Skkynet Reports Q2 FY2026 Results with 27% Growth in Subscription Mix and $1.34M Cash Position for AI Initiative

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, but six-month revenue declined 18% to $1,155,499 from $1,414,764, reflecting the strategic shift from perpetual to subscription license models.

Subscription revenue as a percentage of sales grew to 15% for the six-month period, up from 11.8% in FY2025, representing a 27% increase in subscription mix. Deferred revenue surged 37% to $476,797 from $347,686 at fiscal year-end, indicating a 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.

CEO Gary Tillery explained, "The decline in our six-month reported revenue is the expected result of a deliberate and strategic shift. 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 noted that the 27% growth in subscription mix and 37% increase in deferred revenue confirm traction, while the company maintains over $1.3 million in cash and working capital above $1 million, providing "the runway to execute our plans without compromise."

A key focus is Skkynet's C$2.6 million Industrial AI product development initiative, supported by FedDev Ontario, which is progressing on schedule. The company is developing an agent harness specifically designed for industrial customers, addressing requirements for security, reliability, real-time performance, and deterministic behavior. Skkynet'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 applications. The agent harness will enable industrial AI agents to operate within rigorous constraints such as security, auditability, and real-time determinism.

During the period, the company expanded its executive team and advisory board, increased go-to-market activities including presence at AVEVA World, CSIA Conference, Hannover Messe, EXPONOR, SPS Italia, and ProveIT, and granted stock options to 19 individuals. Working capital declined only $23,942 over the six-month period despite investment spending, demonstrating the ability to fund strategy while the subscription revenue base builds. For more information, visit skkynet.com.