Cloudastructure (Nasdaq: CSAI) reported second-quarter 2026 revenue of approximately $1.2 million, up 13% year-over-year, while its net loss narrowed to about $1.7 million from $2.2 million a year earlier. The headline figures mask a more significant shift: subscription revenue surged 164% to roughly $764,000 and now accounts for approximately 62% of total revenue, up from 27% in the prior-year quarter.
The mix shift drove gross profit up 53% to about $610,000, lifting gross margin to roughly 49% from 37%. CEO James McCormick described the transition as a deliberate move toward a higher-quality, recurring revenue model. Subscription growth was powered by cloud video surveillance revenue rising 172% and remote guarding revenue climbing 156%.
Hardware revenue fell to approximately $233,000 from $455,000, and installation and other revenue slipped to roughly $236,000 from $347,000. Operating expenses increased to about $2.7 million from $2.3 million. The quarter also included a non-cash gain of approximately $319,000 on derivative liabilities, which helped narrow the net loss.
For the first half of 2026, revenue reached roughly $2.5 million, up 39% year-over-year, with gross profit up about 80%. Cash stood near $3.8 million at June 30, down from $5.75 million at March 31.