KELSO TECHNOLOGIES INC (KIQSF): Financial results for Q3 2026
KELSO TECHNOLOGIES INC (KIQSF) furnished an SEC Form 6-K — earnings release. NEWS RELEASE Kelso Technologies Inc. November 5, 2026 Canada: TSX: KLS KELSO TECHNOLOGIES INC. FINANCIAL RESULTS FOR THE QUARTER ENDED SEPTEMBER 30, 2026 West Kelowna, British Columbia and Bonham, Texas - Kelso Technologies Inc. ("Kelso" or the "Company"), (TSX: KLS) reports that
How this was made
The 30-second read
Why it matters
The earnings miss and loss are likely to depress the share price in the short term.
Market read
Earnings release introduces new negative financial data for a micro‑cap industrial firm, offering a short‑term trading signal.
What to watch
Strong cash position and no term debt provide runway for a turnaround.
Kelso Q3 2026 revenue fell to $1,756,751 from $2,808,144 as tank car deliveries slowed; net loss of ($454,901) against net income of $182,851 a year earlier
Revenue, gross profit, net income and Adjusted EBITDA (loss) all declined sharply year over year in both the quarter and the nine months, and the company reports a net loss and negative Adjusted EBITDA for the quarter. Cash fell from $399,375 to $81,974 and the company drew $500,000 on its revolving credit facility. Management points to lower operating expenses and a Angle Valve approval as positives, but the filing does not quantify revenue from the new product.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenues, Q3 2026 (three months ended Sept 30)other | $1,756,751 | – | – |
| Revenues, nine months 2026 (nine months ended Sept 30)other | $5,751,306 | – | – |
| Gross profit, Q3 2026other | $531,995 | – | – |
| Gross profit margin, Q3 2026other | 30% | – | – |
| Gross profit, nine months 2026other | $1,909,624 | – | – |
| Gross profit margin, nine months 2026other | 33% | – | – |
| Expenses including non-cash items, Q3 2026other | $993,609 | – | – |
| Expenses including non-cash items, nine months 2026other | $3,125,268 | – | – |
| Operating expenses before foreign exchange and non-cash share-based expense, Q3 2026non-GAAP | $954,240 | – | 8% below the third quarter of 2025 |
| Accounting, audit and legal fees, Q3 2026other | $67,992 | – | declined 61% |
| Accounting, audit and legal fees, nine months 2026other | $328,283 | – | declined 24% |
| Income tax expense (recovery), Q3 2026other | $5,000 | – | – |
| Interest expense, Q3 2026other | $8,095 | – | – |
| Income from discontinued operations, Q3 2026other | $11,365 | – | – |
| Income from discontinued operations, nine months 2026other | $11,333 | – | – |
| Net income (loss), Q3 2026other | ($454,901) | – | – |
| Net income (loss), nine months 2026other | ($1,212,859) | – | – |
| Basic/diluted earnings (loss) per share, continuing operations, Q3 2026other | ($0.01) | – | – |
| Basic/diluted earnings (loss) per share, continuing operations, nine months 2026other | ($0.02) | – | – |
| Adjusted EBITDA (loss), Q3 2026non-GAAP | ($411,351) | – | – |
| Net cash used in operating activities, nine months 2026other | $805,721 | – | – |
| Decrease in cash, nine months 2026other | $317,401 | – | – |
| Cash on deposit at Sept 30, 2026 (vs Dec 31, 2025 $399,375)other | $81,974 | – | – |
| Working capital at Sept 30, 2026 (vs Dec 31, 2025 $2,541,625)other | $1,536,394 | – | – |
| Total assets at Sept 30, 2026 (vs Dec 31, 2025 $5,469,476)other | $5,102,680 | – | – |
| Shareholders' equity (net equity) at Sept 30, 2026 (vs Dec 31, 2025 $4,676,425)other | $3,569,211 | – | – |
| Revolving credit facility drawn at Sept 30, 2026other | $500,000 | – | – |
Capital returns
- No cash dividends or share repurchases are reported in the filing for the quarter or nine months.
- During the second quarter the Company settled an $80,000 obligation through the issuance of 800,000 common shares upon the vesting of restricted share units, which the filing describes as conserving cash.
- Stock options (4,500,000) and restricted share units (203,329) outstanding together represent 8.4% of common shares outstanding (56,100,085), within the 20% limit under the Omnibus Equity Incentive Plan, as stated by the Company.
