Martello turns profitable in Q4 FY26 with positive adjusted EBITDA
Martello Technologies Group Inc. reported positive adjusted EBITDA of $504,000 in Q4 FY26, a turnaround from a loss of $820,000 in the prior year. Revenue declined 17% to $2.8 million for the quarter and 18% to $11.87 million for the full year, driven by lower legacy product renewals. The company's operational restructuring reduced quarterly operating expenses by 56% to $1.87 million.
*this image is generated using AI for illustrative purposes only.
Martello Technologies Group Inc. achieved positive adjusted EBITDA in Q4 FY26, marking a significant turnaround from a loss in the prior year and positioning the company for sustained profitable growth. The company reported adjusted EBITDA of $504,000 for the three months ended March 31, 2026, compared to a loss of $820,000 in the same period of 2025. This milestone follows an operational restructuring in Q3 FY26 and disciplined financial management, which also drove a 56% reduction in quarterly operating expenses to $1.87 million.
Revenue for the quarter declined 17% to $2.8 million, while annual revenue for FY26 fell 18% to $11.87 million. The decreases were primarily due to lower renewal rates on sunsetting legacy product offerings. Despite the revenue decline, gross margin improved to 90.4% in Q4 FY26 from 86.1% in Q4 FY25, driven by reduced costs in the Modern Workplace Optimization segment. The company reported a net profit of $127,000 for the quarter, compared to a net loss of $1.61 million in the prior year.
Strategic Partnership and Operational Focus
Martello's strategic partnership with Mitel remained a key driver, with the Mitel business segment contributing 55% of total revenues in Q4 FY26 and 51% in FY26. Revenue from this segment decreased by 6% in Q4 FY26 and 8% in FY26, attributed to a shift in the revenue mix that is now stabilizing. Management is exploring new Go-to-Market models with Mitel to expand beyond the current Software Assurance model into enterprise customers and partners. Gross margin in the Mitel business segment remained strong at 97% in Q4 FY26.
Financial Performance
The company's focus on cost reduction and efficiency is evident in the financial results. Operating expenses for Q4 FY26 decreased by 56% to $1.87 million, primarily due to headcount reductions. For the full year, operating expenses increased to $21.56 million, largely due to a $6.09 million impairment of intangible assets and $2.7 million in one-time termination costs. Normalized for these items, operating expenses for FY26 decreased by 24% to $12.7 million.
| Financial Metric (in 000's) | Q4 FY26 | Q4 FY25 | FY26 | FY25 |
|---|---|---|---|---|
| Sales | $2,797 | $3,376 | $11,872 | $14,531 |
| Gross Margin | $2,529 | $2,908 | $10,197 | $12,530 |
| Operating Expenses | $1,866 | $4,249 | $21,564 | $16,669 |
| Net Profit (Loss) | $127 | $(1,607) | $(13,024) | $(5,696) |
| Adjusted EBITDA | $504 | $(820) | $(1,488) | $(2,022) |
Liquidity and Future Outlook
Martello's cash and short-term investments balance stood at $2.87 million as of March 31, 2026, down from $6.69 million a year earlier. The decrease was primarily due to cash used in operating activities, partially offset by a $2.0 million loan received from Wesley Clover International in Q3 FY26. Management remains focused on strengthening financial performance and generating positive operating cash flow, with continued investment in product innovation for the Mitel Performance Analytics business.
What specific new Go-to-Market models with Mitel does management plan to implement to capture enterprise customers?
Can the current cash balance of $2.87 million sustain operations until positive operating cash flow is generated?
How will the company offset the revenue decline from sunsetting legacy products in the coming fiscal year?
20
Create Custom Screeners 
Access 200+ Pre-built Filters 
Use 50+ Readymade Screener 
