Revenue growth remains robust at 20.5% year-over-year as of 2026Q2, though this is offset by an operating margin of -90.0% that highlights significant scaling inefficiencies.
| Sales/Revenue | 5.62M | 4.94M | 1.5M | 1.23M | 721.52K | 1.28M |
| Revenue Growth % | 84.87% | 228.56% | 21.86% | 71.09% | -43.45% | - |
| Cost of Goods Sold | 3.87M | 3.2M | 1.02M | 1.43M | 536.74K | 798.89K |
| COGS % of Revenue | - | 64.84% | 67.66% | 115.5% | 74.39% | 62.62% |
| Gross Profit | 1.75M | 1.74M | 486.5K | -191.38K | 184.78K | 476.92K |
| Gross Margin % | 31.16% | 35.16% | 32.34% | -15.5% | 25.61% | 37.38% |
| Gross Profit Growth % | - | 257.25% | 354.21% | -203.57% | -61.25% | - |
| Operating Expenses | 9.71M | 10.82M | 10.29M | 11.91M | 10.28M | 9.68M |
| OpEx % of Revenue | - | 218.88% | 683.75% | 965.09% | 1424.24% | 758.7% |
| Selling, General & Admin | 7.12M | 7.38M | 7.81M | 10.27M | 8.21M | 7.54M |
| SG&A % of Revenue | - | 149.25% | 519.05% | 831.87% | 1138.1% | 591.1% |
| Research & Development | 2.45M | 2.37M | 2.48M | 1.64M | 2.06M | 2.14M |
| R&D % of Revenue | - | 47.91% | 164.71% | 133.22% | 286.13% | 167.59% |
| Other Operating Expenses | 142.54K | 1.07M | 0 | 0 | 0 | 0 |
| Operating Income | -7.95M | -9.08M | -9.8M | -12.1M | -10.09M | -9.2M |
| Operating Margin % | -141.48% | -183.72% | -651.41% | -980.6% | -1398.63% | -721.31% |
| Operating Income Growth % | - | 7.34% | 19.05% | -19.95% | -9.66% | - |
| EBITDA | -7.17M | -8M | -8.52M | -11.15M | -9.76M | -9.06M |
| EBITDA Margin % | -127.59% | -161.83% | -566.46% | -903.44% | -1353.37% | -710.26% |
| EBITDA Growth % | 7.56% | 6.13% | 23.59% | -14.21% | -7.76% | - |
| D&A (Non-Cash Add-back) | 780.91K | 1.08M | 1.28M | 952.51K | 326.49K | 140.99K |
| EBIT | -8.01M | -9.37M | -7.19M | -8.58M | -10.06M | -9.2M |
| Net Interest Income | -127.83K | -172.88K | -196.32K | -668.03K | -506K | -111.27K |
| Interest Income | 126.28K | 81.84K | 55.69K | 55.51K | 5.99K | 4.85K |
| Interest Expense | 254K | 254.71K | 252.01K | 723.55K | 511.99K | 116.11K |
| Other Income/Expense | -299.91K | -546.24K | 2.36M | 2.8M | -478.39K | -112.82K |
| Pretax Income | -8.25M | -9.63M | -7.44M | -9.31M | -10.57M | -9.32M |
| Pretax Margin % | -146.81% | -194.77% | -494.42% | -753.89% | -1464.93% | -730.16% |
| Income Tax | 0 | 0 | 0 | 0 | -49.44K | 0 |
| Effective Tax Rate % | 0% | 0% | 0% | 0% | 0.47% | 0% |
| Net Income | -8.25M | -9.63M | -7.44M | -9.31M | -10.52M | -9.32M |
| Net Margin % | -146.81% | -194.77% | -494.42% | -753.89% | -1458.08% | -730.16% |
| Net Income Growth % | 1.91% | -29.43% | 20.08% | 11.54% | -12.93% | - |
| Net Income (Continuing) | -8.25M | -9.63M | -7.44M | -9.31M | -10.52M | -9.32M |
| Discontinued Operations | 0 | 0 | 0 | 0 | 0 | 0 |
| Minority Interest | 0 | 0 | 0 | 0 | 0 | 0 |
| EPS (Diluted) | -4.14 | -15.78 | -188.79 | -478.80 | -3025.05 | -3091.20 |
| EPS Growth % | 85.89% | 91.64% | 60.57% | 84.17% | 2.14% | - |
| EPS (Basic) | - | -15.78 | -188.79 | -478.80 | -3025.05 | -3091.20 |
| Diluted Shares Outstanding | 1.99M | 610.17K | 39.39K | 19.44K | 3.48K | 3.01K |
| Basic Shares Outstanding | 1.99M | 610.17K | 39.39K | 19.44K | 3.48K | 3.01K |
| Dividend Payout Ratio | - | - | - | - | - | - |
Capital structure dilution risk
According to the provided quarterly income statements, DFSC has demonstrated significant top-line expansion, with revenue climbing from $485.9K in 2024Q2 to $1.5M by 2026Q2, representing a robust growth trajectory that appears to be driven by the successful deployment of tactical hardware and digitization service contracts.
The acceleration in revenue suggests that the company is successfully navigating the lengthy procurement cycles inherent in the defense sector. However, the volatility in quarter-over-quarter growth rates warrants caution, as it may indicate a reliance on lumpy, project-based revenue rather than a stable, recurring subscription model.
As reported in financial statements, DFSC's gross margin has fluctuated significantly, ranging from a low of 12.4% in 2024Q3 to a peak of 49.8% in 2024Q2, reflecting the inherent challenges of scaling specialized manufacturing and the potential impact of varying product mix on overall profitability.
The inconsistency in gross margins suggests that the company has yet to achieve the economies of scale necessary to stabilize production costs. Investors should monitor whether future margin expansion is driven by higher-margin software digitization services or if it remains tethered to the volatile costs of hardware components.
Based on the income statement data, DFSC's operating leverage remains deeply negative, with operating margins reaching -183.72% in recent periods, indicating that the company's aggressive investment in SG&A and R&D is currently far exceeding the revenue generated from its tactical defense and digitization product portfolio.
The persistent gap between gross profit and operating income implies that the company is in a high-intensity growth phase, prioritizing market penetration over immediate operational efficiency. This structure suggests that the firm may require sustained capital infusions to support its current overhead until revenue reaches a critical mass.
Analysis of the reported figures reveals a concerning disconnect between the company's rapid revenue growth and its deep net losses, which reached -95.4% of revenue in 2026Q2, raising questions about the long-term viability of the current business model without significant improvements in operational efficiency.
Short-term observers might focus on the risk that the company's cash reserves are insufficient to sustain such high levels of operational burn. The reliance on external financing to bridge the gap between current losses and future profitability suggests that shareholders face significant dilution risk if the company fails to reach a break-even inflection point.
Quick answers to the most common questions about buying DFSC stock.
For fiscal year 2025, DEFSEC Technologies Inc. (DFSC) reported total revenue of $4.9M. This represents a 287.4% increase compared to $1.3M in 2021.
DEFSEC Technologies Inc. (DFSC) reported a net loss of $9.6M for the fiscal year ending 2025.
DEFSEC Technologies Inc. (DFSC) reported an operating income of $-9.1M, resulting in an operating profit margin of -183.7%. This margin reflects the operational efficiency of the business before interest and taxes.
DEFSEC Technologies Inc. (DFSC) generated $1.7M in gross profit for the year, representing a gross profit margin of 35.2%. This demonstrates the company's core pricing power and production efficiency.