1M, up about 5.2% from $8.7M in Q1 FY25. Operating income improved sharply to $0.8M from $0.1M, and net results swung to a $0.5M profit versus a $2.0M loss a year earlier.

Non-GAAP Adjusted EBITDA was $1.2M, nearly flat year over year, with margin at 13.4% versus 14.4%, reflecting higher costs despite better profitability. For FY26, the company targets revenue of $38M–$39M versus $35.2M in FY25 and an Adjusted EBITDA margin of 18%–19% compared with 16.4%.

On the balance sheet as of December 31, 2025, total assets were $39.7M, long-term debt was about $42.7M, and stockholders’ equity remained negative at roughly $11.9M, indicating a continued equity deficit despite the return to profitability.

Positive

• Return to profitability and stronger operations: Q1 FY26 revenue rose to $9.1M (about 5.2% growth), operating income increased to $0.8M from $0.1M, and net results swung to a $0.5M profit from a $2.0M loss in Q1 FY25.
• Improved full-year profitability outlook: The company targets FY26 revenue of $38M–$39M versus $35.2M in FY25 and projects Adjusted EBITDA margin of 18%–19%, up from 16.4%, signaling expectations for higher efficiency.

Negative

• Highly leveraged balance sheet with equity deficit: As of December 31, 2025, long-term debt of about $42.7M exceeded total assets of $39.7M, and total equity remained negative at roughly $11.9M, highlighting ongoing capital structure risk despite the quarterly profit.

Insights

Equity research analyst

Track Group posts a profitable quarter and guides to higher FY26 margins, but leverage and negative equity remain key constraints.

Track Group delivered a notable earnings rebound in Q1 FY26. Revenue rose to $9.1M, about 5.2% above Q1 FY25, while operating income rose to $0.8M from $0.1M. Net income attributable to common shareholders improved to a $0.5M profit versus a $2.0M loss a year earlier, helped in part by a gain on sale or dissolution of a subsidiary and a positive currency impact.

Non-GAAP Adjusted EBITDA was relatively stable at $1.2M, with margin slipping to 13.4% from 14.4%, showing that cost pressures offset some of the operating improvement. Management’s preliminary FY26 outlook calls for revenue of $38M–$39M compared with $35.2M in FY25 and an Adjusted EBITDA margin of 18%–19% versus 16.4%, indicating an ambition to expand profitability over the full year.

The capital structure remains a critical consideration. As of December 31, 2025, total assets were $39.7M while long-term debt stood at about $42.7M, and total equity was a deficit of roughly $11.9M. Future filings for FY26 will show whether the projected margin expansion and growth trajectory are sufficient to improve this leveraged profile over time.

false 0001045942 0001045942 2026-02-13 2026-02-13

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): February 13, 2026

Commission File Number: 0-23153

Track Group, Inc.

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

Delaware		87-0543981
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

200 E 5th Ave, Suite 100, Naperville, Illinois 60563

(Address of principal executive offices)

(877) 260-2010

(Registrant’s Telephone number)

Not Applicable

(Former Name or Former Address, if Changed Since Last Report)

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: None.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2)

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. ☐

Item 2.02 Results of Operations and Financial Condition.

Track Group, Inc. (the "Company") issued a press release on February 13, 2026, announcing its financial results for the quarter ended December 31, 2025. A copy of the press release is attached hereto as Exhibit 99.1.

In accordance with General Instruction B.2 for Form 8-K, the information in this Form 8-K, including Exhibit 99.1, shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press Release, dated February 13, 2026
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

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.

	TRACK GROUP, INC.
Date: February 13, 2026	By:	/s/ James A. Berg
		James A. Berg
		Chief Financial Officer

Exhibit 99.1

FOR IMMEDIATE RELEASE

February 13, 2026

James Berg

Chief Financial Officer

jim.berg@trackgrp.com 

Track Group Reports 1^st Quarter Fiscal 2026 Financial Results

NAPERVILLE, ILLINOIS – Track Group, Inc. (OTCQB: TRCK), a global leader in offender tracking and monitoring services, today announced financial results for its fiscal quarter ended December 31, 2025 (“Q1 FY26”). In Q1 FY26, the Company posted (i) total revenue of $9.1 Million (“M”), an increase of approximately 5.2% over total revenue of $8.7M for the quarter ended December 31, 2024 (“Q1 FY25”); (ii) Q1 FY26 operating income of $0.8M compared to Q1 FY25 operating income of $0.1M; and (iii) net income attributable to common shareholders of $0.5M in Q1 FY26 compared to net loss attributable to common shareholders of ($2.0M) in Q1 FY25.

