Executive Summary

Q4 FY2025 reporting was delivered via an 8‑K press release summarizing full‑year results: FY revenue was $6.13M, +175% YoY, reflecting expansion of recurring rental revenue; stand‑alone Q4 metrics (revenue/EPS/margins) were not disclosed .
Management guided FY2026 revenue to $12–$18M and highlighted multiple months of positive operational cash flow during FY2026; this quarter also detailed $1.2M annualized cost reductions taking effect June 1, 2025, aimed at accelerating cash‑flow breakeven .
Subsequent corporate update moved the positive operational cash flow target date to April/May 2026, and reiterated debt reduction and future uplist ambitions; SOC 2 Type 2 audit completion supports enterprise/government credibility .
Potential stock reaction catalysts: confirmed FY revenue scaling, recurring revenue trajectory (RMR run‑rate >$1M by year end), cost discipline, and extended debt maturities that improved the current ratio (0.66 vs. 0.17 prior year) .

What Went Well and What Went Wrong

What Went Well

FY revenue reached $6.13M (+175% YoY), driven by growth in recurring rental activities; FY gross profit rose to $3.74M (+562% YoY) .
Platform transition complete: Gen4 across all core product lines improves AI performance, reduces deployment complexity/costs, and supports margin improvement .
Management tone confident on cash‑flow trajectory and product roadmap: “We are looking for fiscal 2026 to finish with revenues in the $12 million to $18 million range, as well as produce several months of positive operational cash flow” — Steve Reinharz .

What Went Wrong

Profitability remains distant: FY net loss was $(18.94)M; operating expenses increased 22% YoY, led by G&A (+$3.6M) .
Going‑concern risk disclosed by auditors and management: negative operating cash flow $(12.20)M, accumulated deficit ~$156.5M, and negative working capital $(2.55)M .
Interest burden and capital structure pressure: interest expense remained elevated and DVPO expense increased to $996,881; loans payable totaled $32.80M with heavy reliance on a concentrated lender base .

Financial Results

Annual comparison (FY 2024 → FY 2025)

Metric	FY 2024	FY 2025
Revenue ($USD)	$2,227,559	$6,130,886
Gross Profit ($USD)	$565,817	$3,744,564
Gross Margin (%)	25%	61%
Operating Expenses ($USD)	$14,555,229	$17,691,437
Operating Loss ($USD)	$(13,989,412)	$(13,946,873)
Net Loss ($USD)	$(20,708,716)	$(18,935,592)

Drivers:

Mix shift to higher‑margin rental activities (device rental $5.05M; direct sales $1.08M in FY2025) and higher volume reduced overhead burden per unit .

Quarterly operational context (Q2 → Q3 → Q4 FY2025)

Note: The company did not disclose stand‑alone Q4 revenue/EPS/margin detail in filings. Available quarterly datapoints are shown below.

Metric	Q2 FY2025 (ended Aug 31, 2024)	Q3 FY2025 (ended Nov 30, 2024)	Q4 FY2025
Total Revenue ($USD)	$1,344,183	n/a	n/a
Gross Profit ($USD)	$559,218	n/a	n/a
Gross Margin (%)	41%	n/a	n/a
Rental Revenue ($USD)	n/a	$1,750,968	n/a

Segment breakdown (FY2025)

Segment	FY 2025 Revenue ($USD)	FY 2024 Revenue ($USD)
Device rental activities	$5,050,255	$1,626,207
Direct sales of goods and services	$1,080,631	$601,352

KPIs

KPI	Value	Context
RMR run‑rate (year‑end target)	>$1,000,000; internal forecasts up to $2,000,000	Recurring rental growth drives visibility
Largest quarterly order intake	172 units → ~$212K monthly RMR when deployed	Supports deployment pipeline
SOC 2 Type 2 audit	Completed	Enterprise/government validation
Current ratio	0.66 (vs. 0.17 prior year)	Debt renegotiation reduced current liabilities

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD)	FY2026	$12–$18M (initiated)	$12–$18M (reiterated)	Maintained
Operational cash flow	Timing	Positive op cash flow in CY2025 (management aspiration)	Positive op cash flow now targeted for Apr/May 2026	Lowered/Deferred
Annualized cost savings	Run‑rate	n/a	$1.2M annual savings; implementation from Jun 1, 2025 with Q2 filings impact	Introduced
RMR trajectory	FY2026	>$1M run‑rate by FY2025 year‑end, potential to $2M FY2026	Reiterated	Maintained
Debt reduction	12–18 months	Reduce substantially all debt	Reiterated	Maintained
Uplisting	2027–2029	Target future NASDAQ uplist	Reiterated	Maintained

Earnings Call Themes & Trends

No Q4 FY2025 earnings call transcript was filed; themes below reflect disclosures across Q2/Q3 press releases and Q4 FY data release.

