Executive Summary

Q1 2026 revenue was $5.58M, up 6.2% year over year, with gross margin improving to 30.0% and operating income turning positive to $0.35M; net income was $0.51M ($0.05 EPS) .
Results exceeded prior outlook for Q1 (company had guided ~$4.9M), largely due to accelerated project deliveries; management guided Q2 2026 revenue to approximately $3.4M with gross margin percentage returning to prior year’s lower levels, reflecting seasonality and mix .
Post‑quarter, MiT acquired the DCS cinema loudspeaker line for ~$1.5M cash to expand premium audio offerings and international reach; management expects synergy with LEA amplifiers and stronger traction in Europe/Middle East .
Stock reaction around the print was mixed: down ~0.68% in regular trading then up ~7.9% premarket per Investing.com recap; catalysts include guidance dynamics, margin trajectory, and DCS product strategy .

What Went Well and What Went Wrong

What Went Well

Margin improvement and cost discipline: Gross margin rose to 30.0% (vs 26.1% LY), operating expenses fell 8%, turning operating income to $0.35M; net income improved to $0.51M aided by a $0.13M non‑cash debt extinguishment gain .
Execution on marquee projects: Delivered a state‑of‑the‑art screening room at NYC’s Cherry Lane Theatre and Doby Atmos/laser projection upgrades for Alamo Drafthouse locations, showcasing turnkey capabilities .
Strategic expansion in premium audio: Acquisition of the DCS loudspeaker line positions MiT for immersive audio opportunities and international market dialogues; “an important initiative in building a line of premium products… bolstering our competitive position and growth potential” (CEO) .

What Went Wrong

Pull‑forward created near‑term air pocket: Q1 revenue upside was due to accelerated project deliveries; management guided Q2 to ~$3.4M and gross margin reverting to prior year’s lower levels due to seasonality/mix .
Interest income decline partially offsetting other income: Net income benefited from a non‑cash debt extinguishment gain, which more than offset decreased interest income; without the gain, bottom‑line leverage would be lower .
Ongoing customer decision‑making delays and slower pace on approved projects (macro/industry uncertainty), with revenue weighting to 2H of FY26 and avoidance of upgrades during holiday windows .

Financial Results

Metric	Q3 2025	Q4 2025	Q1 2026
Revenue ($USD Millions)	$3.571	$5.883	$5.582
Gross Profit ($USD Millions)	$1.063	$1.202	$1.674
Gross Margin (%)	29.8%	20.4%	30.0%
Operating Income ($USD Millions)	-$0.270	-$0.187	$0.350
Net Income ($USD Millions)	-$0.240	-$0.156	$0.509
Diluted EPS ($USD)	-$0.02	-$0.02	$0.05

Segment breakdown: The company did not report segment disclosures in Q1 2026 materials .

Key KPIs and balance sheet items

KPI	Q3 2025	Q4 2025	Q1 2026
Cash and Equivalents ($USD Millions)	$5.369	$5.715	$5.548
Working Capital ($USD Millions)	>$4.4 (company commentary)	—	$4.8
Accounts Receivable ($USD Millions)	$0.940	$1.464	$1.839
Inventories ($USD Millions)	$3.065	$2.066	$1.719
Customer Deposits ($USD Millions)	$1.534	$1.101	$0.933

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($USD Millions)	Q1 2026	~$4.9 (from FY25 release)	Actual $5.58	Beat vs guidance (accelerated deliveries)
Revenue ($USD Millions)	Q2 2026	—	~$3.4	New (seasonal slowdown; mix)
Gross Margin (%)	Q2 2026	—	“returning to prior year’s lower levels”	Lower (seasonality/mix)

No explicit guidance was provided for tax rate, OpEx, OI&E, or dividends in Q1 2026 materials .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2025, Q4 2025)	Current Period (Q1 2026)	Trend
Cinema technology refresh (laser projection, audio)	Focus on higher‑margin opportunities; signed multi‑year projector refresh contracts	Margin uplift driven by mix; continued pipeline optimism despite timing variability	Improving margin mix; timing remains fluid
Customer decision delays / macro	Economic uncertainties slowing starts and pacing of approved projects	Seasonal slowdown in Q2 due to holiday windows; pull‑forward impacted Q2 setup	Persistent but manageable
Premium audio / DCS strategy	Noted immersive audio opportunity; ongoing product expansion	Acquired DCS loudspeaker line to strengthen premium audio offering and international reach	Positive strategic expansion
International expansion	Planting seeds for Europe; DV LED with Samsung/LG on select projects	DCS expected to support traction in Europe and Middle East	Building momentum
Cost discipline	Operating expenses trending lower; opex cuts improved bottom line	OpEx down ~8% YoY; margin/cost efforts to offset seasonality	Sustained execution