“Our Q1 FY26 results reflect continued momentum as we reinvest in our core technology and expand our footprint with new contract wins,” said Derek Cassell, CEO of Track Group. “Revenue growth in key regions like Florida and Illinois, along with the strategic realignment of our global operations, reinforces our position as a trusted leader in GPS electronic monitoring. While higher costs affected gross profit and Adjusted EBITDA this quarter, our return to net profitability and stronger operating income show that our long-term strategy is working. We are confident that these investments lay the foundation for future growth and even greater value to our clients and shareholders.”

FINANCIAL HIGHLIGHTS

● Total Q1 FY26 revenue of $9.1M increased approximately 5.2% compared to Q1 FY25 revenue of $8.7M. The increase in revenue was driven principally by an increase in people assigned to monitoring for clients in Florida and Illinois. This increase was partially offset by a revenue decrease for our Chilean subsidiary, which was sold November 1, 2025.

● Gross profit of $4.3M in Q1 FY26 decreased approximately 3.5% compared to Q1 FY25 gross profit of $4.4M due to an increase in device repair costs and server costs, partially offset by an increase in revenue.

● Operating income in Q1 FY26 of $0.8M increased compared to the operating income of $0.1M in Q1 FY25. The increase in net income in Q1 FY26 is primarily due to an increase revenue and a gain on dissolution of our Israeli subsidiary.

● Adjusted EBITDA for Q1 FY26 of $1.21M, decreased compared to $1.25M for Q1 FY25 due to an increase in cost of revenue. Adjusted EBITDA in Q1 FY26 as a percentage of revenue decreased to 13.4%, compared to 14.4% for Q1 FY25 for the same reason.

● Unrestricted cash balance of $3.6M for Q1 FY26 decreased compared to $4.1M for Q1 FY25. The change in cash position was principally due to increased capitalized software costs.

● Net income attributable to shareholders in FY26 was $0.5M compared to net loss of ($2.0M) in FY25, a change principally attributable to an increase in operating income and positive currency exchange rate movements.

-1-

Business Outlook

Growth in revenue and operating income in Q1 FY26 reinforces our confidence in strategic reinvestment in technology and the implementation of new programs. These endeavors position us well for sustained growth throughout FY26. As a result, the Company's preliminary outlook for FY26 is as follows: 

		Actual								Outlook
		FY 2024				FY 2025				FY 2026
Revenue:			$36.9M				$35.2M			$38M - $39M
Adjusted EBITDA Margin:			14.6%				16.4%			18% - 19%

About Track Group, Inc.

Track Group designs, manufactures, and markets location tracking devices; as well as develops and sells a variety of related software, services, and accessories, networking solutions, and monitoring applications. The Company's products and services are designed to empower professionals in security, law enforcement, corrections, and rehabilitation organizations worldwide with single-sourced offender management solutions that integrate reliable intervention technologies to support re-socialization and monitoring initiatives.

The Company currently trades under the ticker symbol "TRCK" on the OTCQB exchange. For more information, visit www.trackgrp.com.

Forward-Looking Statements

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "if", "should" and "will" and similar expressions as they relate to Track Group, Inc., and subsidiaries ("Track Group") are intended to identify such forward-looking statements. These statements are only predictions and reflect Track Group's current beliefs and expectations with respect to future events and are based on assumptions and subject to risks and uncertainties and subject to change at any time. Track Group may from time-to-time update these publicly announced projections, but it is not obligated to do so. Any projections of future results of operations should not be construed in any manner as a guarantee that such results will in fact occur. These projections are subject to change and could differ materially from final reported results. For a discussion of such risks and uncertainties, see "Risk Factors" in Track Group's annual report on Form 10-K, its quarterly report on Form 10-Q, and its other reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended. New risks emerge from time to time. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made.

Non-GAAP Financial Measures

This release includes financial measures defined as “non-GAAP financial measures” by the Securities and Exchange Commission including non-GAAP EBITDA. These measures may be different from non-GAAP financial measures used by other companies. The presentation of this financial information, which is not prepared under any comprehensive set of accounting rules or principles, is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with generally accepted accounting principles. Reconciliations of these non-GAAP financial measures are based on the financial figures for the respective period.

