CID Holdco Q1 2026 Earnings Call Transcript

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Provided by Quartr
May 11, 2026

Key Takeaways

  • Negative Sentiment: Q1 2026 revenue was de minimis versus $0.4 million a year ago, as Dot Ai said the quarter was intentionally light while it worked through pilots and prepared for second-half deployments.
  • Positive Sentiment: Management reaffirmed full-year 2026 revenue guidance of $6 million to $7.5 million, saying results should be heavily back-end weighted with most bookings and revenue expected in Q3 and Q4.
  • Positive Sentiment: The company said its Gen 3 Asset Intelligence platform is now commercial-grade and multi-tenant, with Q1 updates completed as pilots continue and the SaaS rollout is readied for scale.
  • Neutral Sentiment: Dot Ai emphasized that its business is shifting from one-time hardware sales toward recurring subscription revenue, with management expecting 3- to 5-year contracts and improved retention as customers enroll more devices.
  • Negative Sentiment: Losses widened in the quarter, with net loss of $4.5 million and adjusted EBITDA of negative $3.9 million, while operating expenses rose to $4.1 million due to public-company costs and commercial expansion.
AI Generated. May Contain Errors.
Earnings Conference Call
CID Holdco Q1 2026
00:00 / 00:00

Transcript Sections

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Operator

Good afternoon, ladies and gentlemen. Thank you for standing by. Welcome to Dot Ai's 1st quarter 2026 earnings conference call. During today's presentation, all parties will be in a listen-only mode. Following the presentation, the conference will be open for questions. This conference is being recorded today, Monday, May 11th, 2026, and the earnings press release accompanying this conference call was issued after the market close today. On our call today is Dot Ai's Co-Founder and CEO, Ed Nabrotzky, and CFO, Charlie Maddox. This conference call may contain, in addition to historical information, forward-looking statements within the meaning of the Federal Securities laws regarding Dot Ai. Forward-looking statements include, but are not limited to, statements that express the company's intentions, beliefs, expectations, strategies, predictions, or any other statements relating to its future earnings, activities, events, or conditions.

Operator

These statements are based on current expectations, estimates, and projections about the company's business based, in part, on assumptions made by management. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Actual outcomes and results may, and are likely to, differ materially from what is expressed or forecasted in the forward-looking statements due to numerous factors discussed from time to time in the company's Form 10-K and other documents which the company files with the U.S. Securities and Exchange Commission. Throughout today's call, the company may refer to adjusted EBITDA, a non-GAAP financial measure, which it believes provides helpful information to investors about the performance of the business on an ongoing basis.

Operator

A reconciliation of adjusted EBITDA to its most directly comparable GAAP financial measure is included in today's earnings release, which is available on the Dot Ai website under the Investors tab. At this time, I'd like to turn the call over to Co-Founder and CEO, Edmund Nabrotzky. Edmund, the floor is yours.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

Thank you, operator, and thank you to everyone for joining us today. I'd like to welcome you to our first quarter 2026 financial results conference call. Dot Ai offers a solution built on two pillars: a unique IoT implementation for in-process data collection and a modern cloud-based software suite that takes advantage of this new source of data to implement AI workflows. Our solutions give every physical asset a persistent virtual identity, an intelligence of how it fits in the process, and a real-time 3-D location. This is what we mean by asset intelligence. Today, that data serves humans primarily through dashboards. Tomorrow, it will serve autonomous systems through APIs. The same infrastructure, exponentially larger emerging market as the AI disruption continues in our industrial verticals. 2025 was a foundational year that marked our transition to commercial operations and public company reporting.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

We discussed in our previous Form 10-K call that the roughly $5.8 million in hardware revenue over the last two quarters of 2025 was a leading indicator for deployments in 2026. That significant revenue would not be realized in those deployments until the last two quarters of the year. As discussed, the first quarter of 2026 has been characterized by low revenue as we work through pilots and testing in preparation for those rollouts. Our focus has been on hardening the solution and executing a disciplined plan we laid out for the year, preparing to convert pipeline into recurring subscription revenue, scaling our hardware deployments, and strengthening our financial profile.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

