Tantalus Systems TSE: GRID executives highlighted record revenue, profitability and orders for fiscal 2025 during a recent company update following the release of fourth-quarter and year-end results. President and CEO Peter Londa and CFO Azim Lalani also discussed deployment progress for the company’s TRUSense Gateway platform, supply chain considerations tied to semiconductors, and strategic priorities heading into 2026.
Record revenue, margins and EBITDA in Q4 and FY2025
Londa said the company delivered its highest quarterly revenue to date in Q4, generating $14.9 million, which he said was up 19% year over year. For the full year 2025, Tantalus reported $54.1 million of revenue, also a record, representing 22% growth year over year. Management noted that the company reports results in U.S. dollars.
Gross profit margins remained above the company’s long-stated target of over 50%. Londa said gross margin was 56% for the quarter and 54% for the full year, roughly in line with the prior year.
On profitability, management pointed to continued positive adjusted EBITDA. Londa said adjusted EBITDA was $1.3 million in Q4 and $3.4 million for the full year, which he described as a company record in aggregate annual EBITDA dollars. He added that full-year adjusted EBITDA was up 156% year over year, citing revenue growth and operating expenses increasing more slowly than revenue, as well as reduced R&D spending after commercialization of the TRUSense Gateway.
The company also generated cash, with Londa citing $4.7 million in cash flow from operations for the full year and noting that both operating cash flow and free cash flow were positive. He emphasized that the company is “generating cash flow instead of consuming cash flow to drive growth,” which he said reflected operating leverage.
Orders and backlog momentum: $65 million and a 1.2 book-to-bill
Management said the company produced a record year for orders, converting just under $65 million from its pipeline, representing 27% growth year over year. Londa also cited a 1.2 book-to-bill ratio for the calendar year, calling it strong relative to peers in the grid modernization market and contrasting it with the 1.0 level he said many larger competitors reference.
TRUSense Gateway adoption expands to 66 utilities
From a commercial perspective, Londa said 66 utilities have placed orders and begun deployments of the TRUSense Gateway, spanning fiber, Ethernet and cellular versions. He sought to clarify that not all of these utilities are pilots, describing a mix that includes trials, upgrades by existing customers, and first-time purchases by new utilities.
Londa estimated that roughly two-thirds of the 66 utilities are existing Tantalus customers deploying new gateway configurations as part of broader upgrades, such as migrating communications infrastructure from 220 MHz networks to IP-based communications using cellular and/or fiber where available. He provided an example of a long-standing customer in Kentucky transitioning portions of its footprint off 220 MHz as cellular coverage and fiber availability have improved, while still maintaining 220 MHz in areas without coverage.
In discussing potential sizing, Londa said the 66 utilities represent approximately 1.6 million meters and suggested the company may provide additional aggregate perspectives over time, including at its upcoming Users Conference and related investor and analyst programming in May.
When asked about the profile of the utilities using TRUSense, Londa said the largest is United Illuminating, an investor-owned utility in Connecticut with around 350,000 meters (rounded). He said progress in its pilot has been publicly disclosed through regulatory filings, and that the utility’s public feedback has been favorable, particularly regarding the value of power quality data. Londa added that the pilot’s expansion depends on regulatory review and timing is difficult to predict. He also cited EPB of Chattanooga as a milestone contract and said EPB is roughly 200,000 meters (rounded). At the smaller end, he noted some utilities have fewer than 10,000 meters, where full deployments may involve “500 devices,” which he said can still be meaningful due to longer-term relationships and recurring revenue.
Management also addressed the pace of pilots converting to broader deployment. Londa reiterated that a 12–18 month utility evaluation window remains typical based on his and the sales team’s experience, but cautioned that external macro and geopolitical developments can affect utility budgets and timing. He said the company has not seen utilities drop out of TRUSense trials due to product performance, and that funding has been the primary gating factor. Londa said no utility has pulled a device out of the field yet, which he characterized as unusual based on his experience and Tantalus’ history of introducing new technologies.
Semiconductor and supply chain: expected 1%–2% margin impact
Executives also discussed semiconductor supply and pricing. Londa described the company’s custom system-on-chip (SoC) as central to the product’s computing platform and said it is fabricated in Taiwan. He attributed current pressures largely to memory components—specifically tightness in DDR high-bandwidth memory demand driven by data center buildouts—which can cascade into lead times and inflation for other memory types and semiconductor fabrication capacity.
Lalani said these pressures primarily affect the connected devices segment, while software and services carry higher margins (which he said are around 75%) and help insulate overall results. He said the company expects the impact to be more pronounced in the second half of 2026 and into the first half of 2027, estimating an overall gross margin impact of roughly 1%–2% while still expecting total gross margin to remain above 50%.
On vendor and geographic concentration risk, Londa said the company is working to diversify its contract manufacturing beyond a single manufacturer and factory location, and to address single-source and sole-source components over time. He added that securing a second fabricator for the ASIC may be more feasible as the company scales.
Balance sheet and strategic priorities for 2026
Tantalus also highlighted balance sheet actions. Londa said the company completed a CAD 23 million bought-deal financing that included a greenshoe at CAD 5.35, describing it as supportive of the strongest balance sheet in the company’s history and enabling both growth initiatives and more strategic options.
Londa also noted the appointment of Susanna Zagar to the board of directors, saying she was most recently CEO of the Ontario Energy Board and has since taken on a role overseeing gas production and distribution across Canada. He said her addition strengthens board capabilities as the company evaluates a potential expansion into Canada.
Looking ahead, management outlined key priorities for 2026:
- Expanding the number of utilities deploying TRUSense Gateways in the field.
- Advancing analytics use cases and monetizing data-driven grid modernization, with additional tools and case studies expected to be introduced at the Users Conference.
- Growing the user community by adding additional utilities in 2026 and beyond.
- Internal scaling investments in tools, resources and reporting capabilities to support anticipated growth.
In response to a question about potential M&A, Londa said TRUSense provides the communications pathway “behind the meter” via embedded Wi-Fi and power line communications capabilities, and that the company currently integrates with partners such as GE Appliances and Savant Systems using APIs. He said the TRUSense Gateway can act as a “traffic cop,” relaying utility messages to in-home devices, while future opportunities include expanding behind-the-meter intelligence, integrations, and capabilities such as load forecasting and load management—either through internal development or acquisitions.
About Tantalus Systems TSE: GRID
Tantalus is a technology company dedicated to helping utilities modernize their distribution grids by harnessing the power of data across all their devices and systems deployed throughout the entire distribution grid. The Company offers a grid modernization platform across multiple levels: intelligent connected devices, communications networks, data management, enterprise applications and analytics. Our solutions provide utilities with the flexibility they need to get the most value from existing infrastructure investments while leveraging advanced capabilities to plan for future requirements.
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