This article first appeared on GuruFocus .
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Revenue:$6.0 million in Q2 2026, up 19% sequentially and 25% year over year.
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Gross Margin:$3.3 million, or 55% of revenue, up from 52.1% in Q2 2025.
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EBITDA:Positive at $181,000, versus a loss of $1.2 million in the same quarter last year.
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Net Loss:Narrowed 89% to $187,000 from $1.72 million in Q2 2025.
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Operating Expenses:Totaled $6.2 million, down 3% year over year.
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Salaries and Compensation:Down 18% year over year to $2.5 million.
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Bookings Backlog:$19.1 million at June 30, down from $20.6 million at March 31, but up 26% year over year.
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Deferred Revenue:$7.7 million, up from $6.9 million at the end of Q1 and up 42% from year end.
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Cash:$6.2 million at quarter end, up from $3.4 million at year end.
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First-Half Revenue:$11.1 million, down 1.5% year over year.
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First-Half EBITDA:Loss of $138,000, an improvement of $765,000 year over year.
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First-Half Net Loss:$875,000, a 54% reduction from $1.88 million in the prior year.
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Cash Flow from Operations:Positive at $556,000 for the first half, versus $525,000 in the prior year.
Release Date: August 31, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Revenue in Q2 2026 was $6 million, up 19% sequentially and 25% year-over-year, marking the strongest quarter in five years.
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EBITDA turned positive at $181,000, a significant improvement from a loss of $1.2 million in the same quarter last year.
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Net loss narrowed by 89% year-over-year to $187,000, showing strong progress toward profitability.
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Salaries and compensation costs decreased by 18% year-over-year, driven by AI-driven productivity gains in engineering and delivery.
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Deferred revenue increased to $7.7 million, up 42% from year-end, indicating strong cash collections from clients for future services.
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Cash balance improved to $6.2 million, up from $3.4 million at year-end, with positive operating cash flow of $556,000 in the first half.
Negative Points
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The company's backlog decreased to $19.1 million from $20.6 million at the end of Q1, reflecting a slight decline despite revenue recognition.
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First-half revenue was still marginally below the prior year at $11.1 million versus $11.2 million, with Q1 down 21% year-over-year.
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The macro environment remains challenging, with tariff-driven budget caution and program-timing deferrals continuing to impact client spending.
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Gross margin percentage declined sequentially to 55% from 59.1% in Q1, due to a mix effect from higher reward fulfillment activity.
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The company still reported an EBITDA loss of $138,000 for the first half, and management cautioned that one quarter of positive EBITDA is not an inflection point.
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Client decision-making remains conservative, and the company does not expect clarity on the macro environment to improve anytime soon.
Q & A Highlights
Q: You have referred several times to 2027 as an inflection point for the company. Could you clarify what, specifically, you mean by inflection? Are you referring primarily to sustained positive EBITDA and profitability and acceleration in revenue growth or both? And what are the key milestones investors should watch over the next several quarters to determine whether Snipp is on track to reach that inflection? A: Atul Sabharwal (CEO): Inflection, for me, is sustained profitable growth. We have been trying to build a profitably growing business, not growth at the cost of losing capital. The Q2 results provide evidence that the machine workswhen revenue shows up, we will produce EBITDAbut one quarter of positive EBITDA is not an inflection, and we should not be modeled as one just yet. The first half is still an EBITDA loss, and our quarters will continue to be lumpy due to client program timing.
Q: It's good to see growth pick up this quarter. I was wondering if there's any specific product or customer category that contributed to that. A: Atul Sabharwal (CEO): Honestly, it's just backlog convertingclients are signing contracts. In our industry, if clients don't spend, they lose their own internal budgets for subsequent quarters and years, which they need. So they sign these deals knowing they have to put programs in the market. This is an across-the-board trend and doesn't affect any one product group specifically.
Q: In the prepared remarks, you mentioned a little bit on the gross margins due to mix. I was just wondering if there's a certain type of mix that's more resonating in this type of volatile macro environment? And where do you see it landing in this year and next year? A: Atul Sabharwal (CEO): Our margins are pretty much consistent and not any different across products or seasons. The long-term loyalty rebate stuff is pretty high margin, and our promotions business is as high margin if you take out the cost of incentives. It's really just converting those deferred revenue contracts to revenue and launching programs. Unless we are trying to break into a new industry, we don't worry about it tremendously. If revenue ramps even slightly by 2027, the business starts spitting out a fair amount of cash.
Q: You mentioned the cost optimization and leveraging AI, internally. I know you're not giving out any numbers, but if you can just give some color on some of the efficiency gains that you are seeing and where you plan to take itsome of these initial or internal initiatives, that would be great. A: Atul Sabharwal (CEO): The biggest cost item in our entire company is salaries and people. The only big efficiency driver is whether you can use AI and build an ecosystem of agents that actually replace peoplethat's where the efficiency will come from. Other costs are pretty low. The other big cost item is third-party incentives, but a $5 Walmart gift card is a $5 Walmart gift card; we already get discounts on that. It is just people.
Q: Still a very volatile environment. Has anything changed from the first half of the year? A: Atul Sabharwal (CEO): The macro is what the macro is, and we can't forecast our way out of it. There is no clarity about the future, and I don't see that changing anytime soon. But what we can execute on, we are executing on. We have a pretty good margin business; it's a matter of scaling top-line revenue and putting in these productivity gains using technology internally to drive profitability.
Q: Deferred revenue was a meaningful contributor to operating cash flow this half. And it's now $7.7 million. Could you give us a rough sense of the split between platform and license fees on one side and reward funds on the other side? And how you're thinking about cash flow, as the backlog converts? A: Malcolm Davidson (Interim CFO): On the cash flow part, the cash is already being received, so there isn't necessarily additional cash flows from certain campaigns. It depends on how they're structured. That cash is already in the bank and disclosed on our financial statements. As we continue to start various campaigns, we'll recognize the related revenue, and the deferred revenue number will come down. Atul Sabharwal (CEO): Our deferred revenue only goes up when we actually receive cash upfront, which is good to get paid upfront.
Q: Capitalized intangibles stepped up quite a bit in the first half. Could you help me understand how much of that is engineering time and where you'd expect that line to run in the second half? A: Atul Sabharwal (CEO): All of that is basically engineering and product teams' timeit's all R&D. Our auditors insisted many years back that we have to capitalize a portion of our development because it is considered R&D since we get to reuse it as a platform. I expect it to be pretty consistent for the rest of the year. Malcolm Davidson (Interim CFO): As we adopt more AI and look at these capitalized costs as less of R&D-type costs, I think we'll actually start to see that number come down.
Q: How should we think about the pace of new bookings from here? A: Atul Sabharwal (CEO): From a bookings-backlog perspective, we are spending a lot of time and focus on the revenue side to ramp our business. We've been looking at new markets and trying to expand our share of wallet with existing clients. For the rest of this year, if we can keep our backlog in this range, I think we'd be very happy to end the year on the same level. That's my outlook for new bookings.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
