Skkynet Cloud Systems, Inc. (OTCQB: SKKY), a global leader in industrial software for secure real-time data connectivity and edge processing, announced financial results for the second quarter and six-month period ended April 30, 2026. The company reported Q2 revenue of $606,106, a 4% increase from $585,712 in the same quarter last year. However, six-month revenue declined 18% to $1,155,499 from $1,414,764, a decrease CEO Gary Tillery attributed to the deliberate shift from perpetual to subscription license models.
“The decline in our six-month reported revenue is the expected result of a deliberate and strategic shift,” Tillery said. “When customers choose subscription licenses over perpetual licenses, the same total contract value is recognized over two or three years rather than immediately. This temporarily reduces reported revenue, but it builds a higher-quality, predictable, recurring revenue base.”
Subscription revenue as a percentage of sales grew to 15% for the six-month period, up from 11.8% in the same period of fiscal 2025 — an increase of approximately 27% in subscription mix. Deferred revenue surged 37% to $476,797 from $347,686 at fiscal year-end, reflecting the buildup of subscription contracts that will drive future recognized revenue.
The company’s net loss for Q2 improved by approximately 52% to $(109,392) compared to $(227,723) in Q2 FY2025. Skkynet maintained a solid cash position with $1,339,191 in cash and cash equivalents and working capital of $1,003,773, providing a strong financial foundation to execute strategic plans.
Skkynet’s C$2.6 million Industrial AI product development initiative, supported by FedDev Ontario, is progressing on schedule. The company is developing an agent harness specifically designed for the strict requirements of industrial customers. Industrial environments demand security, reliability, real-time performance, and deterministic behavior that consumer AI solutions do not address. Skkynet’s secure-by-design architecture and over 25 years of industrial data connectivity experience uniquely position the company to build the data backbone for the AI-driven industrial future.
“Solid cash and working capital give us the foundation to invest confidently in the platform that will drive our future growth,” Tillery concluded. “We are building the secure data backbone to provide clean, secure, real-time OT data to wherever it needs to go, securely so that every other application you've invested in, like AI, can actually work — and we are doing it from a position of industry thought leadership, financial discipline and strength.”
The operating loss for the period reflects deliberate investment in leadership, product development, and market expansion. The company expanded its executive team and advisory board, increased go-to-market activities including presence at major industry events, and granted stock options to 19 individuals to align the team with long-term value creation. Working capital declined only $23,942 over the six-month period despite this investment spending, demonstrating the company’s ability to fund its strategy while the subscription revenue base builds. For more information, visit skkynet.com.
