10-Q: QuoteMedia Reports Q1 2026 Results: Revenue Up 15%

QuoteMedia, Inc. announced its first quarter 2026 financial results, showing a 15% increase in total revenue to $5.53 million, driven by growth in its Portfolio Management Systems and Interactive Content and Data APIs.

Summary

• Total revenue for the first quarter ended March 31, 2026, increased by 15% to $5,530,272, compared to $4,824,356 in the same period of 2025.
• Gross profit rose by 19% to $2,518,067, with a gross margin improvement to 46% from 44% in the prior year.
• Operating expenses increased by 23% to $3,142,953, primarily due to a 42% surge in software development expenses.
• The company reported a net loss of $620,612 for the quarter, an increase from the $499,811 net loss in Q1 2025.
• Cash and cash equivalents increased to $521,684 as of March 31, 2026, from $319,889 at the end of 2025, with net cash provided by operating activities at $384,672.
• The company identified material weaknesses in its internal control over financial reporting, specifically a lack of segregation of duties in financial reporting.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a negative sentiment due to the widening net loss and increased operating expenses, despite revenue growth. The material weaknesses in internal controls also contribute to a cautious outlook.

Positives

• Revenue increased by 15% to $5,530,272 in Q1 2026 compared to Q1 2025.
• Gross profit increased by 19% to $2,518,067.
• Gross margin improved to 46% from 44% in the prior year's comparable quarter.
• Corporate Quotestream revenue saw a significant 17% increase.
• Interactive Content and Data APIs revenue grew by 16%.
• Cash and cash equivalents increased by $201,795 to $521,684.
• Net cash provided by operating activities was $384,672 for the quarter.

Negatives

• Net loss widened to $620,612 in Q1 2026 from $499,811 in Q1 2025.
• Operating expenses increased by 23% to $3,142,953.
• Software development expenses increased by 42% due to lower capitalization of costs.
• General and administrative expenses increased by 17%.
• The company reported material weaknesses in its internal control over financial reporting.

Risks

• Adverse macroeconomic conditions, including inflation, slower growth or recession, and higher interest rates, could materially adversely affect demand for the Company's services.
• New tariffs proposed by the U.S. government could lead to a general slowdown in economic activity, negatively impacting the business.
• Events in the Middle East and Ukraine could continue to cause disruptions in global financial markets, potentially impacting the business.
• Uncertainty caused by the recent market downturn and rising inflation may result in some clients delaying purchasing decisions, product and service implementations, or reducing spending.
• There is no assurance that additional capital will be available on commercially reasonable terms or at all if required to execute the business plan.
• Current adverse capital and credit market conditions could limit access to capital, and the company may be unable to raise capital or bear an unattractive cost of capital.

Future Outlook

The company expects similar revenue growth for the remainder of fiscal 2026. The impact of expensing development costs is expected to diminish over time, and the bottom line is expected to improve without the non-recurring expenses noted. The company plans to continue expanding its product lines, improving infrastructure, adding features and data, and leveraging AI tools. Focus remains on marketing Quotestream, expanding into the investment professional market, and growing Data Feed Services. Important development projects include expanding data and news coverage, adding international exchange data, video feeds, fixed-income coverage, and new market information products. New deployments of trade integration capabilities are underway. The company is also creating new proprietary data sets and analytics.

Management Comments

• Our revenue increased 15% in Q1 2026 versus the comparative 2025 quarter. Based on revenue already under contract we expect similar revenue growth for the remainder of fiscal 2026.
• Our development cost expense significantly increased this quarter due to a higher percentage of development salaries being expensed rather than capitalized, as more development time was spent on system maintenance and other development activities that did not meet the criteria for capitalization.
• We expect this trend to continue for the remainder of 2026, although its impact will diminish over time.
• We incurred some one-time expenses totaling approximately $230,000 during the quarter (see Cost of Revenue discussion below), which, along with the impact of capitalized development costs, significantly impacted our net loss for the quarter.
• For the remainder of fiscal 2026 we expect our bottom line to improve without the non-recurring expense noted above and the impact of capitalized development costs diminishes.

