Fiscal first quarter 2027
Filed Oct 15, 2026Revenue was $41.5 million, up 148% from the prior-year comparable period; net loss from continuing operations was $26.4 million and Adjusted EBITDA was $5.9 million.
Revenue growth and new customer commitments were substantial, but the Company reported a $26.4 million continuing-operations net loss, costs of revenues of $45.6 million, sharply higher selling, general and administrative expense, and Adjusted EBITDA below the prior-year period.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Revenue, three months ended August 31, 2026GAAP | $41.5M | – | 148% |
| Cost of revenues, three months ended August 31, 2026GAAP | $45.6M | – | 91% |
| Selling, general and administrative expense, three months ended August 31, 2026GAAP | $20.7M | – | increased approximately $20.4 million |
| Total costs and expenses, three months ended August 31, 2026 (Dollars in thousands)GAAP | $66.37M | – | – |
| Operating loss, three months ended August 31, 2026 (Dollars in thousands)GAAP | −$24.89M | – | – |
| Interest expense, net, three months ended August 31, 2026 (Dollars in thousands)GAAP | $1.56M | – | – |
| Gain on change in fair value of warrants, three months ended August 31, 2026 (Dollars in thousands)GAAP | −$22K | – | – |
| Net loss from continuing operations, three months ended August 31, 2026GAAP | $26.4M | – | – |
| Net loss per basic and diluted share from continuing operations, three months ended August 31, 2026GAAP | $0.18 | – | – |
| Net loss from discontinued operations, three months ended August 31, 2026GAAP | $16.1M | – | – |
| Net loss, three months ended August 31, 2026 (Dollars in thousands)GAAP | −$42.48M | – | – |
| Basic and diluted net loss per share, three months ended August 31, 2026GAAP | $(0.29) | – | – |
| Basic and diluted weighted average number of shares outstanding, three months ended August 31, 2026GAAP | 145,407,573 | – | – |
| EBITDA, three months ended August 31, 2026 (In thousands)non-GAAP | −$9.52M | – | – |
| Adjusted EBITDA, fiscal first quarter 2027non-GAAP | $5.9M | – | – |
| Cash flow provided by operating activities, three months ended August 31, 2026 (In thousands)GAAP | $14.63M | – | – |
| Cash flow used in investing activities, three months ended August 31, 2026 (In thousands)GAAP | −$3.06M | – | – |
| Purchases of property and equipment and other assets, three months ended August 31, 2026 (In thousands)GAAP | −$3.06M | – | – |
| Cash flow used in financing activities, three months ended August 31, 2026 (In thousands)GAAP | −$6.00M | – | – |
| Net increase (decrease) in cash, three months ended August 31, 2026 (In thousands)GAAP | $5.56M | – | – |
| Cash and cash equivalents, August 31, 2026 (Dollars in thousands)GAAP | $15.22M | – | – |
| Current portion of debt, August 31, 2026 (Dollars in thousands)GAAP | $10.54M | – | – |
| Long-term debt, August 31, 2026 (Dollars in thousands)GAAP | $151K | – | – |
| Current deferred revenue, August 31, 2026 (Dollars in thousands)GAAP | $57K | – | – |
| Long-term portion of deferred revenue, August 31, 2026 (Dollars in thousands)GAAP | $107K | – | – |
Amounts quoted below without a unit are in thousands, as in the filing’s tables. Per-share figures are as printed.
calendar Q3 2027 outlook
- Note$1 billion in annualized run-rate revenue by calendar Q3 2027
- Noteapproximately 4 MW of AI compute capacity, with completion expected in calendar Q1 2027
What drove it
- Revenue growth was primarily attributable to a new customer, including revenue from sales of AI infrastructure hardware and related support and maintenance services under resale arrangements.
- The Company secured a 50 MW AI compute deployment with Microsoft in North America.
- ChronoScale entered a strategic partnership with Nutanix to deliver enterprise-ready AI infrastructure.
- The Company entered a three-year strategic partnership with Baseten Labs, Inc. to support planned deployment of approximately 4 MW of AI compute capacity.
- ChronoScale completed the sale of the Legacy Ekso Business on September 30, 2026.
Concerns
- Cost of revenues was $45.6 million, driven by higher AI infrastructure hardware purchases, depreciation and amortization, energy costs, and personnel expenses.
- Selling, general and administrative expense rose to $20.7 million, primarily reflecting stock-based compensation, professional services, personnel, lease-related expenses, and other operating costs.
- Net loss from continuing operations was $26.4 million, compared with $11.2 million in the prior-year period.
- Adjusted EBITDA was $5.9 million, compared with $9.4 million in the fiscal first quarter of 2026.