Our commercial interest continues to validate our go-to-market strategy, and although we've seen slower project movement than expected, we are deploying and demonstrating our IoT systems across a growing base of customers in multiple applications in preparation for enrollment into our SaaS services. As our subscription model is built on enrollment of devices feeding data to our cloud-based software, hardware deployments remain a forward indicator of subscription revenue growth through 2026 and beyond. On a technology front, with the completion of our generation 3 SaaS platform in 2025, we now have a commercial-grade platform with full multi-tenant architecture. We've made several updates to this platform in Q1 as we exercise it in pilots and prepare for rollout at scale. This software is the backbone of our recurring revenue model. It enables enterprise-scale deployments with real-time asset visibility, predictive analytics, and seamless integration with existing customer infrastructure.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

A substantial portion of the development is done with talented teams in Bangalore that have been with us for some time and have leveraged AI tools to be incredibly efficient in developing and testing our platform. As disclosed in our filings, we're in the midst of a capital raise required to bridge the gap to future revenue we've outlined. Our annual shareholders meeting this week will vote on measures to enable that raise. Shortly after quarter end on April 1, we co-hosted an industry webinar with Wiliot and Würth Industry North America titled Ambient IoT: The Intelligence Nobody Talks About But Everyone Depends On, which explored how Ambient IoT and AI are moving industrial operations beyond the basic asset tracking into true operational intelligence.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

These joint activities are helping educate the market, build our pipeline, and reinforce our position as the full stack asset intelligence platform of choice for our partners. We also took steps during and after the quarter to strengthen our capital markets presence. In the first quarter, we engaged MZ Group, an international investor relations firm, to lead a strategic investor relations and financial communications program across our key markets. MZ will help us tell the Dot Ai story to a broader audience of institutional investors, brokers, analysts, and private investors and coordinate roadshow and investment conference participation as we work to drive better visibility in the public markets. We will also be participating in the upcoming Noble and Planet MicroCap events in June as we continue to broaden our base of institutional and micro cap investors.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

Speaking to the recent negative shift in the semiconductor market on which we draw for our hardware products, this will not have a significant impact on us in the short term as we have sufficient inventory of both components and finished assemblies on hand to accomplish our goals this year. The broader market for asset intelligence and real-time supply chain visibility continues to grow rapidly. Industry tailwinds around IoT adoption, AI-driven logistics optimization, and the increased need for real-time asset tracking across multiple verticals are all working in our favor. Tariff policy in the U.S. is driving more business our way as we take advantage of our Made in America position. Our competitive differentiation lies in the combination of our proprietary hardware, IoT bridges, and Smart Industrial Tags with our Dot Matrix SaaS platform and AI analytics capabilities.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

This full stack approach allows us to deliver end-to-end solutions that integrate with customers' existing infrastructure, which we believe is a meaningful competitive advantage. Our channel model enables us to scale quickly and leverage the expertise of partners in adopting our technology to many applications, verticals, and use cases. Looking ahead to the balance of 2026, we're reaffirming guidance of revenue of $6 million to $seven and a half million. These bookings and revenue results will be back-end weighted, as we discussed, occurring mostly in the third and fourth quarter of 2026. This outlook reflects our strategic shift towards recurring subscription revenue and long-term margin expansion, consistent with the plan we communicated on our Q4 2025 call.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

We expect to book 3-5-year subscription contracts with strong customer retention profile as our industrial base relies on our installed hardware for in-process data collection and our software solution for operational execution. The 2026 revenue guidance reflects the strategic shift to long-term contracts and ARR, as well as our confidence in the pipeline we've built, the partnerships we've established, and the operational capacity we now have in place. Note that we have implemented reductions in labor as well as cost controls to constrain spend to align with the achievement of important subscriber milestones this year. Our priorities for 2026 are clear: convert pipeline into revenue, expand our customer base, deepen existing customer relationships, scale our partner ecosystem, and continue to build recurring SaaS revenue as proportion of the total mix.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

We are laser-focused on execution and building a sustainable high growth and ultimately profitable business in the quarters to come. I'd now like to turn the call over to CFO Charlie Maddox to walk through some key financial details for the first quarter of 2026. Charlie?

