10-Q: Table Trac Reports Strong Q2 2026 Growth

Table Trac, Inc. announced a significant increase in revenue and net income for the second quarter of 2026, driven by system sales and strong operational performance.

Summary

• Table Trac, Inc. reported substantial financial improvements for the second quarter and first half of 2026 compared to the same periods in 2025.
• Revenues for Q2 2026 reached $4.24 million, a significant increase from $2.34 million in Q2 2025. For the first six months of 2026, revenues were $8.16 million, up from $5.87 million in the prior year.
• Net income for Q2 2026 surged to $1.00 million ($0.21/share diluted) from $0.14 million ($0.03/share diluted) in Q2 2025. For the first six months, net income was $1.98 million ($0.42/share diluted), a substantial rise from $0.93 million ($0.20/share diluted) in the prior year.
• The company's income from operations also saw a dramatic increase, reaching $1.19 million in Q2 2026 and $2.35 million for the first six months, compared to $0.06 million and $1.00 million respectively in the prior year.
• As of June 30, 2026, the company had $8.15 million in cash and cash equivalents, with no borrowings outstanding on its $500,000 credit line.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a positive filing, with significant revenue growth and a substantial increase in net income, indicating strong operational performance and financial health.

Positives

• Significant year-over-year revenue growth in both the second quarter (up 81.5%) and the first six months (up 38.9%) of 2026.
• Net income increased dramatically by 593% in Q2 2026 and 113% in the first six months of 2026.
• Income from operations showed a substantial improvement, increasing by over 2000% in Q2 2026 and 135% in the first six months of 2026.
• The company maintains a strong cash position of $8.15 million with no outstanding debt on its credit line.
• System revenue, a key growth driver, increased significantly to 46.3% of total revenue in Q2 2026 from 11.8% in Q2 2025, and 45.4% for the first six months of 2026 from 31.3% in the prior year.

Negatives

• Gross profit margin decreased slightly to 69.8% in Q2 2026 from 75.3% in Q2 2025, and to 68.9% for the first six months of 2026 from 74.3% in the prior year, attributed to increased material costs and complexities in system installations.
• Maintenance revenue as a percentage of total revenue decreased significantly, from 67.6% in Q2 2025 to 36.9% in Q2 2026, and from 52.7% for the first six months of 2025 to 38.1% for the same period in 2026.
• Net cash provided by operating activities decreased to $590,149 for the first six months of 2026 from $1,212,220 in the prior year, primarily due to increases in accounts receivable and prepaid expenses.
• The company had a backlog of only one system installation at June 30, 2026, down from two at June 30, 2025.

Risks

• The company's reliance on a few major customers, where 'Major' customers represented 46.7% of revenues in Q2 2026 and 47.5% for the first six months of 2026.
• Potential for significant adverse effects on business, financial condition, or future results of operations from risks discussed in the Annual Report on Form 10-K.
• The company's cash balances may exceed FDIC insured limits, although they participate in a program to mitigate this risk.
• The company's financial statements are prepared assuming it will continue as a going concern, with no assurance that this assumption will hold.

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

• Randy Gilbert certifies that the report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading.
• Randy Gilbert certifies that the financial statements and other financial information included in the report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant.
• 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 casino management and gaming technology sector. The reported revenue growth, particularly in system sales, aligns with a trend of casinos investing in technology to enhance operations, player tracking, and regulatory compliance. The shift in revenue mix towards system sales from maintenance suggests successful new system deployments.

Comparison to Industry Standards

• The increase in system revenue as a percentage of total revenue (46.3% in Q2 2026 vs. 11.8% in Q2 2025) indicates a successful strategy in selling new core products, which is a common growth driver for technology providers in the gaming industry.
• The decrease in gross margin percentage (69.8% in Q2 2026 vs. 75.3% in Q2 2025) is a point of attention. While common in periods of high installation activity, it is important to monitor if this trend continues, as it could impact profitability if not managed effectively. Competitors often focus on maintaining higher margins through software-as-a-service models or value-added services.
• The company's focus on innovation, evidenced by patent applications for AI-based training systems and gaming ticket management, is consistent with industry trends towards leveraging technology for efficiency and new revenue streams.
• The significant increase in net income per share ($0.21 diluted in Q2 2026 vs. $0.03 in Q2 2025) demonstrates strong earnings power, which is a key metric for investors across the technology and gaming sectors.

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 the fourth quarter of 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 the fourth quarter of 2025.

Stakeholder Impact

• Shareholders: Benefit from increased net income and earnings per share, and a declared dividend of $0.02 per share.
• Employees: Potential benefit from stock options and awards, as indicated by stock compensation expense and grants.
• Customers: Continue to receive system sales, technical support, maintenance, and other services, with ongoing product development aimed at enhancing casino operations.
• Creditors: The company maintains a strong cash position and has no outstanding borrowings on its credit line, indicating a low risk of default.

Next Steps

• Continue to expand product offerings with new system features and ancillary products.
• Pursue further opportunities and strategic partnerships.
• Continue to expand its intellectual property portfolio through patent development initiatives.
• The Board of Directors declared a cash dividend of $0.02 per share, payable on September 11, 2026.

Key Dates

Recommendation

The company has demonstrated significant operational and financial improvements, with strong revenue and net income growth. However, the decrease in gross margin percentage and reliance on major customers warrant a cautious approach. While the current performance is positive, further sustained growth and margin improvement would be needed to justify a 'buy' recommendation. A 'hold' reflects the positive momentum while acknowledging the existing risks.

Keywords

Casino Management System, Gaming Technology, Table Trac, CasinoTrac, System Sales, Maintenance Revenue, SlotSUITE, KioskTrac