Revenue has scaled to $1.5M as of 2026Q2, yet the firm remains hampered by extreme margin volatility, with gross margins fluctuating between 12.4% and 49.8% over the last ten quarters.
| Net Interest Income | -127.83K | -172.88K | -196.32K | -668.03K | -506K | -111.27K |
| NII Growth % | 182.91% | 11.94% | 70.61% | -32.02% | -354.77% | - |
| Net Interest Margin % | -1.3% | -1.34% | -3.5% | -5.68% | -6.91% | -1.28% |
| 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 |
| Loan Loss Provision | 3.62M | 2.95M | 765.82K | 702.28K | 24.75K | 682.77K |
| Non-Interest Income | 5.5M | 4.86M | 1.45M | 1.18M | 715.53K | 1.27M |
| Non-Interest Income % | 97.75% | 98.34% | 96.3% | 95.5% | 99.17% | 99.62% |
| Total Revenue | 5.62M | 4.94M | 1.5M | 1.23M | 721.52K | 1.28M |
| Revenue Growth % | 543.37% | 228.56% | 21.86% | 71.09% | -43.45% | - |
| Non-Interest Expense | 9.71M | 10.82M | 10.29M | 11.91M | 10.28M | 9.68M |
| Efficiency Ratio | 172.63% | 218.88% | 683.75% | 965.09% | 1424.24% | 758.7% |
| Operating Income | -7.95M | -9.08M | -9.8M | -12.1M | -10.09M | -9.2M |
| Operating Margin % | -141.48% | -183.72% | -651.41% | -980.6% | -1398.62% | -721.31% |
| Operating Income Growth % | - | 7.34% | 19.05% | -19.95% | -9.66% | - |
| 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 |
| 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 |
Liquidity and dilution risk
According to the provided quarterly income statements, DEFSEC Technologies has demonstrated a clear upward revenue trajectory, growing from $485.9K in 2024Q2 to $1.5M by 2026Q2, though this expansion remains highly sensitive to the timing of lumpy government procurement cycles rather than consistent, recurring subscription-based demand.
The revenue growth appears to be driven by the successful deployment of tactical digitization projects, yet the lack of a recurring revenue base makes the top-line trajectory volatile. Investors should monitor whether the company can transition from these project-based milestones to a more predictable, high-volume delivery model to sustain this growth rate.
As reported in the financial data, gross margins have fluctuated significantly between 12.4% and 49.8% over the last ten quarters, suggesting that the company's current cost structure is heavily influenced by the variable nature of first-of-class hardware integration and project-specific engineering requirements.
The inconsistency in gross margins implies that DEFSEC has yet to achieve the economies of scale necessary to stabilize its profitability profile. This volatility warrants further investigation into whether the company can standardize its integration processes to protect margins as it attempts to scale its tactical digitization offerings.
Based on the income statement figures, DEFSEC's operating expenses consistently dwarf gross profit, resulting in an operating margin of -90.0% in 2026Q2, which indicates that the firm has not yet reached the necessary utilization threshold to cover its substantial corporate overhead and facility costs.
The persistent gap between operating income and gross profit suggests that the company is currently in a high-burn phase, prioritizing R&D and infrastructure over immediate profitability. Without a significant increase in revenue volume, the current cost structure appears unsustainable and may necessitate further capital raises to bridge the funding gap.
As indicated by the historical data, net income remains deeply negative, with losses reaching $1.5M in 2026Q2, a trend further complicated by non-operating items and potential fair value adjustments related to the DFSCW warrants that obscure the underlying operational performance of the business.
The quality of earnings is currently poor, as the company is not generating positive cash flow from operations and relies on external financing to fund its activities. Investors should be wary of the impact of non-cash items and warrant-related volatility, which may mask the true extent of the company's operational cash burn.
While the company is scaling its tactical digitization footprint, the reported figures suggest a precarious financial position, as the company's cash burn rate appears to be outpacing its ability to secure large-scale, multi-year programs of record that would otherwise justify its current operating expense structure.
Short-sellers would likely focus on the widening gap between the company's ambitious growth narrative and the reality of its negative operating margins. The risk remains that the company may run out of liquidity before it can successfully convert its pilot programs into the high-margin, recurring revenue streams required for long-term viability.
Quick answers to the most common questions about buying DFSCW stock.
DEFSEC Technologies Inc. Warrant (DFSCW) reported a net loss of $9.6M for the fiscal year ending 2025.
DEFSEC Technologies Inc. Warrant (DFSCW) 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. Warrant (DFSCW) 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.