10-Q: CISO Global Q1 2026: Revenue Decline, Net Loss Improvement

CISO Global reported a Q1 2026 net loss of $1.59 million, an improvement from the prior year, despite a 13% decrease in total revenue.

Summary

• CISO Global's Q1 2026 revenue was $6.22 million, a decrease of 13% compared to $7.16 million in Q1 2025, primarily driven by a decline in security managed services.
• The company reported a net loss of $1.59 million for Q1 2026, an improvement from a net loss of $5.38 million in Q1 2025.
• Gross profit increased slightly to $1.82 million in Q1 2026 from $1.78 million in Q1 2025.
• Operating expenses decreased by 6.4% to $3.27 million in Q1 2026 from $3.49 million in Q1 2025, largely due to reduced stock-based compensation and lower selling, general, and administrative expenses.
• The company continues to face substantial doubt regarding its ability to continue as a going concern, with a working capital deficit of $5.52 million as of March 31, 2026.
• CISO Global is actively seeking additional capital through equity and debt financing to fund operations and meet upcoming obligations, including a significant redemption of Series B Preferred Stock.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this filing as negative due to declining revenues, a widening working capital deficit, and significant going concern risks, despite an improvement in net loss.

Positives

• Net loss improved significantly to $1.59 million in Q1 2026 from $5.38 million in Q1 2025.
• Gross profit saw a modest increase of $42,505 to $1.82 million in Q1 2026.
• Total cost of revenue decreased by 18.3% to $4.40 million in Q1 2026, driven by lower security managed services costs and reduced stock-based compensation.
• Operating expenses decreased by 6.4% to $3.27 million in Q1 2026, aided by lower stock-based compensation and reduced SG&A expenses.
• Cybersecurity software revenue increased by 32% to $195,006 in Q1 2026, indicating growth in this product area.

Negatives

• Total revenue decreased by 13.1% to $6.22 million in Q1 2026 from $7.16 million in Q1 2025.
• Security managed services revenue, the largest segment, decreased by 14% to $5.54 million in Q1 2026.
• The company has a substantial going concern doubt due to ongoing losses and negative cash flows.
• Working capital deficit increased to $5.52 million as of March 31, 2026, from $4.47 million as of December 31, 2025.
• Cash and cash equivalents decreased significantly to $640,075 as of March 31, 2026, from $1.70 million as of December 31, 2025.

Risks

• Substantial doubt exists about the company's ability to continue as a going concern.
• The company may be unable to access further equity or debt financing when needed.
• The company is obligated to redeem remaining Series B Preferred Stock with monthly payments totaling $1.87 million over eleven months, increasing near-term liquidity needs.
• Failure to regain compliance with Nasdaq's minimum bid price requirement by June 29, 2026, could lead to delisting.
• Continued customer attrition or delays in onboarding new customers could materially impact revenue and liquidity.
• The company's public float limitations may restrict its ability to raise capital under its shelf registration statement.

Future Outlook

The company's ability to fund ongoing operations is highly dependent on raising additional capital through equity or debt financing. There is substantial doubt about the company's ability to continue as a going concern. The company may be unable to access further financing when needed. The company intends to satisfy the Series B Preferred Stock redemption through operating cash flows and additional financing.

Management Comments

• We believe that culture is the foundation of every successful cybersecurity and compliance program.
• We continually seek to identify and acquire cybersecurity talent to expand our service scope and geographical coverage to provide the best possible service for our clients.
• Our goal is to create a culture of security and to help quantify, define, and capture a return on investment from information technology and cybersecurity spending.
• We intend to actively monitor the bid price of our Common Stock and our minimum market value of listed securities and will consider options available to us to achieve compliance with the Nasdaq listing rules.

Industry Context

StockSavvy.ai notes that CISO Global operates in the highly competitive cybersecurity market, characterized by a chronic lack of skilled professionals. The company's strategy of remaining technology-agnostic and focusing on accumulating topic experts aims to differentiate it from specialized firms. However, the reported revenue decline in managed services and the ongoing going concern issues highlight the challenges in scaling and maintaining profitability in this sector.

Comparison to Industry Standards

• The cybersecurity industry generally experiences strong demand due to increasing cyber threats. Companies with robust recurring revenue models and strong customer retention typically show consistent revenue growth.
• Competitors in the managed security services space often focus on specific technologies or offer integrated platforms, whereas CISO Global emphasizes a technology-agnostic approach with expert talent.
• The industry standard for companies facing Nasdaq minimum bid price issues often involves a reverse stock split to regain compliance, a strategy CISO Global is considering.
• The significant interest rates on some of CISO Global's past debt (e.g., 18% on the 2025 Loan and Security Agreement, and over 100% on some term loans and convertible notes) are considerably higher than typical industry benchmarks for established companies, indicating higher financial risk.

Legal Proceedings

• There are no material pending legal proceedings in which the company or any of its subsidiaries is a party.

Related Party Transactions

• Managed Services Agreement with Hensley Beverage Company, generating $515,967 in revenue for Q1 2026, with Mr. McCain (a director) as CEO of Hensley.
• Convertible Note Payable with Hensley & Company, principal and interest converted to Series A Preferred Stock in August 2025.
• Exchange Agreements with Hensley & Company and JC Associates, Inc. for conversion of convertible notes into Series A Preferred Stock.

Stakeholder Impact

• Shareholders face continued uncertainty regarding the company's going concern status and potential Nasdaq delisting.
• Creditors and lenders face increased risk due to the company's liquidity challenges and reliance on future financing.
• Employees may face uncertainty regarding job security given the company's financial situation and potential restructuring.
• Customers may experience service continuity concerns due to the company's financial instability.

Next Steps

• Regain compliance with Nasdaq's minimum bid price requirement by June 29, 2026.
• Secure additional capital through equity or debt financing to fund operations and meet redemption obligations.
• Continue to monitor and manage customer retention and pipeline development.
• Evaluate options to achieve compliance with Nasdaq listing rules, potentially including a reverse stock split.

Key Dates

Recommendation

While the net loss has improved, the significant revenue decline, widening working capital deficit, and substantial going concern risks, including potential Nasdaq delisting and the need for immediate financing to meet redemption obligations, present considerable downside. However, the company's strategic focus on cybersecurity and potential for future capital raises warrant a hold rating pending clearer signs of operational stabilization and successful financing.

Keywords

CISO Global, 10-Q Filing, Quarterly Report, Cybersecurity, Managed Services, Financial Results, Going Concern, Nasdaq Compliance