Non-GAAP Adjusted EBITDA excludes items included but not limited to interest, taxes, depreciation, amortization, impairment charges, gains and losses, currency effects, one-time charges or benefits that are not indicative of operations, charges to consolidate, integrate or consider recently acquired businesses, costs of closing facilities, stock based or other non-cash compensation or other stated cash and non-cash charges (the “Adjustments”).

The Company believes the non-GAAP measures provide useful information to both management and investors when factoring in the Adjustments. Specific disclosure regarding the Company’s financial results, including management’s analysis of results from operations and financial condition, are contained in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2025, and other reports filed with the Securities and Exchange Commission. Investors are encouraged to carefully read and consider such disclosure and analysis contained in the Company’s Form 10-K and other reports, including the risk factors contained in such Form 10-K.

-2-

TRACK GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

		(Unaudited)
		December 31,				September 30,
		2025				2025
Assets
Current assets:
Cash		$	3,558,464			$	4,098,114
Accounts receivable, net of allowance for credit losses of $738,201 and $596,059, respectively			6,121,955				6,455,910
Prepaid expense and deposits			320,422				353,319
Inventory, net of reserves of $82,736 and $61,535, respectively			478,570				473,464
Total current assets			10,479,411				11,380,807
Property and equipment, net of accumulated depreciation of $303,173 and $294,873, respectively			528,580				497,889
Monitoring equipment, net of accumulated depreciation of $6,202,150 and $5,896,304, respectively			4,759,049				5,104,603
Intangible assets, net of accumulated amortization of $22,205,298 and $21,616,041, respectively			14,527,807				13,958,773
Goodwill			8,360,264				8,299,941
Other assets, net			1,015,693				1,061,507
Total assets		$	39,670,804			$	40,303,520
Liabilities and Stockholders’ Equity (Deficit)
Current liabilities:
Accounts payable		$	3,698,724			$	3,709,653
Accrued liabilities			4,620,486				4,886,603
Total current liabilities			8,319,210				8,596,256
Long-term debt, net of current portion			42,741,380				42,720,944
Long-term liabilities			476,773				529,265
Total liabilities			51,537,363				51,846,465
Stockholders’ equity (deficit):
Common stock, $0.0001 par value: 30,000,000 shares authorized; 11,863,758 and 11,863,758 shares outstanding, respectively			1,186				1,186
Preferred stock, $0.0001 par value: 20,000,000 shares authorized; 0 shares outstanding			-				-
Series A Convertible Preferred stock, $0.0001 par value: 1,200,000 shares authorized; 0 shares outstanding			-				-
Paid in capital			302,600,546				302,600,546
Accumulated deficit			(314,632,423	)			(315,147,082	)
Accumulated other comprehensive income (loss)			164,132				1,002,405
Total equity (deficit)			(11,866,559	)			(11,542,945	)
Total liabilities and stockholders’ equity (deficit)		$	39,670,804			$	40,303,520

-3-

TRACK GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME/(LOSS)

(Unaudited)

		Three Months Ended December 31,
		2025				2024
Revenue:
Monitoring and other related services		$	8,707,758			$	8,441,307
Product sales and other			409,450				227,021
Total revenue			9,117,208				8,668,328
Cost of revenue:
Monitoring, products and other related services			4,071,614				3,508,762
Depreciation & amortization included in cost of revenue			777,887				735,224
Total cost of revenue			4,849,501				4,243,986
Gross profit			4,267,707				4,424,342
Operating expense:
General & administrative			2,229,896				2,431,118
Selling & marketing			958,953				901,189
Research & development			694,143				669,391
Depreciation & amortization			228,034				227,553
(Gain) loss on sale/dissolution of subsidiary			(630,472	)			66,483
Total operating expense			3,480,554				4,295,734
Operating income			787,153				128,608
Other income (expense):
Interest income			1,078				2,839
Interest expense			(628,612	)			(571,798	)
Currency exchange rate gain (loss)			422,855				(1,499,262	)
Total other income (expense)			(204,679	)			(2,068,221	)
Income (loss) before income taxes			582,474				(1,939,613	)
Income tax expense			67,815				71,236
Net income (loss) attributable to common stockholders			514,659				(2,010,849	)
Release of cumulative translation adjustment for sale/dissolution of subsidiary			(582,883	)			1,390,913
Equity adjustment for sale of subsidiary			-				571,518
Foreign currency translation adjustments			(255,390	)			771,769
Comprehensive income (loss)		$	(323,614	)		$	723,351
Net income (loss) per share – basic
Net income (loss) per common share		$	0.04			$	(0.17	)
Weighted average common shares outstanding			11,863,758				11,863,758
Net income (loss) per share – diluted
Net income (loss) per common share		$	0.04			$	(0.17	)
Weighted average common shares outstanding			11,863,758				11,863,758

