TaoWeave posts $1.543 million third-quarter net profit, boosted by digital asset gain
Key Facts
TaoWeave reported net income of $1.543 million in the third quarter of 2026, compared with a net loss of $2.290 million in the same period a year earlier, according to its quarterly filing with the U.S. Securities and Exchange Commission. Net income attributable to common shareholders was $1.539 million. The turnaround came as quarterly revenue fell to $513,000 from $601,000, a decline of $88,000, or 15%. But the net profit did not reflect a return to operating profitability, as the company posted an operating loss of $471,000. The unrealized gain on digital assets was the main driver of net income.
The unrealized gain on digital assets was $2.484 million in the third quarter, following an unrealized loss of $1.517 million in the same quarter of 2025. TaoWeave also recorded a realized loss of $475,000 on digital assets during the quarter. These items show that the net result was affected by changes in the value of digital holdings, alongside ongoing business results. The operating loss narrowed to $471,000 from $802,000 a year earlier.
Revenue from managed services, the largest revenue component cited in the filing, fell to $444,000 from $490,000, a 9% year-over-year decline. The company attributed the decrease mainly to service interruptions at some customer sites. Revenue in the segment was concentrated in one customer, which accounted for 93% of managed services revenue in the quarter. Despite the revenue decline, the segment’s gross margin rose to 40% from 30% in the year-earlier quarter. The company said the improvement was mainly due to lower employee expenses during the quarter.
Revenue from collaboration products fell to $3,000 in the third quarter from $14,000 a year earlier, a 79% decline. The company linked the drop to its announcement that the Mezzanine products would reach end of life in December 2025. TaoWeave expects no product revenue, apart from minimal maintenance revenue, for the rest of 2026. For the first nine months of the year, revenue was $1.742 million, compared with $1.815 million in the same period. The net loss for those months was $50,000, versus $3.567 million a year earlier.
As of September 30, 2026, the company had $3.027 million in cash and cash equivalents, $3.764 million in digital assets and working capital of $5.975 million. It said in its filing that it expects cash and the value of TAO, if converted to cash, to fund operations for at least 12 months from the report date. It held about 12,519.27 TAO tokens, with a fair value of about $3.764 million on that date. TAO represented about 46% of total assets, including cash. The value of this holding is therefore an important part of the financial picture presented by the company, alongside its cash balance.
TaoWeave plans to market the Manako platform in the United States and Canada during 2027 under a non-exclusive licensing and distribution agreement. It had invested $1 million in Manako through a SAFE agreement, according to the quarterly filing. The plan follows a net loss of $3.290 million in the second quarter of 2026, compared with a loss of $605,000 in the second quarter of 2025. The company had also reported net income of $1.7 million in the first quarter, driven by an unrealized gain of $2.2 million on TAO holdings. In trading on November 13, TWAV shares closed at $1.23.