Tantalus Systems (TSE:GRID) reported record quarterly and annual results for the fourth quarter and year ended December 31, 2025, highlighting revenue growth, expanding recurring revenue, and continued commercialization of its TRUSense Gateway platform. Management also discussed evolving macro pressures tied to tariffs and component availability, while emphasizing strong customer retention and an increasingly software- and analytics-driven long-term strategy.
Fourth-quarter revenue hit a company record
Chief Financial Officer Azim Lalani said fourth-quarter revenue rose to $14.9 million, up 19% year over year and the highest quarterly revenue in company history. He attributed the increase to higher sales volumes and the conversion of new utility customers beginning projects with Tantalus.
Recurring revenue recognized in the quarter increased to $4.1 million, which management said was influenced by the full recognition of annual revenue from the renewal of two customer contracts secured during the quarter. Annual recurring revenue (ARR), reported on a forward twelve-month basis, grew by more than 14% year over year to $14.5 million heading into 2026.
Margins, profitability, and cash flow
Lalani reported gross profit margin of approximately 56% in Q4, in line with 2024. He said margins in connected devices improved due to lower provisions for customer accommodation, warranty, and inventory obsolescence compared with last year. He also noted that the connected devices segment includes tariff-related expenses, and that Tantalus absorbed tariff charges up to 5% in 2025 to support long-standing customer relationships.
The software and services segment delivered gross profit margin of 86%. Management said the quarter benefited from the execution of two full-year contracts, and Lalani cautioned that the result was above internal modeling and expected to normalize in future quarters. He also emphasized that software and services is not impacted by tariffs.
Net income in Q4 was $179,000, compared with $289,000 a year earlier, which management attributed to higher operating expenses tied to investments in sales and marketing and general and administrative spending. Adjusted EBITDA was $1.3 million, in line with the prior-year quarter.
Tantalus generated $3.3 million of cash flow from operations and $3.2 million of free cash flow during the quarter. As of December 31, 2025, available liquidity totaled approximately $21 million, consisting of $12.6 million in cash and $8.5 million of unused availability under a revolving line of credit.
Full-year 2025 milestones: revenue, recurring revenue, and adjusted EBITDA
For the full year, management highlighted several “new corporate milestones.” Revenue totaled $54.1 million, up 22% year over year. Recurring revenue recognized for the year increased 20% to $13.9 million, representing 26% of total revenue and consistent with the prior year.
Lalani said adjusted EBITDA was $3.4 million, a 6.2% adjusted EBITDA margin, representing 156% growth from the prior year. The company also posted 55% gross profit margin for the year, positive cash flow from operations of $4.7 million, and free cash flow of $3.9 million. Tantalus reported an improvement in diluted loss per share to $0.02 from a loss of $0.05 in 2024.
Management emphasized that approximately 87% of 2025 revenue came from existing customers, which the company views as evidence of relationship durability and business-model quality. Lalani also pointed to a “high watermark” ARR level and recurring revenue growth as improving visibility entering 2026.
Separately, Lalani noted the company completed a bought-deal financing on February 9, 2026, raising approximately CAD 23 million. Intended uses include sales and marketing, research and development, capital expenditures, debt reduction, and working capital. Management said the financing left Tantalus with the strongest balance sheet in its history.
Commercial progress: pipeline conversions, TRUSense Gateway, and use cases
CEO Peter Londa said the company achieved a record approximately $65 million in orders converted from its sales pipeline in 2025, translating into a 1.2 book-to-bill ratio. Londa characterized book-to-bill above 1.0 as a key industry metric and said the performance improved visibility entering 2026.
On customer activity, Londa cited examples including the City of Bolivar selecting Tantalus “because of the TRUSense Gateway,” and expansions with Riverside Public Utilities and EPB Chattanooga. He also referenced a case study in which BrightRidge used TRUConnect AMI and TRUView monitoring following Hurricane Helene in Johnson City, Tennessee, to pinpoint damage faster and accelerate restoration.
Londa said TRUSense Gateway has orders from 66 utilities, which he described as early validation of market opportunity. He discussed a “milestone commitment” from EPB Chattanooga and reiterated that existing customers can offer a more predictable path to near-term deployments. In the Q&A, he said that—among the 66 utilities—most are in the “very early innings” of adoption, and that the split between existing and new utility customers remained broadly consistent with prior commentary.
Management highlighted several use cases for TRUSense Gateway, including:
- Advanced power quality measurements to identify grid vulnerabilities, including around transformers
- Modernizing communications infrastructure and supporting multiple protocols
- Establishing a foundation for future applications such as load management and behind-the-meter capabilities
Londa said the company has not seen a utility “turn away” from the TRUSense Gateway after gaining access to it, though he acknowledged not all customers have devices in hand and deployed as the company ramps production and deployment support.
In discussing analytics and data, management pointed to joint action agency arrangements, including an example referenced as IMPA, where an analytics instance can support smaller utilities that may lack internal resources. Londa also said the company is evaluating how it could go beyond a SaaS model to deliver “analytics as a service” for utilities challenged by IT staffing constraints.
Tariffs and supply chain: fluid environment and component pressure
Management spent part of the call addressing external uncertainties. Londa said the tariff landscape remains “extremely fluid,” citing a February 20, 2026 decision by the U.S. Supreme Court invalidating tariffs imposed under the International Emergency Economic Powers Act, followed by a White House response implementing an immediate 10% tariff with a stated intention to increase it to 15%. He said Tantalus is monitoring developments at the U.S. Court of International Trade regarding potential relief and refunds, and is working with outside counsel and import brokers to preserve its rights, while keeping customers informed.
On supply chain conditions, Londa described extended lead times and pricing pressure tied to a global shortage of computing memory, which he said is being driven by demand for high-bandwidth memory used in data centers. He said the “ripple effect” is that lead times and costs are expanding by approximately 50% for memory components used in Tantalus connected devices, with secondary impacts on semiconductors as fabrication capacity is allocated toward memory.
In Q&A, Londa said memory and semiconductors represent roughly 15% to 20% of bill of materials. He said Tantalus has worked with its contract manufacturer to place advanced component orders on a rolling 12-month basis, with components remaining on the manufacturer’s balance sheet until finished goods are produced. He also said the company is considering building additional finished-goods inventory for TRUSense Gateway given its strengthened balance sheet, and that the company has not yet enacted price increases. Londa said gross margin could face a short-term erosion of “a point or two,” but that management expects more insight after first-quarter results. He also noted that standard contract terms generally include annual inflationary adjustments.
Looking ahead, Londa reiterated priorities for 2026 that include scaling TRUSense Gateway deployments, expanding recurring revenue through software and analytics, supporting existing customers while adding new utilities, and investing in systems and personnel to support growth. He also said Tantalus is interested in potential M&A, pointing to behind-the-meter control/load management capabilities and power-quality analytics as areas that could be bolstered through targeted acquisitions.
About Tantalus Systems (TSE:GRID)
Tantalus is a technology company dedicated to helping utilities modernize their distribution grids by harnessing the power of data across all their devices and systems deployed throughout the entire distribution grid. The Company offers a grid modernization platform across multiple levels: intelligent connected devices, communications networks, data management, enterprise applications and analytics. Our solutions provide utilities with the flexibility they need to get the most value from existing infrastructure investments while leveraging advanced capabilities to plan for future requirements.