Charlie Maddox
CFO at Dot Ai

Thank you, Ed. Revenue for the first quarter of 2026 was as expected de minimis as compared to $0.4 million in the same year-ago quarter. The year-over-year decrease primarily reflected the back-end weighted nature of our 2026 revenue plan, with subscription contracts and hardware deployments expected to ramp up in the second half of the year, as well as our strategic transition from one-time hardware-led sales towards longer-term recurring subscription revenue. Gross profit for our revenue in the first quarter saw a gross margin of 78.2%, reflecting the inherent strength of our model. Operating expenses for the first quarter of 2026 totaled $4.1 million as compared to $2.1 million in the same year-ago quarter.

Charlie Maddox
CFO at Dot Ai

The increase was primarily driven by costs associated with operating as a public company, expansion of our commercial team and partner ecosystem, and continued investment in our Gen 3 Asset Intelligence platform, partially offset by cost controls implemented during the quarter. Net loss for the first quarter of 2026 was $4.5 million or $0.15 per basic and diluted share as compared to a net loss of $1.3 million or $0.11 per basic and diluted share in the same year-ago quarter. Adjusted EBITDA, a non-GAAP measure, totaled negative $3.9 million in the first quarter of 2026 as compared to negative $1.3 million in the same year-ago quarter. The U.S. GAAP net loss to adjusted EBITDA reconciliation table can be found in our earnings press release, which crossed the wire earlier today.

Charlie Maddox
CFO at Dot Ai

Our capital allocation priorities remain focused on investing in revenue-generating activities, including expanding our commercial team, co-marketing and partner onboarding, as well as technology priorities developing our software platform. We will continue to evaluate capital sources thoughtfully and remain focused on aligning capital access with revenue-generating milestones and long-term shareholder value. This completes my prepared comments. Before we begin our question and answer session, I'd like to turn the call back to Ed for some closing remarks. Ed?

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

Thank you, Charlie. In summary, the first quarter of 2026 laid the foundation for commercial momentum in the second half of this year. Our pipeline is growing, our partner ecosystem is expanding, and our Dot Matrix 3.0 Asset Intelligence platform is in the hands of our enterprise customers. We remain confident in our full year 2026 revenue guidance of $6 million-$7.5 million, although we expect these results to be back-end weighted as subscription contracts ramp. We have the team, the technology, and the partnerships in place to execute. We're building something special here at Dot Ai, and we appreciate your support as we continue this journey. With that, operator, let's open the line for questions.

Operator

Thank you, sir. We will now begin the question and answer session for telephone participants. If you have a question, please press the star followed by the one on your touch tone telephone. If you would like to withdraw your question, please press the star followed by the two. Again, that is the star followed by the one if you have a question. If you are using speaker equipment, you will need to lift the handset before making your selection. I will now pause as we assemble a queue. Again, that is star one if you would like to ask a question. It appears we have no questions. I will now hand the call back to Co-Founder and CEO Ed Nabrotzky for his closing remarks.

Ed Nabrotzky
Co-Founder and CEO at Dot Ai

Thank you everyone for joining us today. We're grateful that you could be part of our journey and that you're continuing to have interest in working with us as we go forward. We look forward to reporting our second quarter as scheduled.

Operator

Ladies and gentlemen, this does conclude today's teleconference. Thank you for your participation. You may now disconnect your lines and have a wonderful day.

Analysts
    • Charlie Maddox
      CFO at Dot Ai
    • Ed Nabrotzky
      Co-Founder and CEO at Dot Ai
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