ROC Revenue Reaches $8.0 Million in Third Quarter, Up 50% Year Over Year
Key Facts
The company said in results released on November 12 that it achieved quarterly profitability, after posting a net loss in the year-earlier period. The results came amid higher product and government-contract revenue, alongside an improvement in gross margin. This reflects growth in the company’s business, while operating expenses and accounts receivable also increased during the period. (f1, T01, T02)
Product revenue totaled $5.7 million, up 24% from $4.6 million a year earlier. ROC attributed the performance mainly to growth in ROC ABIS and continued expansion of ROC SDK, while a decline in ROC Watch following the end of a major government project partly offset the increase. ROC SDK recorded revenue of $2.6 million, up 52% year over year. ROC ABIS generated $2.2 million, up 654% year over year. The figures highlight the differing sources of growth across the company’s products during the quarter. (f3, f4)
Revenue from government research and development contracts rose to $2.2 million, up 175% from the year-earlier period. The company linked the increase to expanded activity in a U.S. government research and development program that began in the second quarter of 2026. It also said stronger contract revenue reflected improved activity in government programs and broader marketing of its Vision AI platform. The chief executive added that these developments “give us greater confidence in the expected acceleration in revenue during the second half of 2026.” The expansion puts government contracts alongside software licenses as drivers of quarterly performance. (f5, T04)
Gross margin was 90%, compared with 79% in the third quarter of 2025, marking the second consecutive quarter the company has recorded this margin level. ROC attributed the improvement mainly to a favorable revenue mix, with a higher share of software licenses, including a major federal license for the ROC ABIS platform. Meanwhile, operating expenses rose to $6.6 million from $4.3 million a year earlier. The company said the increase was mainly due to planned investments in personnel, operations, infrastructure and Vision AI technology development, as well as costs related to the acquisition of ZTC. Revenue growth and margin improvement therefore came alongside higher operating spending during the period. (f6, f8)
Accounts receivable rose to $11.1 million on September 30, 2026, from $5.6 million on June 30. The company attributed the increase mainly to higher revenue and the timing of customer billing. On contracts, ROC disclosed an agreement with the Executive Office for U.S. Attorneys to develop and support a digital evidence review platform. The contract’s total potential value is $64.3 million over eight years, but the committed base period runs for one year and is valued at approximately $7.4 million. The other seven years are annual option periods, so their potential value does not represent guaranteed revenue for the company.
The company also signed its first strategic federal contract for the ROC ABIS platform, with a potential value of $5.1 million over five years, including approximately $2.5 million in committed contract value. ROC said the Department of Justice contract will add more significant revenue in the fourth quarter of 2026, with its impact continuing through the third quarter of 2027. The contract’s base period runs from September 22, 2026, to September 21, 2027. The company had announced that its quarterly results would be released after the market close on November 12, and scheduled a management conference call for 4:30 p.m. Eastern time that day. (f12, f13, f14)