908 Devices NASDAQ: MASS reported first-quarter 2026 revenue of $13.4 million, up 14% year over year, as the company pointed to continued momentum in U.S. state and local demand and announced a new acquisition aimed at expanding its handheld narcotics detection portfolio and recurring revenue base.
First-quarter revenue grew 14% as state and local demand remained a key driver
Chief Executive Officer and Co-founder Kevin Knopp said the company entered 2026 “from a position of strength,” citing a streamlined cost structure, a solid balance sheet, and an expanding recurring revenue opportunity. He said sales to U.S. state and local customers represented approximately 50% of first-quarter revenue, marking the third consecutive quarter that orders from those customers exceeded internal targets.
Knopp added that, based on current pipeline visibility, the company believes it can continue that trend in the second quarter. He characterized the state and local channel as “consistent, high-quality run rate demand” that improves revenue visibility while complementing larger international and U.S. federal opportunities.
Knopp also pointed to demand tied to correctional facilities and narcotics screening, referencing Virginia’s “Operation Free” program. He said Virginia’s initiative includes use of the company’s MX908 device for trace narcotics detection, and that Virginia officials recognized 908 Devices with a state flag for its role in the effort. Knopp said the program reduced fatal overdoses in Virginia’s correction system from 24 in 2024 to 0 in 2025.
He also noted that the company anticipates the Department of Homeland Security funding bill passed “last week” will provide additional support for second-half objectives. As an early second-quarter data point, Knopp said 908 Devices closed a $3 million order in April with another state department of corrections.
FTIR products accounted for 43% of revenue; device shipments reached 167
CFO Joe Griffith said handheld product and service revenue was $12.8 million in the first quarter, up 16% from $11.0 million a year earlier. Griffith said the increase was primarily driven by FTIR products, including more than 25 VipIR shipments, which offset a reduction in ProtectIR shipments.
Knopp said FTIR products represented 43% of total first-quarter revenue, while mass spectrometry revenue made up the remaining 57%.
Griffith said MX908 product and service revenue increased overall due to higher device placements, but that gain was offset by a $0.7 million decline in service revenue. In total, the company shipped 167 devices in the quarter, bringing the installed base to 3,903.
Program product and service revenue was zero in the quarter as the company awaits funding for the next phase of the AVCAD program. OEM and funded partnership revenue was $0.6 million, compared with $0.7 million in the prior-year period.
Recurring revenue, consisting of consumables, accessories, software, and service revenue, was $4.0 million and represented 30% of total revenue. Griffith said recurring revenue declined 7% year over year, “primarily related to the expected reduction in MassSpec service revenue.”
Margins improved; adjusted EBITDA loss narrowed despite a non-cash charge
Griffith reported gross profit of $6.9 million, up from $5.5 million in the prior-year quarter, with gross margin rising to 51% from 47%. He attributed the margin improvement to higher product volume, a shift in channel mix with fewer lower-margin international placements, and reduced facility costs related to the company’s 2025 move of its Boston facility. He said the improvement was partially offset by a lower service gross margin tied to decreased service contract revenue.
Adjusted gross profit was $7.7 million versus $6.4 million a year earlier, and adjusted gross margin was 57%.
Total operating expenses rose to $19.8 million from $16.6 million, driven by a $3.9 million non-cash increase in the fair value of contingent consideration. Griffith said all other operating expenses declined $0.7 million year over year, supported by lower facility expenses and a $0.2 million decrease in acquisition and integration costs.
Net loss from continuing operations was $12.0 million, compared with a $9.8 million loss in the prior-year period, which Griffith said was primarily due to the non-cash contingent consideration revaluation. Adjusted EBITDA loss improved to $2.5 million from $4.6 million, a $2.1 million improvement.
The company ended the quarter with $111.7 million in cash, cash equivalents, and marketable securities and no debt outstanding. Griffith said the company used $1.2 million of cash during the quarter.
