The quarter marks a deliberate inflection in the Company's portfolio. ConnectM divested or wound down four sub-units of its Owned Service Network and Managed Solutions segments, activated Keen Labs with $1.9 million of first-quarter product revenue, grew Logistics 23% year-over-year to $3.1 million, and reduced SG&A by 19%—a 4% reduction in Net Loss and narrowing Adjusted EBITDA loss to $2.7 million from $3.0 million in the prior-year quarter, even as the Company absorbed $2.9 million of non-cash divestiture losses. Subsequent to quarter end, ConnectM signed the Blue Cloud India Share Swap, closed the Harry Kahn Associates defense acquisition, and effected a 1-for-32 reverse stock split in support of a planned national exchange uplisting.
First Quarter 2026 Highlights
Net loss of $6.7 million, down 4% from $7.0 million in the prior-year quarter, despite absorbing $2.9 million of non-cash losses on the dispositions of Air Temp Service Co. and Green Energy Gains.
Adjusted EBITDA loss narrowed to $(2.7) million from $(3.0) million, a $0.3 million year-over-year improvement absorbed against meaningful transition-related costs.
SG&A declined 19.0% to $5.1 million (approximately $1.2 million in absolute dollars), with SG&A as a percentage of revenue improving 770 basis points to 62% from 70%.
Revenue of $8.2 million (versus $9.0 million), reflecting the deliberate exit from legacy Owned Service Network operations, partially offset by $1.9 million of new Keen Labs product revenue and 23% growth in Logistics.
Cash and cash equivalents of $2.5 million at quarter end.
"This quarter's results reflect deliberate work that does not always show up in a single line item on the income statement," said Bhaskar Panigrahi, Chairman and Chief Executive Officer of ConnectM. "We are exiting businesses that were not earning their cost of capital and concentrating resources in the parts of ConnectM that compound—Keen Labs, Logistics, and our newly added Government and Defense Technology function. SG&A is down 19%, net loss decreased 4%, and our Adjusted EBITDA loss has narrowed; we are managing this Company for long-term per-share intrinsic value."
"First quarter results capture the cost of our year-end audit and strategic transition; we expect the second quarter and beyond to begin to show the benefit," added Nayeem Hussain, President. "We have realigned our reporting segments, we signed the Blue Cloud Share Swap that will consolidate the Company around its U.S. business lines, and we added Keen Labs, Sun Solar, and Harry Kahn Associates to the platform. Each is intended to strengthen the economics of the Company."
Strategic and Operational Highlights
Keen Labs Activation. Keen Labs, the Company's wholly-owned technology subsidiary, contributed approximately $1.9 million of product revenue in its first full reporting quarter, supplying solar, energy storage, and balance-of-system components to installation partners under VPP kit supply arrangements. Keen Labs is the platform for the Company's Hi-C™ and Hi-E™ storage product lines and connected vehicle technologies.
Sun Solar. On January 5, 2026, the Company closed a 40% equity investment in Sun Solar, LLC, a U.S. residential and small-commercial solar developer, in exchange for 468,750 shares of common stock. First-quarter equity-method earnings to ConnectM were approximately $0.28 million. Sun Solar serves as a strategic installation and distribution channel for Keen Labs.
Heat Pump Distribution. Received purchase orders of approximately $0.9 million in January 2026, $1.1 million in February 2026, and $0.8 million in April 2026, bringing cumulative year-to-date purchase commitments under the Company's heat pump distribution business to approximately $4.3 million.
Owned Service Network and Managed Solutions Rationalization. During the quarter, the Company (i) deconsolidated Air Temp Service Co., (ii) sold the Green Energy Gains business to Forge Team, Inc., (iii) commenced the wind-down of Blue Sky Electric, and (iv) provided notice of termination of the AC Authority master services agreement, recognizing approximately $2.9 million of non-cash losses on the Air Temp Service Co. and Green Energy Gains dispositions.
Government and Defense Technology Function. On April 3, 2026, the Company closed the acquisition of Harry Kahn Associates, Inc., a defense-focused technical data development company that has maintained an uninterrupted contracting relationship with the Naval Air Systems Command since 1976 and serves the U.S. Department of Defense, the U.S. Coast Guard, and major defense OEMs including Boeing, Northrop Grumman, and Lockheed Martin. The acquisition establishes ConnectM's Government and Defense Technology function as a dedicated reporting line.
Blue Cloud Share Swap, India Divestiture. On April 6, 2026, the Company entered into a definitive Share Swap Agreement with Blue Cloud Softech Solutions Limited (BSE: 539607) to transfer its India-based operating segment, held through wholly-owned subsidiary Global Impex Inc., in exchange for 160 million newly issued Blue Cloud equity shares, representing approximately 17% of Blue Cloud's post-issue equity share capital and an implied transaction value of approximately $39.6 million. Blue Cloud's shareholders approved the transaction on May 4, 2026; closing is anticipated during the fourth quarter of 2026. Upon closing, the Company's Transportation segment is expected to be substantially eliminated and the Company's operations concentrated in the United States.
Outlook
ConnectM expects the second quarter of 2026 to reflect the first full period of Keen Labs commercial scale-up, the inclusion of Harry Kahn Associates results from April 3, 2026, continued Logistics growth, and the further effect of completed Owned Service Network divestitures.
Capital Markets
The Company effected a 1-for-32 reverse stock split on April 20, 2026. ConnectM continues to pursue a national exchange uplisting, working with ThinkEquity, LLC as financial advisor. There can be no assurance that the Company will submit an application to list on a national exchange, that it will satisfy all applicable quantitative and qualitative listing and regulatory requirements, that a national exchange will approve the Company's listing application, if submitted, that the Company will meet the listing criteria, or that a proposed listing will be completed.
The Company's Quarterly Report on Form 10-Q for the period ended March 31, 2026 was filed on May 26, 2026 with the U.S. Securities and Exchange Commission and is available at www.sec.gov and at www.connectm.com.
Selected Financial Information
Condensed Consolidated Statements of Operations (Unaudited)
(in U.S. dollars; share data adjusted for 1-for-32 reverse split)
Q1 2026
Q1 2025
Change
Revenues
$8,172,553
$8,988,343
(9%)
Cost of revenues
6,307,511
5,974,610
6%
Gross profit
1,865,042
3,013,733
(38%)
Selling, general and administrative
5,090,138
6,287,176
(19%)
Loss from operations
(3,225,096