Topic	Previous Mentions (Q2 FY2025)	Previous Mentions (Q3 FY2025)	Current Period (Q4 FY2025)	Trend
AI/Technology initiatives	Emphasis on Gen4 devices; improved analytics and performance; gross margin progress (41% GP in Q2)	Completed Gen4 transition; scaling faster	Gen4 completed across core product lines; SARA agentic AI central to roadmap	Advancing execution
Supply chain/efficiency	n/a	n/a	Efficiency actions across cloud, logistics, deployment; $1.2M annualized savings	Cost discipline improving
Tariffs/macro	n/a	n/a	RIO production investments to minimize U.S. Steel tariff impacts	Proactive mitigation
Product performance	Strong order intake (172 units); RMR target	Rental revenue +30% QoQ to $1.75M	FY revenue and GP records; recurring revenue growth remains focus	Scaling recurring
Regulatory/legal	n/a	n/a	SOC 2 Type 2 audit completed	Compliance strengthened
R&D execution	n/a	Gen4 transition complete	SARA launch and recognition; portfolio stable and market‑ready	Maturing platform
Balance sheet	n/a	n/a	Debt maturities extended; current ratio improved	Incremental improvement

Management Commentary

“Early last fiscal year I announced a forecast of AITX revenues between $5.5 million and $6.5 million, and I'm pleased that we landed towards the higher end of our forecast. We are looking for fiscal 2026 to finish with revenues in the $12 million to $18 million range, as well as produce several months of positive operational cash flow.” — Steve Reinharz .
“We’re thrilled to continue to deliver financial results that bring us ever closer to our immediate goal of bringing AITX to full operational positive cash flow … while the transition to our fourth‑generation platform positions us to scale faster and deliver even more value to our clients.” — Steve Reinharz .
“Reaching positive operational cash flow this spring will mark a significant milestone … we see a clear route to reducing debt, and we are building a foundation that supports larger ambitions including a future uplist.” — Steve Reinharz (updated target Apr/May 2026) .

Q&A Highlights

No Q4 FY2025 earnings call transcript or Q&A was filed; the company referenced an Investor Presentation in mid‑January (not a Q&A call) .

Estimates Context

Wall Street consensus (S&P Global) for Q4 FY2025 EPS and revenue was unavailable for AITX; therefore, a beat/miss assessment relative to consensus cannot be determined at this time. Values retrieved from S&P Global.*

Metric	Q4 FY2025 Consensus	Actual	Result
Revenue ($USD)	n/a*	n/a (not disclosed)	n/a
Primary EPS ($USD)	n/a*	n/a (not disclosed)	n/a

Key Takeaways for Investors

Recurring revenue momentum is intact: FY revenue +175% YoY with rental activities the primary driver; watch deployment pace to convert backlog/order intake into RMR and cash flow .
Margin trajectory improved materially (FY gross margin 61% vs. 25%); Gen4 platform and scale efficiencies should continue to support margin accretion .
Cost discipline is now a core lever: $1.2M annualized reductions should appear in Q2 filings, supporting the path toward operational breakeven .
Liquidity and capital structure remain the central risk: going‑concern disclosure, elevated interest burden, and concentrated lenders necessitate monitoring refinancing progress and DVPO obligations .
Guidance watch: FY2026 revenue $12–$18M maintained; positive operational cash flow timeline deferred to Apr/May 2026—delivery against these milestones is the key near‑term stock narrative .
Compliance and enterprise sales readiness strengthened via SOC 2 Type 2; supports penetration in government/enterprise channels .
Trading implication: Without Q4 stand‑alone metrics or a consensus benchmark, stock moves may hinge on incremental deployment/RMR disclosures, cost‑savings realization, and any debt extension/refinancing updates .

* Values retrieved from S&P Global

Citations:

Artificial Intelligence Technology Solutions Inc. (AITX)·Q4 2025 Earnings Summary