NIRLAB acquisition aimed at expanding handheld franchise and boosting recurring software revenue
Knopp announced that 908 Devices has acquired NIRLAB AG, calling it a strong strategic fit that expands the company’s drug detection capabilities, increases its international revenue mix, and adds a “high retention recurring software subscription model.” He said the acquisition expands 908 Devices’ handheld franchise into a “high volume, widely deployable sub-$40,000 segment,” which he said addresses an estimated $200 million market.
Knopp said NIRLAB has more than 100 active customers and approximately $2 million of law enforcement revenue to date, and that the business today is “largely international,” with a path to accelerate U.S. adoption using 908 Devices’ commercial infrastructure.
He highlighted NIRLAB’s recurring model, describing it as about 50% recurring revenue with annual retention greater than 99%. Knopp said the platform includes a cloud-connected AI-driven analysis capability and is aligned with the company’s Team Leader software vision. He also said NIRLAB has performed more than 1 million analyses to date and has built what the company believes is the world’s largest near-infrared spectral database for narcotics.
On pricing, Knopp said the initial NIRLAB device is expected to be roughly $10,000, with a required subscription “roughly half that again per year,” noting pricing is approximate and varies by market.
Financially, Knopp said that for the remaining eight months of 2026, the company expects approximately $2.5 million in NIRLAB revenue, with expectations to grow “to more than $5 million in 2027.” He said the acquisition would create a modest roughly $1 million adjusted EBITDA headwind in 2026, with the plan for the business to be profitable and contribute positively in 2027.
The upfront transaction value is $15 million, consisting of $13 million in cash and $2 million in equity, plus up to $8 million in additional equity tied to milestones over the next 20 months.
In the Q&A session, Knopp and Griffith said they expect to leverage the existing 908 Devices commercial organization to expand NIRLAB in the U.S., with Knopp saying it will not require “significant investments.” Griffith said the company expects to get products into its sales team’s hands “in the next week or two” and begin customer outreach, though Knopp cautioned it may take “a couple of quarters” to fully scale in U.S. markets.
Updated 2026 outlook raised to $67 million to $70 million in revenue
Griffith said the company now expects 2026 revenue of $67 million to $70 million, representing 19% to 25% growth over full-year 2025. He said the guidance range increased by $2.5 million and includes initial expectations for the NIRLAB acquisition.
- Handheld product and service revenue: expected to grow 18% to 21% year over year, or $62 million to $64 million.
- OEM and funded partnerships: expected to be approximately $3 million.
- AVCAD program contribution: expected to be $2 million to $3 million, likely in the second half of 2026.
On AVCAD, Griffith said Smiths Detection has responded to a request for proposal and is negotiating for an anticipated spring award for an initial production run of “approximately a few hundred systems,” with component and subsystem contributions from 908 Devices. He said the timing and quantities were validated by the Department of Defense’s Fiscal Year 2027 Chemical and Biological Defense Program public request to Congress referenced “last week.”
Griffith reiterated expectations for adjusted gross margin in the “mid to high 50% range” for 2026 and said the company expects to reduce its adjusted EBITDA loss to the mid-single-digit millions for the full year, with NIRLAB accounting for about $1 million of that loss.
Closing the call, Knopp said the company is working toward becoming “the number one provider of handheld detection solutions globally,” and said its strategy includes both organic investment and tuck-in M&A to broaden its portfolio and expand recurring revenue opportunities.
About 908 Devices NASDAQ: MASS
908 Devices Inc NASDAQ: MASS is a developer and manufacturer of portable analytical instruments designed to deliver rapid chemical detection in field and laboratory environments. The company's core focus lies in miniaturizing high-performance mass spectrometry and ion mobility spectrometry technologies, enabling users to perform on-site analysis that traditionally required benchtop equipment.
Key products in 908 Devices' portfolio include the MX908, a handheld high-resolution mass spectrometer capable of detecting and identifying a broad range of chemicals and explosives; the M908 portable mass spectrometer for laboratory or mobile units; and the ZipChip capillary electrophoresis system for high-throughput, microfluidic separations.
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