10-Q: Table Trac Reports Strong Q3 Revenue Growth

Table Trac, Inc. announced its third-quarter financial results, showcasing a significant increase in revenue and net income compared to the prior year, alongside a notable rise in operating income.

Summary

• Table Trac, Inc. reported revenues of $2,406,120 for the three months ended September 30, 2026, an increase from $2,135,636 in the same period of 2025.
• For the nine months ended September 30, 2026, revenues reached $10,565,343, up from $8,010,415 in the comparable period of 2025.
• Net income for the third quarter of 2026 was $38,219, a decrease from $58,352 in the third quarter of 2025.
• However, net income for the nine months ended September 30, 2026, significantly increased to $2,014,644, compared to $985,374 for the same period in 2025.
• The company reported a loss from operations of $49,135 for the three months ended September 30, 2026, compared to a loss of $47,530 in the prior year's quarter.
• Income from operations for the nine months ended September 30, 2026, rose to $2,305,230, a substantial increase from $951,514 in the same period of 2025.
• As of September 30, 2026, the company had $8,436,867 in cash and cash equivalents.

Sentiment

Score: 7

Explanation: StockSavvy.ai views this as a moderately positive filing, with strong year-over-year growth in revenue and net income, offset by a slight decrease in gross profit margin and a loss from operations in the most recent quarter.

Positives

• Significant year-over-year revenue growth, with a 12.7% increase in Q3 and a 31.9% increase for the first nine months.
• Substantial increase in net income for the nine-month period, more than doubling from $985,374 in 2025 to $2,014,644 in 2026.
• Strong growth in operating income for the nine-month period, increasing from $951,514 to $2,305,230.
• Healthy cash and cash equivalents balance of $8,436,867 as of September 30, 2026.
• The company has a $500,000 revolving credit line with no outstanding borrowings as of September 30, 2026.
• Increased system installations and upgrades during the nine-month period compared to the prior year.

Negatives

• A net loss from operations of $49,135 was reported for the third quarter of 2026, a slight increase from the $47,530 loss in the same quarter of 2025.
• Gross profit margin decreased from 73.8% in Q3 2025 to 71.7% in Q3 2026, primarily due to increased labor costs in customer service and support.
• Gross profit margin for the nine-month period also decreased from 74.1% in 2025 to 69.5% in 2026, attributed to increased material costs and system complexities.
• Net income for the third quarter of 2026 decreased to $38,219 from $58,352 in the prior year's quarter.
• A special cash dividend of $742,734 was paid in the first nine months of 2026, contributing to a higher net cash used in financing activities compared to 2025.

Risks

• The company's business is concentrated in the United States, with 91.3% of revenues from US customers in Q3 2026, exposing it to risks associated with the US market.
• A significant portion of accounts receivable is concentrated with major customers (54.6% of AR as of Sept 30, 2026), indicating customer concentration risk.
• 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 intellectual property portfolio, while expanding, is subject to the risks associated with patent protection and potential infringement.

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 casino management and gaming technology sector, a niche market that relies on specialized software and hardware solutions. The company's focus on innovation, including AI-based systems and patent development, aligns with industry trends towards data-driven decision-making and operational efficiency. The reported revenue growth, particularly in system sales, suggests a positive demand for their offerings within the casino industry.

Comparison to Industry Standards

• The filing does not provide specific comparable companies or detailed industry benchmarks for direct comparison.
• However, the reported revenue growth of 31.9% for the nine-month period is a strong indicator of performance within its specialized segment of the gaming technology market.
• The decrease in gross profit margin for both the quarter and nine-month period, while a negative, is explained by increased labor and material costs, which are common challenges across many industries currently.

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.
• On March 5, 2026, Chad Hoehne and Randy Gilbert elected to be paid in the form of 750 and 614 shares of the Company's treasury stock, respectively, as part of their 2025 Executive bonus plan.
• On August 7, 2026, the Board of Directors granted 100,000 stock options to Randy Gilbert at an exercise price of $4.51 per share, vesting over four years.

Stakeholder Impact

• Shareholders: Potential for increased value due to strong revenue and net income growth over the nine-month period, offset by a quarterly loss from operations and reduced gross margins.
• Employees: Stock options granted to employees and management, including significant grants to officers, indicate a focus on retention and performance-based incentives.
• Customers: Continued provision of casino management systems and technical support, with ongoing product development and innovation.
• Creditors: The company maintains a strong liquidity position with significant cash reserves and an undrawn credit line, suggesting stability for creditors.

Next Steps

• Continue to expand product offerings and system features.
• Pursue further opportunities and strategic partnerships.
• Continue to develop proprietary solutions to enhance casino operations and data-driven decision-making.
• Focus on innovation and development of AI-based systems.
• The company aims to serve gaming establishments in more U.S. states and international markets.

Key Dates

Recommendation

The company shows strong year-over-year growth in revenue and nine-month net income, indicating positive operational momentum. However, the recent quarterly loss from operations, declining gross margins, and customer concentration risks warrant a cautious approach. A 'hold' recommendation reflects the balance between positive growth trends and the identified risks and quarterly performance dip.

Keywords

Casino Management System, Gaming Technology, Table Trac, CasinoTrac, SlotSUITE, KioskTrac, DataTrac, Revenue Growth