ChronoScale — Fiscal First Quarter 2027 Earnings Summary

Financial Performance

• Revenue for the fiscal first quarter ended August 31, 2026, was $41.5 million, a 148% increase from $16.7 million in the prior-year comparable period.
• Net loss from continuing operations was $26.4 million, or $0.18 per basic and diluted share, compared to a net loss of $11.2 million, or $0.08 per share, in the prior-year period.
• Net loss from discontinued operations (Legacy Ekso Business) was $16.1 million.
• Total net loss was $42.5 million.
• Cost of revenues was $45.6 million, up 91% from $23.9 million in the prior year, driven by higher hardware purchases, depreciation, energy costs, and personnel expenses.
• Selling, general and administrative expenses increased to $20.7 million from $0.4 million in the prior year, driven by stock-based compensation, professional services, and headcount.
• Adjusted EBITDA was $5.9 million, down from $9.4 million in the prior-year period.
• Cash and cash equivalents as of August 31, 2026, were $15.2 million.
• Total assets were $295.4 million as of August 31, 2026, down from $325.9 million as of May 31, 2026.
• Total liabilities were $144.8 million as of August 31, 2026.
• Stockholders' equity was $150.7 million as of August 31, 2026, down from $180.0 million as of May 31, 2026.
• Accounts payable increased to $15.8 million from $9.1 million in the prior quarter.
• Current portion of debt increased to $10.5 million from $3.4 million in the prior quarter.
• Cash flow provided by operating activities was $14.6 million.
• Cash flow used in investing activities was $3.1 million.
• Cash flow used in financing activities was $6.0 million.

Guidance and Future Outlook

• The Company is on track to achieve $1 billion in annualized run-rate revenue by calendar Q3 2027.
• The Company expects to complete the deployment of approximately 4 MW of AI compute capacity under its Baseten Labs partnership in calendar Q1 2027.
• Management stated that customer agreements and current deployment schedules support the expected $1 billion annualized revenue run rate.

Business Segments and Product Lines

• The Company classified its legacy Ekso Bionics business as held for sale and reported results in discontinued operations; the sale was completed on September 30, 2026.
• Secured a 50 MW AI compute deployment with Microsoft in North America, integrating NVIDIA GB300 NVL72 systems with liquid cooling and high-performance networking.
• Entered a strategic partnership with Nutanix to deliver enterprise-ready AI infrastructure.
• Entered a three-year strategic partnership with Baseten Labs, Inc. to support the deployment of approximately 4 MW of AI compute capacity.
• Revenue growth was primarily attributable to a new customer involving the sale of AI infrastructure hardware and related support and maintenance services pursuant to resale arrangements.

Market and Competitive Landscape

• The Company positions itself among a select group of providers delivering next-generation, high-density AI capacity to hyperscale customers.
• The Nutanix partnership aims to broaden the Company's reach beyond hyperscalers to the enterprise market.

Risks and Challenges

• Risks include the ability to raise capital to fund GPU acquisitions and capital expenditures, including significant existing purchase obligations.
• Risks include customer ability to terminate agreements, require refunds of prepayments, or delay credits if the Company fails to perform timely.
• Risks include availability and timely delivery of GPUs, power, and equipment from third-party suppliers.
• Risks include the ability to enter into definitive agreements for partnerships and data center lease arrangements.
• Risks include the ability to replace departing key personnel and the success of risk management activities.
• Risks include customer concentration and the ability to renew or expand customer relationships.

Management Commentary and Tone

• CEO Cenly Chen stated that strong revenue growth and expanded customer commitments validate demand and the opportunity to grow alongside customers.
• Management indicated that the completed Ekso sale allows the Company to sharpen its focus on AI infrastructure.
• Management emphasized a priority on disciplined execution and delivering infrastructure at scale.

Other Key Points

• The Company received $328.2 million in aggregate prepayments under existing customer contracts.
• Announced a contract extension with an existing AI customer and a new customer agreement subsequent to the quarter end.
• Stock-based compensation expense for the quarter was $10.1 million.
• Depreciation and amortization expense was $15.3 million.
• The Company recorded a gain on the change in fair value of warrants of $22,000.
• The Company recorded a loss on classification of held for sale of $14.1 million.
• Series B preferred shares were converted to common stock with a value of $2.2 million.
• Proceeds from the exercise of warrants were $1.0 million.
• Proceeds from a Grid Note from Applied Parent were $7.0 million.