- The Company identified risks relating to capital raising for GPUs and other capital expenditures, customer termination and refund rights, deployment timing, equipment and power availability, customer concentration, and access to capital.
What to watch
- Execution of the 50 MW Microsoft deployment and the lease and tenant fit-out arrangements for the Texas data center facility.
- Completion of the planned approximately 4 MW Baseten deployment in calendar Q1 2027.
- Implementation of the Nutanix partnership and its ability to broaden enterprise AI infrastructure adoption.
- Deployment schedules and customer-contract assumptions supporting the expected $1 billion annualized run-rate revenue by calendar Q3 2027.
- The use and potential refundability of $328.2 million in aggregate customer prepayments and the Company's ability to fund equipment and capacity deployment.
Balance sheet and cash flow
- Cash and cash equivalents were $15.2 million as of August 31, 2026.
- Total assets were $295,405 and total liabilities were $144,755 as of August 31, 2026 (Dollars in thousands).
- Property and equipment, net was $32,491 as of August 31, 2026 (Dollars in thousands).
- Operating lease right of use assets, net were $67,297 and finance lease right of use assets, net were $109,876 as of August 31, 2026 (Dollars in thousands).
- Current portion of finance lease liability was $43,478, current portion of operating lease liability was $18,998, long-term portion of finance lease liability was $2,457, and long-term portion of operating lease liability was $35,434 as of August 31, 2026 (Dollars in thousands).
- Accounts receivable was $7,557, accounts payable was $15,780, and accrued liabilities were $7,334 as of August 31, 2026 (Dollars in thousands).
- The Company received $328.2 million in aggregate prepayments under its existing customer contracts subsequent to the quarter.
- Proceeds from Grid Note from Applied Parent were $7,000 during the three months ended August 31, 2026 (In thousands).
- Repayment of finance leases was $(13,692) during the three months ended August 31, 2026 (In thousands).
Analysis
ChronoScale reported fiscal first-quarter 2027 revenue of $41.5 million, up 148% from $16.7 million in the prior-year comparable period. Management attributed the increase primarily to a new customer and to revenue from AI infrastructure hardware sales and related support and maintenance services under resale arrangements. The reported demand backdrop also included a secured 50 MW Microsoft deployment, a Nutanix partnership, and a three-year Baseten partnership supporting a planned approximately 4 MW deployment.
Profitability remained pressured. Cost of revenues was $45.6 million, up 91% from $23.9 million, while selling, general and administrative expense rose to $20.7 million from $0.4 million. The Company cited higher hardware purchases, depreciation and amortization, energy, personnel, stock-based compensation, professional services, lease-related costs, and other operating costs. Operating loss was $(24,887) and net loss from continuing operations was $26.4 million, or $0.18 per basic and diluted share.
Adjusted EBITDA was $5.9 million, compared with $9.4 million in the prior-year period. Cash flow provided by operating activities was $14,625, while purchases of property and equipment and other assets were $(3,063), both stated in thousands. Cash and cash equivalents were $15.2 million at August 31, 2026, and the Company subsequently reported receiving $328.2 million in aggregate prepayments under existing customer contracts. Current portion of debt was $10,539 and long-term debt was $151, stated in thousands.
The Legacy Ekso Business was classified as held for sale and its results were presented in discontinued operations. Discontinued-operations net loss was $16.1 million for the quarter, and the Company completed its sale on September 30, 2026. Management stated that current customer agreements and deployment schedules support expected $1 billion in annualized run-rate revenue by calendar Q3 2027, while explicitly noting that the metric is not a forecast of revenue for any specific reporting period and that actual revenue may differ materially.
The central execution issues are deployment timing, availability of GPUs, power and other equipment, financing for capital expenditures, and customer contractual rights related to termination, refunds, delay credits, or penalties. The reported operating loss, lower Adjusted EBITDA versus the prior-year period, and increased operating cost base place emphasis on whether customer deployments, including Microsoft and Baseten, proceed on the stated schedules and convert customer commitments and prepayments into recognized revenue.
Management, verbatim
We believe our strong revenue growth and expanded customer commitments validate the demand we are seeing and our opportunity to grow alongside our customers.
Cenly Chen, Chief Executive Officer of ChronoScale
Not in the filing
stated, not guessed- GAAP gross profit and gross margin
- Non-GAAP revenue, net income, net income per share, and gross margin
- Formal fiscal-period revenue guidance
- Formal operating-expense guidance
- Formal tax-rate guidance
- Prior-quarter income-statement comparisons
- Segment revenue and segment profitability
- Free cash flow
- Share repurchases, dividends, and other capital-return activity
- Cash flow from discontinued operations for the three months ended August 31, 2025
- Annualized run-rate revenue amount for a specific reporting-period revenue forecast
AlphAI 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.