TEN Holdings — Third Quarter 2026 Earnings Summary

Financial Performance

• Revenue for the quarter ended September 30, 2026, was $640,000, a 17.9% increase year-over-year from $543,000 in the prior-year period.
• Platform usage revenue decreased 12.8% to $428,000, while professional and managed services revenue increased 307.7% to $212,000.
• Cost of revenue rose 89.1% to $261,000 from $138,000, driven by a higher volume of on-site events.
• Gross profit was $379,000, down from $405,000, with gross profit margin declining to 59.2% from 74.6%.
• Selling, general and administrative (SG&A) expenses were $4,113,000, an 88.2% increase from $2,185,000, primarily due to a $1.8 million write-off of capitalized service contracts and $0.5 million in legal expenses.
• Excluding the write-off and legal expenses, SG&A expenses would have decreased approximately 18% year-over-year.
• Net loss for the quarter was $3,734,000 ($0.31 per share), an 87.9% increase from a net loss of $1,987,000 ($0.84 per share) in the prior-year period.
• Depreciation and amortization expense decreased to $10,000 from $147,000, as capitalized software was fully impaired in 2025.
• Interest expense totaled $2,000, down from $59,000, due to a lower outstanding short-term loan balance.
• Weighted average common shares outstanding were 11,999,366, reflecting a 1-for-15 reverse stock split effective December 1, 2025.

Guidance and Future Outlook

• The company plans to continue transitioning from a managed services model to a recurring, subscription-based SaaS model built on the TEN platform.
• Future product expansion for TEN includes AI and automation, integrations, engagement and intent features, reporting and analytics, and content studio capabilities.
• Management intends to pursue disciplined acquisitions of accretive businesses that add revenue and EBITDA, products scalable by the sales team, and complementary technologies.
• The company aims to strengthen its technology platform and accelerate its transition toward a scalable, SaaS-driven business model.

Business Segments and Product Lines

• Launched TEN, a next-generation Digital Experience Platform that combines registration, live production, audience engagement, on-demand content, and continuing education credentialing in a single system.
• TEN supports up to 50,000 concurrent attendees and is available as a self-service solution or with managed services as an add-on.
• The company is working to transition existing enterprise customer relationships from project-based engagements to subscription-based arrangements.
• The platform roadmap includes marketing automation, CRM integrations, advanced engagement analytics, AI-powered capabilities, and content management solutions.

Market and Competitive Landscape

• The company serves Fortune 500 companies and enterprise customers with a focus on digital engagement solutions.
• Management views the transition to subscription-based arrangements as a way to create a more predictable and recurring revenue stream.
• The company is executing an acquisition strategy aimed at market consolidation and adding scalable revenue and EBITDA.

Risks and Challenges

• The press release notes forward-looking statements regarding the development, availability, and adoption of TEN and its planned expansion, including AI, automation, and integrations.
• Risks include uncertainties related to the company's growth strategy, recurring-revenue strategy, potential acquisitions, and market conditions.
• Actual results may differ materially from forward-looking statements due to factors discussed in the company's Form 10-K and subsequent 10-Q filings.

Management Commentary and Tone

• CEO Virgilio Torres stated that performance reflects continued demand for digital engagement solutions and the ability to serve existing and new customers.
• Management highlighted progress in improving operational efficiency, noting a $2.5 million reduction in the annual operating cost structure over the past 12 months.
• The tone indicates a shift in focus from cost reduction to accelerating revenue growth and scaling the TEN platform.
• Management expressed confidence that the company is positioned to build a more scalable, recurring revenue business and create long-term shareholder value.

Other Key Points

• Short-term related-party borrowings decreased from $4.6 million at the beginning of the year to approximately $0.1 million as of September 30, 2026.
• Total liabilities declined approximately 74%, from $7.7 million at year-end 2025 to $2.0 million.
• Cash and cash equivalents were $3.5 million as of September 30, 2026, up from $1.6 million at December 31, 2025, driven by a $7.5 million common stock offering in June 2026.
• Stock options were exercised for 89,405 shares, generating approximately $0.73 million in cash proceeds during the quarter.
• Ian M. Lawson was appointed Interim Chief Financial Officer effective September 30, 2026.
• The company relocated its headquarters to New York, New York.
• A registration statement on Form S-3 was filed for a $100 million universal shelf.
• The company completed the termination of certain agreements entered into by former management in connection with its initial public offering.
• Net cash used in operating activities for the nine months ended September 30, 2026, was $5.4 million, compared to $9.0 million in the prior-year period.
• Net cash provided by financing activities for the nine months ended September 30, 2026, was $7.4 million.