Industry Context

StockSavvy.ai notes that QuoteMedia's Q1 2026 results reflect a growing demand for financial data and software solutions, particularly in the areas of interactive content and portfolio management systems. The 15% revenue growth aligns with broader industry trends of digital transformation and increased reliance on real-time data for financial decision-making. However, the increased operating expenses, especially in software development, and the resulting net loss, highlight the competitive pressures and investment required to maintain market position and innovate within the fintech sector.

Comparison to Industry Standards

• The 15% year-over-year revenue growth for QuoteMedia in Q1 2026 is a positive indicator, though it needs to be benchmarked against industry peers. For instance, companies like Refinitiv (now LSEG) and Bloomberg typically report steady, albeit slower, growth in their data services due to their established market share and scale. Smaller, more agile competitors might exhibit higher growth rates but often from a smaller base.
• The improvement in gross margin from 44% to 46% is a positive sign of operational efficiency, but it lags behind some larger, more established data providers who often achieve gross margins in the 60-70% range due to economies of scale and proprietary technology.
• The increase in software development expenses, while necessary for innovation, is a common challenge across the industry. Companies like FactSet and S&P Global also invest heavily in R&D to enhance their platforms and data offerings, which can impact short-term profitability.
• The net loss reported by QuoteMedia is a concern when compared to profitable industry leaders. However, many growth-stage companies in the fintech and data analytics space prioritize market share acquisition and product development over immediate profitability, a strategy that can be validated by future performance and market conditions.

Corporate Governance

Related Party Transactions

• Five-year office lease with 410734 B.C. Ltd. (controlled by David M. Shworan, CEO of Quotemedia Ltd.) effective May 1, 2021, for approximately $6,500 per month. $82,968 was due to 410734 B.C. Ltd. at March 31, 2026.
• Monthly marketing service fee of $3,000 to Bravenet Web Services, Inc. (controlled by David M. Shworan). $73,629 was due to Bravenet related to this agreement at March 31, 2026.
• On February 25, 2025, Bravenet advanced the Company $69,000 with no fixed repayment terms or interest. $71,757 was due to Bravenet related to this advance at March 31, 2026.
• $151,299 in unreimbursed expenses owed to Keith Randall, CEO of Quotemedia, Inc., at March 31, 2026.

Stakeholder Impact

• Shareholders: The widening net loss and material weaknesses in internal controls could negatively impact investor confidence and potentially the stock price. The potential need for future financing could lead to dilution.
• Employees: Increased software development expenses and a focus on system maintenance might indicate a shift in resource allocation, though specific impacts are not detailed.
• Customers: Continued investment in product development and new features aims to enhance customer value. However, potential delays in purchasing decisions due to market uncertainty could affect new customer acquisition.
• Creditors: The company's working capital deficit and reliance on cash flow from operations for the next 12 months suggest a need for careful financial management to ensure obligations are met.

Next Steps

• Continue to expand product lines and improve infrastructure.
• Add more features and data to existing products and release newer versions.
• Leverage artificial intelligence (AI) tools for automation.
• Maintain focus on marketing Quotestream for brokerage firm deployments.
• Continue expansion into the investment professional market with Quotestream Professional.
• Continue growth of Data Feed Services client base, including new international data feed coverage and delivery products.
• Increase sales of Interactive Content and Data APIs, especially for large-scale enterprise deployments.
• Continue important development projects for the remainder of 2026, including data and news coverage expansion, video feeds, fixed-income coverage, and new market information products.
• Continue new deployments of trade integration capabilities.
• Create new proprietary data sets, analytics, and scoring mechanisms.
• Opportunistically evaluate and pursue development of additional new products.

Key Dates

Recommendation

While revenue growth is positive, the widening net loss, increased operating expenses, and identified material weaknesses in internal controls present significant concerns. The company's ability to execute its growth strategy and improve profitability will be key. Investors should monitor future performance and the remediation of control deficiencies before considering a stronger position.

Keywords

QuoteMedia, 10-Q, Financial Data, Market Data, Software, Revenue, Net Loss, Quarterly Report, SEC Filing, Financial Services