10-Q: Cleartronic Reports Q2 2026 Results: Revenue Up, Net Income Positive

Cleartronic, Inc. announced its Q2 2026 financial results, showing an 18.6% increase in revenue and a shift to net income compared to the prior year's loss.

Summary

• Cleartronic, Inc. reported revenue of $1,133,502 for the three months ended March 31, 2026, an 18.6% increase from $955,703 in the same period of 2025.
• For the six months ended March 31, 2026, revenue grew 24.1% to $2,386,041 from $1,923,027 in the prior year.
• The company achieved a net income of $63,771 for the three months ended March 31, 2026, a significant improvement from a net loss of $28,092 in the same period of 2025.
• Net income attributable to common stockholders was $53,652 for the three months ended March 31, 2026, compared to a net loss of $38,210 in the prior year.
• For the six months ended March 31, 2026, net income attributable to common stockholders was $238,115, a substantial increase from a net loss of $97,678 in the same period of 2025.
• Total assets decreased to $1,538,936 as of March 31, 2026, from $1,606,538 as of September 30, 2025.
• Total liabilities decreased to $1,637,009 as of March 31, 2026, from $1,963,188 as of September 30, 2025.
• Stockholders' deficit improved to $98,073 as of March 31, 2026, from $356,650 as of September 30, 2025.

Sentiment

Score: 6

Explanation: StockSavvy.ai views this as a moderately positive filing due to the significant revenue growth and the transition to profitability, but tempered by the continued stockholders' deficit and low R&D investment.

Positives

• Revenue increased by 18.6% to $1,133,502 for the three months ended March 31, 2026, driven by growth in ReadyOp and Alastar platform revenues and increased hardware sales.
• Revenue for the six-month period increased by 24.1% to $2,386,041.
• The company reported a net income of $63,771 for the three months ended March 31, 2026, a positive turnaround from a net loss in the prior year.
• Net income attributable to common stockholders was $53,652 for the three-month period, a significant improvement from a net loss of $38,210 in the prior year.
• For the six-month period, net income attributable to common stockholders was $238,115, a substantial increase from a net loss of $97,678.
• Operating expenses increased by a modest 5.3% for the three-month period and 8.0% for the six-month period, indicating cost management alongside revenue growth.
• Interest income increased by 56.3% for the three-month period and 66.2% for the six-month period, contributing to overall income.
• Stockholders' deficit significantly improved, decreasing from $356,650 to $98,073.

Negatives

• Cost of revenue increased by 26.1% for the three-month period, outpacing gross profit growth.
• Total assets decreased from $1,606,538 to $1,464,756 for current assets and $1,538,936 to $1,606,538 for total assets.
• Deferred revenue decreased by $348,172 for the six-month period, indicating a reduction in future recognized revenue.
• The company continues to have a significant stockholders' deficit of $98,073.
• Accounts receivable increased by $11,602 for the six-month period, which, combined with a decrease in deferred revenue, impacts cash flow from operations.
• The company's disclosure controls and procedures were found to be not effective due to limited personnel and challenges in achieving complete segregation of duties.

Risks

• Interruption of adequate supply of components, primarily computer chips, to the manufacturing source presents additional risk.
• The current worldwide shortage of computer chips limits the ability to supply proprietary radio gateways.
• As of March 31, 2026, three customers accounted for more than 10% of the Company's total outstanding accounts receivable.
• As of September 30, 2025, two customers accounted for more than 10% of the Company's total outstanding accounts receivable.
• The company is subject to risks associated with its exclusive licensing agreement with the University of South Florida Research Foundation, Inc., including royalty payments and potential equity purchase rights for USFRF in future offerings.

Future Outlook

The company's forward-looking statements indicate expectations for changes in revenues and profitability, prospective business opportunities, and its strategy for financing its business. However, these statements are subject to risks and uncertainties, and actual results may differ materially.

Management Comments

• Management believes that its estimates for the allowance for credit losses are based on significant estimates and that changes in facts and circumstances could result in material changes.
• Management evaluates the recoverability of intangible assets and long-lived assets when events or circumstances indicate potential impairment.
• Management concluded that the Company's disclosure controls and procedures are not effective due to limited personnel and challenges in achieving complete segregation of duties.
• Management intends to take appropriate and reasonable steps to improve internal controls as resources become available.
• Management is unaware of any claims or complaints that could result in future litigation.

Industry Context

StockSavvy.ai notes that Cleartronic's performance in the software and technology sector, particularly with its SaaS offerings like ReadyOp, aligns with broader industry trends of increasing demand for integrated communication and operational management platforms. The growth in revenue, especially from software licensing, reflects this trend, though the company faces challenges common in the industry, such as supply chain disruptions for hardware components.

Comparison to Industry Standards

• The revenue growth of 18.6% for the quarter and 24.1% for the six months is strong compared to the average growth rates seen in the broader enterprise software market, which can fluctuate but often hovers in the mid-to-high single digits.
• The shift to profitability is a positive indicator, though the company's overall financial health is still impacted by a stockholders' deficit, which is less common among established, large-cap software companies.
• The company's reliance on a single subsidiary, ReadyOp Communications, Inc., for all current operations is a common structure for smaller, focused technology firms, but differs from more diversified industry players.
• The company's approach to revenue recognition and deferred revenue is in line with ASC 606 standards, which is the industry standard for software and service providers.
• The company's R&D spending of $2,000-$4,000 per quarter is very low compared to industry benchmarks, where significant investment in R&D is typical for software companies aiming for innovation and competitive advantage. For example, companies like Microsoft or Salesforce invest billions annually in R&D.

Corporate Governance

Legal Proceedings

• Cleartronic is not engaged in any litigation at the present time and management is unaware of any claims or complaints that could result in future litigation.

Related Party Transactions

• During the three and six months ended March 31, 2026 and 2025, the Company paid $9,000 and $18,000, respectively, to a related party consultant.

Stakeholder Impact

• Shareholders: Positive impact from the increase in revenue and shift to net income, though the continued stockholders' deficit remains a concern.
• Employees: Potential for increased stability and growth opportunities due to improved financial performance, but also potential challenges related to the effectiveness of internal controls.
• Customers: Continued access to ReadyOp, ReadyMed, and Alastar platforms, with ongoing enhancements planned for Alastar functionality.
• Suppliers: Potential for increased business as revenue grows, but risks associated with chip shortages could impact hardware component supply.

Next Steps

• Continue to support existing Alastar clients and add new clients.
• Transition Alastar functionality into the ReadyOp platform and enhance capabilities for existing and new clients over the next two years.
• Management intends to take appropriate and reasonable steps to improve disclosure controls and procedures as resources become available.

Key Dates

Recommendation

The company shows positive revenue growth and a return to profitability, which is encouraging. However, the persistent stockholders' deficit, low R&D investment, and identified weaknesses in internal controls suggest caution. While the trend is positive, further sustained performance and improvements in financial structure and controls are needed to warrant a stronger recommendation.

Keywords

Cleartronic, Form 10-Q, Quarterly Report, ReadyOp, ReadyMed, Alastar, AudioMate, Software as a Service, SaaS, Revenue Growth, Net Income, Financial Results