-4-

TRACK GROUP, INC. AND SUBSIDIARIES

NON-GAAP ADJUSTED EBITDA DECEMBER 31 (UNAUDITED)

(amounts in thousands, except share and per share data)

		Three Months Ended December 31,
		2025				2024
Non-GAAP Adjusted EBITDA
Net income (loss) attributable to common shareholders		$	515			$	(2,011	)
Interest expense, net			628				569
Depreciation and amortization			1,006				963
Income taxes (1)			68				71
Board compensation and stock-based compensation			50				75
Foreign exchange expense (gain)			(423	)			1,499
(Gain) loss on sale/dissolution of subsidiary			(630	)			66
Other charges (2)			5				18
Total Non-GAAP Adjusted EBITDA		$	1,219			$	1,250
Non-GAAP Adjusted EBITDA, percent of revenue			13.4	%			14.4	%
Non-GAAP earnings per share – basic:
Weighted average common shares outstanding			11,863,758				11,863,758
Non-GAAP earnings per share		$	0.10			$	0.11
Non-GAAP earnings per share – diluted:
Weighted average common shares outstanding			11,863,758				11,863,758
Non-GAAP earnings per share		$	0.10			$	0.11

(1) Currently, the Company has significant U.S. tax loss carryforwards that may be used to offset future taxable income, subject to IRS limitations. However, the Company is still subject to certain state, commonwealth, and other foreign based taxes.

(2) Other charges are expenses related to the board of directors and severance.

-5-

FAQ

How did Track Group (TRCK) perform financially in Q1 FY26?

Track Group reported Q1 FY26 revenue of $9.1M, about 5.2% higher than Q1 FY25. Operating income increased to $0.8M from $0.1M, and net income attributable to common shareholders improved to a $0.5M profit versus a $2.0M loss a year earlier.

What FY26 outlook did Track Group (TRCK) provide for revenue and margins?

Track Group’s preliminary FY26 outlook calls for $38M–$39M in revenue, compared with $35.2M in FY25. The company also projects an Adjusted EBITDA margin of 18%–19%, up from 16.4% in FY25, indicating plans for higher profitability.

How did Track Group’s non-GAAP Adjusted EBITDA trend in Q1 FY26?

Non-GAAP Adjusted EBITDA in Q1 FY26 was $1.2M, slightly below the prior year’s $1.25M. Adjusted EBITDA margin declined to 13.4% from 14.4%, reflecting cost pressures even as operating income and net income improved significantly year over year.

What does the Q1 FY26 balance sheet show about Track Group’s leverage?

As of December 31, 2025, Track Group reported $39.7M in total assets and approximately $42.7M in long-term debt. Total equity was a deficit of about $11.9M, indicating a leveraged capital structure and ongoing negative stockholders’ equity despite recent profitability.

Did Track Group (TRCK) improve gross profit and operating expenses in Q1 FY26?

Gross profit in Q1 FY26 was $4.27M, slightly below $4.42M in Q1 FY25 as costs increased. However, total operating expenses declined to $3.48M from $4.30M, aided by a gain on sale or dissolution of a subsidiary, supporting higher operating income.

What were Track Group’s earnings per share metrics for Q1 FY26?

For Q1 FY26, Track Group reported basic and diluted GAAP EPS of $0.04 per common share, compared with a loss of $0.17 per share in Q1 FY25. Non-GAAP basic and diluted earnings per share were both $0.10, versus $0.11 a year earlier.

Filing Exhibits & Attachments

5 documents

Press Releases

• EX-99.1 EXHIBIT 99.1 180.2 KB

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA 3.5 KB
• EX-101 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE 10.1 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE 13.5 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE 10.1 KB