Management Commentary

CEO (Phil Rafnson): “We remain cautiously optimistic regarding our pipeline… Our recent purchase of the DCS cinema loudspeaker line is an important initiative in building a line of premium products and service capabilities, while bolstering our competitive position and growth potential.”
COO (Francois Godfrey): “Immersive audio capabilities are at the forefront of the cinema experience… we expect a solid reception in both domestic and markets overseas, as we develop plans to build traction, particularly in Europe and the Middle East.”
CFO (Bill Greene): Q1 2026 operating income turned positive; net income improved aided by a $128k non‑cash debt extinguishment gain; cash ended at $5.55M and working capital $4.8M .
Call framing: The quarter benefited from accelerated deliveries; Q2 seasonally slower due to holiday release windows; margin expected to revert toward prior year levels (lower than 30%) .

Q&A Highlights

DCS product acceptance and synergy: Investors asked about the DCS speaker line potential; management cited strong market acceptance and synergies with LEA amplifiers, with plans for international expansion .
Guidance clarification: Q2 revenue guide (~$3.4M) reflects seasonality and project timing; gross margin expected to revert toward prior-year levels due to mix .
Pipeline and timing: Management reiterated the pipeline strength and industry dialogues, while highlighting the potential for capital spending to increase with stronger winter box office traffic .
Transcript availability: The company indicated transcripts would be posted ~48 hours after the event; multiple third‑party sources carried the transcript on Nov 14–17 .

Estimates Context

Coverage appears limited; S&P Global consensus for Q1 2026 EPS and revenue was not available in our pull. Actual revenue was $5.582M (S&P record of actual), consistent with company reporting .
Values marked with an asterisk are retrieved from S&P Global.

Metric	Q1 2026 Consensus	Q1 2026 Actual	Q2 2026 Consensus
Revenue ($USD Millions)	—*	$5.582*	—*
Primary EPS ($USD)	—*	$0.05	—*

Note: Values retrieved from S&P Global. Consensus unavailable/limited for MITQ in these periods.*

Implication: With no formal Street anchors, estimate revisions will likely track company guidance—Q2 revenue guide at ~$3.4M and margin normalization; longer‑term models should incorporate premium audio (DCS), projector refresh cycle, and international expansion .

Key Takeaways for Investors

Q1 print beat prior guidance on revenue; margin mix strong. Expect a seasonal reset in Q2 and margin normalization, then re‑acceleration in 2H FY26 as project timing improves; watch conversion of pipeline to signed orders .
DCS acquisition should enhance premium audio offerings, cross‑sell with LEA, and open international doors; monitor initial orders, lead times, and OEM manufacturing execution .
Cost discipline is delivering—OpEx down and cash stable; with no long‑term debt and working capital of ~$4.8M, MiT has runway to execute while weathering timing variability .
Near‑term trading: Expect volatility around Q2 guide and margin normalization; strength in box office could catalyze capex decisions, offering upside to 2H .
Medium‑term thesis: Laser refresh cycle, DV LED, PLF upgrades, and immersive audio expansion underpin multi‑year growth; DCS strengthens product moat and pricing potential .
Watch list: Conversion of the three‑year projector refresh contracts, European/Middle East traction for DCS, and cadence of marquee projects (Cherry Lane, Cannon Beach, etc.) .
Risk factors: Customer decision delays, seasonality, and mix shifts can swing quarterly margins; limited Street coverage may increase price volatility on company‑specific updates .

Sources: Q1 2026 8‑K press release and financial statements , FY/Q4 2025 8‑K , Q3 2025 8‑K , Q1 2026 earnings call transcript availability and excerpts , DCS press releases , Investing.com call summary .

MOVING iMAGE TECHNOLOGIES INC. (MITQ)·Q1 2026 Earnings Summary