10-Q: Table Trac Reports Q1 2026 Growth in Net Income

Table Trac, Inc. announced its first quarter 2026 financial results, showing an increase in net income and revenue, while managing operating expenses effectively.

Summary

• Table Trac, Inc. reported revenues of $3,914,339 for the first quarter ended March 31, 2026, an increase from $3,535,933 in the same period of 2025.
• Net income for the quarter was $971,489, or $0.21 per diluted share, up from $782,239, or $0.17 per diluted share, in the first quarter of 2025.
• Income from operations increased to $1,160,508 from $942,627 year-over-year.
• Selling, general, and administrative expenses decreased to $1,500,547 from $1,660,983, attributed to lower headcount and reduced sales and marketing spending.
• The company had $8,122,868 in cash and cash equivalents as of March 31, 2026.
• A cash dividend of $0.02 per share was declared on May 8, 2026, payable on June 12, 2026.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a positive report with solid revenue and net income growth, alongside effective cost management, although a slight decrease in gross margin and cash flow from operations warrants monitoring.

Positives

• Revenue increased by 10.7% to $3,914,339 in Q1 2026 compared to Q1 2025.
• Net income rose by 24.2% to $971,489 in Q1 2026 compared to Q1 2025.
• Diluted earnings per share improved to $0.21 from $0.17 year-over-year.
• Income from operations saw a significant increase of 23.1% to $1,160,508.
• Selling, general, and administrative expenses were reduced by $160,436, or 9.7%, due to cost management initiatives.
• The company maintained a strong cash position with $8,122,868 in cash and cash equivalents.
• The backlog of system installations decreased from five to three, indicating progress on existing projects.

Negatives

• Gross profit margin decreased to 68.0% in Q1 2026 from 73.6% in Q1 2025, primarily due to increased relative labor costs associated with more complex system installations.
• Cost of sales increased by 34.4% to $1,253,284, outpacing revenue growth.
• Interest income decreased to $96,981 from $117,680 due to the absence of short-term investments in the current period.
• Net cash provided by operating activities decreased to $444,090 from $734,810 in the prior year's quarter.
• Net cash provided by investing activities was $0 in Q1 2026, compared to $2,570,085 in Q1 2025, due to no maturing certificates of deposit.

Risks

• The company's reliance on a few major customers represents a concentration of risk, as 41.8% of revenues and 52.7% of accounts receivable were from major customers in Q1 2026.
• The company's business is concentrated in the United States, with 95.1% of revenues generated domestically in Q1 2026, exposing it to risks associated with the U.S. market.
• The company's financial statements are prepared assuming it will continue as a going concern, and there are no assurances that this assumption will hold.
• The company's future results may be materially different from its plans and expectations due to various risks and uncertainties, including those detailed in its Form 10-K.

Future Outlook

The company believes it has adequate cash to meet its obligations and continue operations for at least the next 12 months. Management is not aware of any trends or demands that would materially impact liquidity. The company aims to pursue further opportunities and strategic partnerships.

Management Comments

• Management believes that participation in the IntraFi Network reduces the concentration and credit risk associated with uninsured deposits and enhances the safety of the Company's cash holdings.
• Management believes that receivables, net of the allowance for credit losses, are fully collectable.
• Management believes that any write-off will not have a material impact on the Company's financial position.
• Management believes that the Company has adequate cash to meet its obligations and continue operations for both existing customer contracts and ongoing product development for at least the next 12 months from the date of this filing.
• Management is not aware of any trends or any known demands, commitments, events or uncertainties that will result in or that are reasonably likely to result in the Company's liquidity increasing or decreasing in any material way.

Industry Context

StockSavvy.ai notes that Table Trac operates in the specialized casino management and gaming technology sector. The company's focus on patented, real-time systems and data-driven technologies aligns with industry trends towards automation and enhanced operational visibility in casinos. The reported revenue growth and net income increase reflect positive performance within this niche market, though the decrease in gross margin warrants attention.

Comparison to Industry Standards

• The gross profit margin of 68.0% for Q1 2026 is strong, but a decrease from 73.6% in Q1 2025 indicates potential pressure on cost of sales, which is higher than typical software-as-a-service (SaaS) companies that often achieve gross margins above 80%.
• The company's revenue growth of 10.7% is solid for a specialized technology provider, but may lag behind faster-growing segments of the broader fintech or enterprise software markets.
• The net income margin of approximately 24.8% ($971,489 / $3,914,339) is healthy and suggests efficient operations, particularly given the reduction in SG&A expenses.

Related Party Transactions

• On March 5, 2025, Chad Hoehne and Randy Gilbert elected to be paid in the form of 2,100 and 1,855 shares of the Company's treasury stock, respectively, as part of their 2024 Executive bonus plan. These shares were valued at 90% of the weighted average trade value from Q4 2024.
• On March 5, 2026, Chad Hoehne and Randy Gilbert elected to be paid in the form of 750 and 611 shares of the Company's treasury stock, respectively, as part of their 2025 Executive bonus plan. These shares were valued at 90% of the weighted average trade value from Q4 2025.

Stakeholder Impact

• Shareholders benefit from increased net income and earnings per share, as well as a declared cash dividend.
• Employees may benefit from stock options granted, with 19,500 options awarded on December 19, 2025, which vested immediately.
• Customers continue to receive system sales, installation, custom configurations, training, and ongoing technical support and maintenance services.

Next Steps

• The company aims to pursue further opportunities and strategic partnerships.
• Continue to expand product offerings to include new system features and ancillary products.
• The Board of Directors will determine the declaration, amount, and payment of any future cash dividends.

Key Dates

Recommendation

The company demonstrates consistent revenue and profit growth, coupled with effective cost control. However, the declining gross margin and reduced operating cash flow warrant a cautious 'hold' stance until these trends are clarified and potentially reversed. The strong cash position and dividend are positive, but the reliance on major customers remains a concern.

Keywords

Table Trac, 10-Q, Quarterly Report, Casino Management System, Gaming Technology, Financial Results, Revenue, Net Income, SEC Filing, Table Games Management