H1 2026
Filed Aug 28, 2026Core AI Holdings Reports 56% Q2 Revenue Growth and Significant Improvement in Gross Margin
Second-quarter revenue grew 56% year-over-year and gross loss narrowed 97%, but six-month revenue declined versus the prior-year period, six-month gross loss widened, and Q2 net loss increased year-over-year.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Second-quarter revenueother | $22.4 million | – | 56% |
| Six-month revenueother | $26.1 million | – | – |
| Second-quarter cost of providing servicesother | $22.4 million | – | 52% |
| Second-quarter gross lossother | approximately $11,000 | – | 97% reduction in gross loss |
| Second-quarter gross marginother | close to breakeven | – | – |
| Six-month gross lossother | $3.1 million | – | – |
| Second-quarter net lossother | $1.6 million | – | – |
| Net cash provided by operating activities during the first six monthsother | $5.5 million | – | – |
| Cash and cash equivalents as of June 30, 2026other | approximately $12.0 million | – | – |
| Net proceeds from a private placement during the first six monthsother | approximately $4.6 million | – | – |
What drove it
- Higher advertising revenue from the Company’s mobile games following optimization of advertising placements and user acquisition strategies during the first quarter of 2026.
- The Company significantly increased advertising and user acquisition activity during the second quarter after optimizing advertising and marketing strategies.
- Second-quarter revenue increased at a substantially faster rate than the associated cost of providing services.
- Four joint venture agreements for HPC and AI data-center development were entered into during the first half of 2026.
- The Company entered into a memorandum of understanding to pursue data-center development opportunities in Malaysia.
Concerns
- Six-month revenue was $26.1 million, compared to $28.9 million for the first six months of 2025, affected by lower first-quarter revenue while the Company optimized customer acquisition and advertising spending.
- Six-month gross loss was $3.1 million, compared to $626,000 in the prior-year period, primarily reflecting higher customer acquisition costs during Q1 2026.
- Second-quarter net loss was $1.6 million, compared to $758,000 in Q2 2025.
- As of June 30, 2026, no projects had yet been presented to the data-center joint ventures for approval and no financing commitments had been secured.
- The Company states that its data-center joint ventures and related initiatives remain in their early stages.
What to watch
- Whether the Company achieves positive gross margin as it continues to refine advertising, user acquisition and monetization strategies.
- Revenue and gross-loss performance following the lower-revenue first quarter and the second-quarter increase in advertising and user acquisition activity.
- Whether joint-venture projects are presented for approval and whether financing commitments are secured.
- Execution of the Company’s expansion into HPC and AI data centers, AI-powered digital marketing, AI-driven media production and HomeGPT.
Balance sheet and cash flow
- Cash and cash equivalents were approximately $12.0 million as of June 30, 2026, compared to approximately $1.9 million at December 31, 2025.
- The Company generated approximately $5.5 million of operating cash flow during the first six months of 2026.
- The Company received approximately $4.6 million in net proceeds from a private placement during the period.
Analysis
Core AI reported a sharp second-quarter recovery in its gaming-led revenue and unit economics. Second-quarter revenue increased 56% year-over-year to $22.4 million, driven primarily by higher advertising revenue from mobile games following optimization of advertising placements and user acquisition strategies. Cost of providing services increased 52% year-over-year to $22.4 million, while gross loss narrowed 97% to approximately $11,000. The Company described gross margin as close to breakeven.
The six-month figures remain weaker than the second-quarter exit rate. Six-month revenue was $26.1 million, compared with $28.9 million in the first six months of 2025, reflecting lower first-quarter revenue as the Company reduced advertising and user acquisition activity amid higher customer acquisition costs and lower returns on certain placements. Six-month gross loss was $3.1 million, compared with $626,000 in the prior-year period. Q2 substantially offset the first-quarter pressure, but second-quarter net loss was $1.6 million, compared with $758,000 in Q2 2025.
Liquidity improved materially during the period. Cash and cash equivalents were approximately $12.0 million as of June 30, 2026, compared with approximately $1.9 million at December 31, 2025. The Company generated approximately $5.5 million of operating cash flow during the first six months and received approximately $4.6 million in net proceeds from a private placement. The filing did not report debt, capital expenditures, free cash flow, repurchases, or dividends.
Strategically, Core AI is seeking to extend beyond AI-enabled gaming into HPC and AI data centers, AI-powered digital marketing, AI-driven media production, and HomeGPT. It entered into four data-center joint ventures during the first half and signed a memorandum of understanding regarding Malaysia opportunities. These initiatives remain preliminary: as of June 30, 2026, no projects had been presented to the joint ventures for approval and no financing commitments had been secured. The release provided no quantitative forward guidance, leaving gross-margin progression, operating execution, project approvals, and financing as the principal disclosed items to monitor.
Management, verbatim
Our second quarter demonstrated meaningful progress in both revenue growth and operating efficiency. Revenue increased 56% year-over-year, while our gross loss declined by 97% and approached breakeven. These results reflect the impact of the operational adjustments we made to our advertising and user acquisition strategy and our focus on improving the quality and efficiency of our growth.
Aitan Zacharin, Chief Executive Officer of Core AI Holdings
Our objective is to build Core AI into a diversified AI technology and infrastructure platform. We are executing across multiple layers of the AI ecosystem, from AI-powered applications and digital platforms to the development of HPC and AI infrastructure. The four data-center joint ventures and additional international initiatives established during the first half of the year represent important steps in that strategy.
Aitan Zacharin, Chief Executive Officer of Core AI Holdings
We entered the second half of 2026 with substantially greater liquidity and a significantly broader strategic platform than we had at the beginning of the year. Our focus now is on disciplined execution—continuing to improve the economics of our existing businesses while advancing our AI infrastructure initiatives and converting our strategic relationships into tangible opportunities.
Aitan Zacharin, Chief Executive Officer of Core AI Holdings
Not in the filing
stated, not guessed- GAAP or IFRS accounting basis was not stated in the provided release.
- Operating income or loss was not reported.
- Operating expenses were not reported.
- Income tax expense or benefit and tax rate were not reported.
- Earnings per share, diluted share count, and non-GAAP earnings measures were not reported.
- Free cash flow and capital expenditures were not reported.
- Debt and other balance-sheet liabilities were not reported.
- Share repurchases and dividends were not reported.
- Revenue by operating segment was not reported.
- Forward revenue, gross-margin, operating-expense, tax-rate, or other quantitative guidance was not provided.
- Prior-quarter comparisons for revenue, cost of providing services, gross loss, net loss, and operating cash flow were not reported.
- A percentage gross-margin figure was not reported.
- Prior-year comparison for cash and cash equivalents was not reported.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.