Skkynet Reports Q2 FY2026 Results: Subscription Revenue Mix Grows 27% as Company Accelerates Shift to Recurring Model and Advances AI Initiative

Skkynet Cloud Systems, Inc. (OTCQB: SKKY), a global provider of industrial software for secure real-time data connectivity and edge processing, reported financial results for the second quarter and six-month period ended April 30, 2026. The results highlight a deliberate strategic shift toward subscription-based revenue, with the subscription revenue mix growing 27% year-over-year to 15% of total revenue for the six-month period, up from 11.8% in the same period of fiscal 2025.

Revenue for the second quarter was $606,106, an increase of approximately 4% compared to $585,712 in Q2 FY2025. However, revenue for the six-month period decreased 18% to $1,155,499 from $1,414,764 in the prior year period. The decline is directly attributable to the company’s transition from perpetual to subscription license models. When customers choose subscription licenses, the same total contract value is recognized over two or three years rather than immediately, temporarily reducing reported revenue but building a higher-quality, predictable recurring revenue base.

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 net loss for Q2 improved by approximately 52% to $(109,392) compared to $(227,723) in Q2 FY2025. The company 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 its strategic plans.

‘The decline in our six-month reported revenue is the expected result of a deliberate and strategic shift,’ said Gary Tillery, CEO of Skkynet. ‘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. The 27% growth in our subscription mix and the 37% increase in deferred revenue confirm that this strategy is gaining traction.’

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.

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 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 this investment spending, demonstrating the company’s ability to fund its strategy while the subscription revenue base builds.

‘Solid cash and working capital give us the foundation to invest confidently in the platform that will drive our future growth,’ concluded Tillery. ‘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.

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