What drove it
- The Company attributes lower revenue to the industry-wide reduction in North American tank car deliveries, which it says industry forecasts expect to decline by more than 35% in 2026 (to an estimated 6,387 cars from 9,927 in 2025).
- The Company states that operating expenses before foreign exchange and non-cash share-based expense declined for a third consecutive quarter, from approximately $1,096,000 in Q1 2026 to $1,011,380 in Q2 2026 and $954,240 in Q3 2026, and attributes this to cost management measures.
- The Company attributes lower accounting, audit and legal fees to the completion of the elevated FY2025 audit and disclosure cycle.
- The Company states that discontinued operations (KIQ X wind-down) contributed income of $11,365 in the quarter, with the sublease of the West Kelowna facility offsetting the remaining lease obligation, which expires in January 2027.
- The Company states that AAR full production approval of the 2" angle valve (K2AV), announced September 14, 2026, completes the Kelso Pressure Car Kit and that management believes the approval should positively impact revenue beginning in fiscal 2027.
- The Company states that its fully domestic production and supply chain in Bonham, Texas insulates operations from tariff-related uncertainty.
Concerns
- Revenues fell to $1,756,751 in Q3 2026 from $2,808,144 in Q3 2025, and to $5,751,306 for the nine months from $8,609,426.
- Gross profit margin fell to 30% in Q3 2026 from 42% in the prior-year quarter, and to 33% for the nine months from 42%.
- Net loss of ($454,901) in Q3 2026 compares with net income of $182,851 a year earlier; the nine-month net loss was ($1,212,859) against net income of $667,313.
- Adjusted EBITDA (loss), a non-GAAP measure, was ($411,351) in Q3 2026 against $218,880 in Q3 2025.
- Cash fell to $81,974 at Sept 30, 2026 from $399,375 at Dec 31, 2025, and the Company drew $500,000 on its revolving credit facility at prime plus 1.00%.
- Accounts payable and accrued liabilities rose to $998,367 from $628,002 at Dec 31, 2025.
- Shareholders' equity declined to $3,569,211 from $4,676,425 at Dec 31, 2025.
- The filing gives no quantified revenue expectation for the K2AV and no numerical guidance for FY2026 or later periods.
- The Company's risk factors include the risk that industry forecasts prove inaccurate, that the K2AV revenue may be lower than or arise later than expected, and that the Bottom Outlet Valve may not receive final AAR approval in 2026.
What to watch
- Commencement and size of K2AV commercial deliveries, which the filing says are expected to start soon, and the revenue impact the Company expects beginning in fiscal 2027.
- Outcome of the AAR teardown of the Bottom Outlet Valve and the expected final AAR approval in 2026, subject to a satisfactory teardown.
- Whether operating expenses before foreign exchange and non-cash share-based expense continue to decline in Q4 2026, as management states the cost measures are expected to benefit the fourth quarter.
- Cash balance and use of the $500,000 undrawn revolving credit facility as the Company funds working capital through the downturn.
- Progress on the strategic initiatives referenced by management, including diversification, new partnerships and potential vertical integration, on which the Company says it will provide updates when concluded.
- Timing of the expected recovery in North American tank car builds, which industry forecasts place at approximately 7,850 cars in 2027 and 10,700 cars in 2028 according to the filing.
Balance sheet and cash flow
- Cash on deposit $81,974 at Sept 30, 2026 versus $399,375 at Dec 31, 2025; cash decreased by $317,401 in the nine months, reflecting net cash used in operating activities of $805,721, partially offset by $500,000 of line of credit advances.
- Accounts receivable $698,399 versus $632,568 at Dec 31, 2025; prepaid expenses $91,643 versus $80,015; inventory $2,197,847 versus $2,206,770.
- Accounts payable and accrued liabilities $998,367 versus $628,002 at Dec 31, 2025.
- Income tax payable $16,104 at Sept 30, 2026 versus $92,104 at Dec 31, 2025.
- Working capital ratio of 2.0 to 1 at Sept 30, 2026.
- Revolving credit facility of $1,000,000: $500,000 drawn and $500,000 available. Drawings bear interest at WSJ Prime plus 1.00%; WSJ Prime was 7.00% at Sept 30, 2026. The facility is secured by a general security agreement over the Company's assets.
- The filing reports no term debt.
- Management states it anticipates that capital resources and operations will enable it to continue conducting business as planned for the foreseeable future.
