Rank One Computing Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total revenue reached a record $8.0 million for the three months ended September 30, 2026, a 50% year-over-year increase from $5.3 million and a 57% sequential increase.
• Product revenue was $5.7 million, up 24% year-over-year from $4.6 million.
• Gross profit was $7.2 million, a 71% increase from $4.2 million in the prior-year period; gross margin improved to 90% from 79%.
• Operating expenses totaled $6.6 million, an increase from $4.3 million in the prior-year period, driven by personnel, infrastructure, and ZTC acquisition costs.
• Net income was approximately $0.6 million, compared to a net loss of $0.8 million in the prior-year period.
• Earnings per share (basic and diluted) were $0.03, compared to a loss of $0.05 per share in the prior-year period.
• Cash on hand was $7.5 million as of September 30, 2026, with working capital of approximately $14.8 million.
• Accounts receivable increased to $11.1 million from $5.6 million as of June 30, 2026.
• Deferred revenue was $1.8 million as of September 30, 2026, up from $1.4 million as of December 31, 2025.
• The company had no borrowings under its revolving line of credit as of September 30, 2026.

Guidance and Future Outlook:

• Management considers the third quarter an inflection point and expressed confidence in a strong close to 2026.
• The DOJ contract base-year award is expected to contribute more meaningful revenue in the fourth quarter of 2026 and continuing through the third quarter of 2027.
• The company is focused on disciplined execution of its three core growth products: ROC ABIS, ROC Evidence, and ROC Watch.
• Management anticipates the integration of ZTC will strengthen ROC Evidence and that a broad pipeline of opportunities exists across commercial and federal markets.

Business Segments and Product Lines:

• ROC ABIS revenue was $2.2 million, a 654% year-over-year increase from $287,000, driven by a significant federal platform license delivery.
• ROC SDK revenue was $2.6 million, a 52% year-over-year increase from $1.7 million, reflecting new customer contracts.
• ROC Watch revenue was $0.8 million, down from $2.5 million year-over-year due to the completion of a significant government deployment in Q4 2025, but up 219% sequentially from $0.2 million in Q2 2026.
• ROC Evidence revenue was approximately $63,000 following initial commercialization in Q2 2026.
• ROC Enroll revenue was approximately $59,000, a 55% year-over-year increase from $38,000.
• Government R&D contract revenue was $2.2 million, a 175% year-over-year increase from $782,436, driven by expanded activity under a U.S. government research program.
• Service Contracts revenue was approximately $0.2 million, primarily attributable to the ZTC acquisition.

Market and Competitive Landscape:

• ROC secured the largest award in company history: a $64.3 million, eight-year Department of Justice digital evidence contract, with approximately $7.4 million in the initial one-year base period.
• ROC secured its first strategic federal ROC ABIS contract, with a total potential value of $5.1 million over five years and approximately $2.5 million in committed contract value.
• The company achieved #1 global accuracy rankings across three NIST Face Analysis Technology Evaluation (FATE) benchmarks for Age Estimation and Verification.
• ROC is positioned as a competitor in the Vision AI space with a highly specialized team and validated technology differentiation.

Risks and Challenges:

• Government contracts may be terminated or declined for renewal at the government's convenience, and option periods are subject to the availability of appropriations.
• Revenue concentration exists among a limited number of customers and contracts, and significant license revenue recognized in a quarter may not recur.
• Gross margin may fluctuate based on the timing and mix of software licenses, services, hardware, and R&D activity.
• Risks include the integration of ZTC, the realization of anticipated acquisition benefits, and the timing of contract funding and revenue recognition.
• Potential risks involve market acceptance of new products (SaaS/API), cybersecurity incidents, supply chain disruptions, and changes in laws or regulations regarding AI and biometrics.

Management Commentary and Tone:

• CEO B. Scott Swann described the quarter as "transformational," highlighting record revenue, profitability, and execution against IPO strategic objectives.
• Management stated that strategic investments are translating into measurable financial performance and that the company is well-positioned with an active federal pipeline for larger, longer-duration opportunities.
• The tone was confident, citing the quarter as an inflection point that leaves the company confident in a strong close to 2026.

Other Key Points:

• Completed the acquisition of Zuccaro Technical Consulting (ZTC) on August 31, 2026, adding proprietary digital forensics capabilities and federal customer relationships.
• Appointed Dr. Anil K. Jain, a pioneer in biometrics and computer vision, to the Board of Directors.
• Launched ROC's first SaaS product, an Age Estimation API, to establish new recurring revenue opportunities.
• Issued net proceeds of $21.7 million from the issuance of common stock during the nine months ended September 30, 2026.
• Goodwill of $115,124 and Intangible assets of $688,554 were recorded on the balance sheet as of September 30, 2026, resulting from the ZTC acquisition.
• Conference call and webcast were scheduled for November 12, 2026, at 4:30 PM ET to discuss results.