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, an increase of approximately 4% over $585,712 in Q2 FY2025. Subscription revenue as a percentage of sales grew to 15% for the six-month period, up from 11.8% in the same period of FY2025, representing a 27% increase 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.
Despite the positive subscription metrics, six-month revenue declined 18% to $1,155,499 compared to $1,414,764 in the same period of FY2025. CEO Gary Tillery attributed this to the company's deliberate 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,” Tillery explained. “This temporarily reduces reported revenue, but it builds a higher-quality, predictable, recurring revenue base.” The company's cash position remains solid at $1,339,191, with working capital of $1,003,773, providing a strong foundation to execute strategic plans.
Net loss for Q2 improved by approximately 52% to $(109,392) compared to $(227,723) in Q2 FY2025. 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.
Skkynet’s C$2.6 million Industrial AI product development initiative, supported by FedDev Ontario, is progressing on schedule. The project involves developing an agent harness specifically designed for the strict requirements of industrial customers, addressing security, reliability, real-time performance, and deterministic behavior that consumer AI solutions do not provide. The company's secure-by-design architecture and over 25 years of industrial data connectivity experience position it to build the data backbone for AI-driven industrial operations.
“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,” Tillery said. “We are doing it from a position of industry thought leadership, financial discipline and strength.” More information about Skkynet is available at skkynet.com.
