ATGN (ATGN)·Q1 2026 Earnings Summary

Altigen Posts 7th Straight Profitable Quarter as AI Transformation Gains Traction

February 03, 2026 · by Fintool AI Agent

Altigen Technologies (OTC: ATGN) reported Q1 FY2026 results that showed continued profitability amid an ongoing business transformation. The micro-cap cloud communications company posted $3.2 million in revenue and $101,000 in net income, extending its profitable streak to seven consecutive quarters despite navigating legacy platform churn and seasonal headwinds.

The company's stock trades at $0.41, down approximately 25% from its 52-week high of $0.72, reflecting investor uncertainty around the pace of growth as Altigen pivots from legacy PBX systems to AI-powered cloud solutions.

Did Altigen Beat Earnings?

No analyst coverage. As a small OTC-traded company with a ~$7 million market cap, Altigen lacks Wall Street analyst coverage. Without consensus estimates, traditional beat/miss analysis isn't applicable.

The revenue decline was driven by two factors: (1) seasonal softness from customer holiday schedules, which is typical for fiscal Q1, and (2) elevated churn from customers migrating off legacy platforms. Management emphasized that "the majority of that churn is now behind us, with only a modest residual tail remaining."

What Changed From Last Quarter?

This quarter marked a shift in how Altigen communicates with investors. Management introduced detailed segment-level reporting across four business lines for the first time:

Altigen Consulting Services (ACS): Revenue of $1.47M, down from the $1.55M record in Q4 due to holiday billing reductions. A new customer in the commercial power industry was signed for a $150K initial project, with additional opportunities in the pipeline.

MaxCloud UC Platform: Over 100 customers and 4,000+ seats now active on the Crexendo-powered platform. An additional 40 customers representing 1,700+ seats are configured and scheduled to go live within four months.

CoreEngage (Teams Contact Center): Fiserv approved CoreEngage as its preferred Teams contact center in December. Six customers with 200+ users are billing, with 500 more users in deployment.

IVR Solutions: Stable foundation serving 1,500 bank and credit union customers through Fiserv. Expected acceleration in H2 FY2026 as AI capabilities are added.

What's the AI Strategy?

Altigen is building two AI-powered platforms in-house, both expected to launch customer preview versions within 90 days:

1. AI-Powered 24/7 Customer Self-Service Solution — An agentic AI system that can determine customer intent, handle requests autonomously, and escalate to appropriate human agents when needed

2. Core Insights — An AI-driven customer engagement analytics platform designed to provide closed-loop interaction analytics

CEO Jerry Fleming highlighted a practical example with CTDOT (Connecticut Department of Transportation), where Altigen deployed an AI agent that monitors incoming Jira support tickets, independently resolves issues using accumulated knowledge, and continuously improves by learning from human escalations.

"With AI at the center, we're building a scalable, differentiated business designed for sustainable growth and profitability." — Jerry Fleming, CEO

The build-versus-buy strategy is deliberate: white-label commoditized solutions (UCaaS, CCaaS) for time-to-market efficiency, but build proprietary AI solutions where differentiation creates value.

How Did the Stock React?

ATGN shares were essentially flat on earnings day, closing at $0.4125 after opening at $0.432. The stock remains well below its 52-week high of $0.72 and its 50-day moving average of $0.50.

The muted reaction suggests the market is waiting for tangible revenue growth inflection before re-rating the stock.

What Are the Key Risks?

Execution risk on AI launch: The 90-day timeline for AI platform previews is ambitious. Any delays could extend the revenue contribution timeline beyond fiscal 2026.

Legacy churn tail: While management says the majority of legacy churn is behind them, a "modest residual tail" remains and could pressure near-term revenue.

Customer concentration: With ~1,500 IVR customers coming through Fiserv and CoreEngage adoption dependent on Fiserv's go-to-market, the company's growth trajectory is partially tied to its channel partner relationship.

Liquidity concerns: Cash declined from $2.75M to $2.55M quarter-over-quarter despite positive EBITDA, driven by working capital timing.

Q&A Highlights

On customer profile and benefits: CEO Fleming explained that customer profiles vary by solution — UCaaS targets 10-100 employee SMBs, IVR serves midsize banks and credit unions, and CoreEngage targets mid-market to enterprise customers with "couple of hundred users at the low end to several thousand at the high end." Their largest customer in deployment has approximately 50,000 employees.

On cloud benefits: The transition to cloud eliminates customer CapEx (hardware costs), removes on-premises maintenance burden, and converts spending from large upfront outlays to predictable monthly OpEx.

Forward Catalysts

Bottom Line

Altigen delivered another profitable quarter while executing a complex business transformation from legacy PBX to cloud-based AI-powered customer experience solutions. The company has shed unprofitable legacy business, cut operating expenses by 9%, and built the operational infrastructure to scale — all while maintaining 62%+ gross margins and a debt-free balance sheet.

The question now is whether the AI platform launches in the next 90 days can drive meaningful revenue growth and shift the narrative from "managing decline" to "accelerating growth." With subscriber additions expected to exceed churn by fiscal Q3, the inflection point management has been building toward may finally be approaching.

Altigen's next earnings call is expected in May 2026.