Tantalus Posts EPS of $0.02 and Revenue of $12.9 Million in Third Quarter
Key Facts
Tantalus Systems reported results on November 11 for the three months ended September 30, 2026, posting net income of $1.4 million and diluted earnings per share of $0.02. The company said income and earnings per share included a benefit of about $1.2 million from refunds under the International Emergency Economic Powers Act (IEEPA). Reported revenue was $12.9 million, after a reduction of about $1.4 million related to credits the company said it expects to provide to eligible customers. Excluding the effect of tariff refunds, adjusted revenue was $14.3 million. The company said amounts in the results announcement are in U.S. dollars unless otherwise stated.
The company received about $2.6 million in tariff refunds during the quarter and recorded about $2.5 million of them as a reduction in cost of sales, while $0.1 million was recorded as interest income. These items contributed a net benefit of about $1.1 million to gross profit. This puts reported earnings per share in the context of tariff refund amounts that affected the period's results, as well as revenue and cost of sales. Adjusted gross margin was 56.0%, excluding the effect of refunds. The company said this margin increased 110 basis points from the same period a year earlier.
Adjusted connected devices revenue was $9.2 million, in line with the level in the year-earlier period. The company attributed shipment movements to meter availability, production capacity allocation and manufacturing delays, and said a large customer requested that shipments be moved to 2027. By contrast, software and services revenue rose 4% to $5.1 million. Recurring revenue rose 14% to $3.9 million during the quarter. It accounted for 27% of adjusted revenue, compared with 24% in the year-earlier period, with the company attributing the increase to software license activations, maintenance, hosting and TRUGrid services.
Annual recurring revenue rose 14% to a record $15.4 million as of September 30, 2026. On orders, the company said 92 utilities had ordered the TRUSense gateway, and 53 had moved beyond the pilot stage, while more than 10,800 gateways had shipped as of the announcement date. It added 11 new utilities during the quarter. In the first nine months of 2026, orders converted from the sales pipeline totaled $40.1 million, and the company reported a 0.90 times book-to-bill ratio under its measure. These figures provide context for order activity alongside the deferral of some hardware shipments to 2027.
Available liquidity was about $33.3 million, including $21.3 million in cash and about $12.0 million available under the credit facility. The company said it repaid the full balance of its EDC loan, about $6.0 million, plus accrued interest. At the same time, it recorded an operating cash outflow of about $1.1 million during the quarter. It attributed this mainly to working capital changes, an investment of about $1.3 million in component inventory, and a seasonal change of about $3.1 million in deferred revenue. TGMPF shares closed at $3.21 on November 11, within a daily range of $3.11 to $3.21, after closing at $3.15 in the previous session.
Tantalus was scheduled to hold a conference call to discuss the results on November 12, 2026, at 10:00 a.m. Eastern time. This followed the results announcement on November 11, as the company detailed the quarter ended September 30. In August 2026, Tantalus and Calix announced a collaboration to deliver fiber-based AMI solutions to municipal utilities and electric cooperatives. Tantalus said at the time that more than 200 electric cooperatives in North America were working to deploy fiber networks. The collaboration provides a backdrop to the company's activity in utility and network solutions, alongside the expansion of its TRUSense gateway base.