Skkynet Cloud Systems, Inc. (OTCQB: SKKY), a provider of secure, real-time data connectivity and edge processing for industrial systems, 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 period last year, while subscription revenue as a percentage of sales grew to 15% for the six-month period, up from 11.8% in FY2025—a 27% increase in subscription mix. Deferred revenue surged 37% to $476,797 from $347,686 at fiscal year-end, reflecting a build-up of subscription contracts that will drive future recognized revenue.
Despite the positive subscription trends, six-month revenue declined 18% to $1,155,499 from $1,414,764 in the prior year period. CEO Gary Tillery attributed this to the strategic shift from perpetual to subscription license models. "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," Tillery said. The company's net loss for Q2 improved by approximately 52% to $(109,392) from $(227,723) in Q2 FY2025.
Skkynet maintains a strong financial foundation with cash and cash equivalents of $1,339,191 and working capital of $1,003,773. This position enables the company to fund its strategic plans, including a C$2.6 million Industrial AI product development initiative supported by FedDev Ontario. The AI initiative is progressing on schedule, with the company developing an agent harness 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 position the company to build the data backbone for AI-driven industrial operations.
During the period, Skkynet expanded its executive team and advisory board, increased go-to-market activities including presence at major industry events such as AVEVA World, CSIA Conference, Hannover Messe, EXPONOR, SPS Italia, and ProveIT, 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 investment spending, demonstrating the company's ability to fund its strategy while the subscription revenue base builds.
Tillery concluded, "Solid cash and working capital give us the foundation to invest confidently in the platform that will drive our future growth. 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." For more information, visit skkynet.com.