Analysis
Kelso reported Q3 2026 revenue of $1,756,751, against $2,808,144 in the prior-year quarter, and nine-month revenue of $5,751,306 against $8,609,426. The Company attributes the decline to the industry-wide reduction in North American tank car deliveries and cites industry forecasts of a decline of more than 35% in 2026. Gross profit was $531,995 (30% margin) for the quarter, against $1,166,259 (42%) a year earlier, and $1,909,624 (33%) for the nine months against $3,651,459 (42%). The margin compression sits alongside a substantially fixed cost base, which the filing acknowledges.
On costs, the filing reports that operating expenses before foreign exchange and non-cash share-based expense were $954,240 in Q3 2026, down from $1,011,380 in Q2 2026 and described as 8% below Q3 2025. Total expenses including non-cash items were $993,609 in the quarter against $1,012,730 a year earlier, and $3,125,268 for the nine months against $2,932,689. Accounting, audit and legal fees fell to $67,992 in the quarter from $174,651 (a decline the Company describes as 61%) and to $328,283 for the nine months (a 24% decline), which the Company links to the completion of the FY2025 audit and disclosure cycle. The net loss was ($454,901) in Q3 2026 against net income of $182,851 a year earlier, and ($1,212,859) for the nine months against $667,313. Adjusted EBITDA, a non-IFRS measure, was ($411,351) against $218,880.
The balance sheet shows lower liquidity. Cash was $81,974 at Sept 30, 2026, against $399,375 at Dec 31, 2025, after net cash used in operating activities of $805,721 for the nine months, partly offset by $500,000 of line of credit advances. Working capital declined to $1,536,394 from $2,541,625 and total assets to $5,102,680 from $5,469,476. Net equity was $3,569,211 against $4,676,425. Accounts payable and accrued liabilities rose to $998,367 from $628,002. The Company reports no term debt and a working capital ratio of 2.0 to 1. The filing states that management anticipates capital resources will support operations as planned for the foreseeable future.
The main forward items are the K2AV angle valve, which received AAR production approval on September 14, 2026, and which management says should positively affect revenue beginning in fiscal 2027, and the Bottom Outlet Valve, which the Company expects to receive final AAR approval in 2026 subject to a satisfactory teardown. The filing does not quantify the expected revenue from either product and provides no numerical guidance. The Company also reports that discontinued operations contributed income of $11,365 in the quarter, with the West Kelowna sublease offsetting the remaining lease obligation that expires in January 2027. Capital returns were limited to an $80,000 obligation settled through the issuance of 800,000 shares in Q2 2026. The stock option and RSU overhang is reported at 8.4% of common shares outstanding.
Not in the filing
stated, not guessed- No numerical revenue, margin, expense or earnings guidance for FY2026 or later periods is provided; guidance is null.
- No segment or product-line revenue breakdown is provided.
- No prior-year (Sept 30, 2025) balance sheet figures are printed for cash, working capital, total assets, net equity or accounts receivable; comparisons are to Dec 31, 2025.
- Year-over-year percentage changes for revenue, gross profit, gross margin, net income, EPS and cash are not printed; they are left null.
- Nine-month prior-year figures for accounting, audit and legal fees are not printed as dollar amounts; only the 24% change is printed.
- Prior-period comparative for discontinued operations is described as 'a loss of $95,493 in the comparative period' without specifying the period; it is not assigned to any field.
- Operating income, nine-month Adjusted EBITDA, Q3 2026 operating and investing cash flows, and quarter-end cash flow detail are not printed.
- Prior-year and prior-quarter comparatives for income from discontinued operations are not printed for the same period length.
- Discrete EPS for the Q3 2025 discontinued operations line is printed as $0.00 in summary; no further EPS detail is printed for discontinued operations in 2026.
- No executive quotations beyond the sign-off attribution are present in the release text.
- Share price reaction and analyst consensus are not provided in the filing.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
Kelso Technologies provides railcar components; Q3 2026 results show a loss amid industry-wide delivery decline.
Market effects
Signals weakness in the North American tank car manufacturing sector.
May weigh on other TSX industrial stocks.
Limited, confined to niche rail equipment market.
Counterpoint
If the new angle valve gains market traction in 2027, the loss could be a temporary dip.
Key entities
- companyKelso Technologies Inc.
Railcar component manufacturer listed on TSX.
