DataMEDS Posts $10.536 Million Net Income Despite Third-Quarter Operating Loss
Key Facts
DataMEDS AI reported net income of $10.536 million for the quarter ended September 30, 2026, compared with a net loss of $34.318 million in the same period last year, according to its filing with the U.S. Securities and Exchange Commission. The company, however, posted an operating loss of $3.374 million for the quarter, making net income distinct from the results of its operating activity. The company attributed the net result primarily to a non-cash gain from debt extinguishment. It announced the results on November 13, and its shares, MEDS, closed at $0.7439 that day. Diluted earnings per share were also $2.72, compared with a loss of $23.07 per share in the third quarter of 2025.
Quarterly revenue was $2.669 million, down 11.4% from $3.013 million in the corresponding quarter of 2025. The company said the decline in distribution revenue was linked to liquidity constraints that limited its ability to purchase products and fulfill orders. Pharmacy business growth offset part of the decline in distribution, the company said, but did not prevent an overall year-over-year revenue decline.
Gross profit was $431,880, compared with $231,012 a year earlier, while the gross margin rose to 16.2% from 7.7%. For the nine months ended September 30, the company reported revenue of $6.008 million, down 72.3% from $21.667 million in the corresponding period of 2025. The report said the comparison was affected by stock-based compensation expense in 2025 and a debt-extinguishment gain in 2026.
The non-cash gain from debt extinguishment was $19.065 million, while the company recorded a loss of $3.606 million from extinguishing vendor liabilities. The report linked the debt-extinguishment gain to a settlement with Wellgistics sellers on September 11, 2026. Under the settlement, the company paid $450,000 in cash, and principal debt of $17.5 million and accrued interest of $1.687 million were extinguished. This resulted in the recognition of the gain, which primarily affected quarterly net income. These items showed that the net figure included a large non-cash accounting impact alongside the reported operating loss.
The company also reported convertible notes with gross principal of $21.687 million among current liabilities, along with other debt obligations due within 12 months. The report said these conditions raise substantial doubt about the company’s ability to continue as a going concern for one year after the financial statements were issued. Management is seeking additional funding sources, including equity financing, debt arrangements and strategic transactions, but the report said there is no assurance that financing or transactions will be available on acceptable terms. In contrast, the company announced on October 19 that it had regained full compliance with Nasdaq listing standards, including the net equity requirement.
On commercial expansion, the company said it signed a non-binding memorandum of understanding with a Florida health insurer to deploy the Health Lives Here app to more than 25,000 members. The company expects to enter into definitive agreements during the fourth quarter of 2026. The interim co-CEO said Corexa Pharmacy led a 50% quarter-over-quarter increase in revenue. He added that the company expects growth to continue in the fourth quarter with the addition of medical foods and diagnostic laboratory testing. These commercial steps, alongside funding and liquidity needs, are central to monitoring the company’s performance in the coming period.