Rank One Computing Q1 Earnings Call Highlights

Key Points

• Rank One Computing (NASDAQ:ROC) reported first-quarter revenue of $2.5 million, down 20% year over year, as lower R&D contract activity and federal procurement delays weighed on results. Product revenue was relatively stable, with growth in newer offerings partly offsetting declines in legacy lines.
• ROC Watch and ROC ABIS were the standout growth drivers, rising 77% and 255% year over year, respectively. Management said both products benefited from new deployments and early commercialization, including government and law-enforcement-related activity.
• Despite holding a 79% gross margin, ROC’s operating expenses increased and the company posted a wider net loss of $3 million. Management said it expects more federal contract activity later in the year as budget conditions normalize after the shutdown.

Rank One Computing NASDAQ: ROC reported lower first-quarter revenue in its first earnings call as a public company, as growth in newer product areas was offset by reduced research and development contract activity and timing delays in federal procurement.

The Vision AI company, which goes by ROC, posted total revenue of $2.5 million for the quarter ended March 31, 2026, down from $3.2 million in the same period a year earlier. CFO Cody Barnes said the 20% decline was driven largely by a decrease in R&D contract revenue following the completion of a significant prior-year program and the lingering effects of the U.S. federal government funding lapse that ran from Oct. 1, 2025, to Nov. 12, 2025.

Barnes said product revenue totaled $2.3 million, compared with $2.4 million in the prior-year quarter. The company recorded lower revenue from ROC SDK and ROC Enroll, partially offset by growth in ROC Watch and ROC ABIS. R&D contract revenue fell to $0.2 million from $0.7 million a year earlier.

ROC Watch and ABIS Lead Product Momentum

CEO Scott Swann used the call to introduce ROC to investors following its IPO, describing the company as a U.S.-built, owned and operated Vision AI business focused on identity, security and digital forensics. He said the company’s technology helps customers “transform visual data into operational intelligence” across use cases including biometrics, video analytics, object detection and digital evidence.

Swann said ROC’s platform serves four major mission areas: national security, public safety, digital identity and physical security. He highlighted several products, including ROC SDK, ROC Watch, ROC ABIS, ROC Evidence, ROC Enroll and ROC Access.

ROC Watch, the company’s video intelligence platform, was one of the quarter’s strongest performers. Swann said ROC Watch revenue increased 77% year over year, driven by two expanded programs within the Department of War and a new contract with a U.S. university. Barnes also cited continued customer adoption and expansion of active deployments.

ROC ABIS, the company’s automated biometric identification system, grew 255% year over year from a small base. Swann said the increase reflected early commercialization and deployment activity, including the launch in March of the first ROC ABIS forensics capability pilot with a state and local law enforcement customer.

Swann also said the company deployed its first ROC Evidence program for the U.S. Drug Enforcement Administration in April to support digital and evidence management procedures. ROC Access Face1, the company’s first hardware device for biometric access control, was recognized at ISC West in March, according to Swann.

Margins Hold, Loss Widens

Gross profit was $2 million in the first quarter, compared with $2.5 million a year earlier. Gross margin was 79%, unchanged from the prior-year period. Barnes said the margin reflected ROC’s software-driven revenue model and the efficiency of its Vision AI platform.

Operating expenses rose to $5 million from $3.5 million a year earlier. Selling, general and administrative expenses increased to $2.9 million from $2 million, with Barnes citing higher personnel-related costs across product development, business development and operations, as well as incremental public company costs. Research and development expenses increased to $2.1 million from $1.6 million, reflecting continued investment in product development and platform enhancements.

ROC reported a net loss of $3 million, compared with a net loss of $0.7 million in the first quarter of 2025. Basic and diluted net loss per share was $0.18, compared with $0.05 a year earlier.

The company ended the quarter with $16.6 million in cash. Barnes said net proceeds from the IPO and the partial exercise of the underwriter’s overallotment option totaled $21.5 million.

Federal Procurement Timing Remains a Key Variable

Management said first-quarter results were affected by public sector procurement timing, including the aftermath of the late-2025 government shutdown. Swann said the resolution of the shutdown and approval of Department of Homeland Security appropriations in April were positive developments for the federal procurement environment.

During the question-and-answer session, StoneX analyst Yi Fu Lee asked whether the public sector had stabilized following the shutdown. Swann said management was “very optimistic about the current signals” it was seeing, noting that federal agencies are now operating within a routine fiscal-year budget cycle and need to obligate funds before Sept. 30.

Swann said ROC expects more activity in the second quarter and “probably more of a surge” in the third quarter, while acknowledging that government funding processes take time. He said 2026 could bring more late awards than usual for federal contractors.

Company Focuses on Land-and-Expand Strategy

Swann said ROC’s business model is moving toward product-led, programmatic and recurring revenue, while R&D contracts remain important for funding innovation and deepening government relationships. He described the company’s strategy as landing initial deployments, expanding them into broader programs and ultimately becoming embedded infrastructure for customers.

Asked about near-term pipeline opportunities, Swann said ROC entered the market in 2025 primarily with ROC Watch and is now pursuing broader adoption while bringing three additional products to market. He said the company’s goal for 2026 is to establish “beachhead customers” across the full product portfolio.

Swann also discussed the hiring of Gary Lac, saying Lac brings significant experience in the identity ecosystem and specifically the AFIS and ABIS market. Swann said Lac is expected to assist with go-to-market strategy and messaging, particularly in the AFIS and ABIS space.

On capital allocation, Barnes said ROC is focused on deploying capital into four primary areas:

• Engineering and research and development
• Business development and sales
• Deployment infrastructure
• Algorithm compute capability

Swann said ROC’s focus is now on execution, including converting product adoption into larger deployments, expanding active programs and deploying capital to support scale. He said the company continues to see demand for trusted, American-built Vision AI across government, public safety, digital identity and commercial security markets.

About Rank One Computing NASDAQ: ROC

ROC is an independent American artificial intelligence company redefining the global standard for Vision AI in identity, security, and digital forensics. Our Vision AI platform delivers real-time facial recognition, multimodal biometric verification, video analytics, and AI-powered evidence analysis to mission-critical organizations across both private and public sectors. ROC's biometric algorithms are routinely ranked by the National Institute of Standards and Technology (“NIST”) as among the most accurate and computationally efficient globally.

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