Xtract One Technologies Inc (XTRAF) reported third-quarter 2025 results that reflected both the challenges of a strategic product transition and the promise of a rapidly expanding pipeline.
The company posted total revenue of approximately $3.5 million for the quarter, down from $4.7 million in the same period last year, as larger deal sizes and longer sales cycles delayed revenue recognition.
Despite the shortfall, Xtract One’s record contractual backlog and mounting demand for its new Xtract One Gateway platform underscore a positive long-term outlook.
Gross profit margin for the quarter stood at 57%, a slight decrease from 58% a year ago, impacted by one-time startup costs associated with the Gateway launch. Operating cash usage rose to $3.4 million, reflecting increased investment in inventory and product rollout as the company prepares for the Gateway’s commercial debut in July.
Sales and marketing expenses increased to $1.6 million, while research and development costs were trimmed to $1.6 million, demonstrating management’s focus on both growth and operational discipline.
The company’s contractual backlog reached $36.5 million by quarter’s end, up from $26.6 million in the prior year, with new bookings totaling $4.6 million—about 30% of which are subscription contracts. Notably, Xtract One has secured significant agreements, including a master services contract with a global media and entertainment organization and a deal with the Colorado Rockies Major League Baseball team.
The company is building inventory for its first five Gateway customers, representing $6.7 million in order value, and is on track to begin shipments in July.
CEO Peter Evans attributed booking and revenue delays primarily to customer-side factors, such as internal reorganizations, shifting U.S. economic policies, and required construction at client sites. He emphasized that Xtract One’s manufacturing and installation capacity remains robust, positioning the company to capitalize as these external hurdles subside.
Market response to the Xtract One Gateway has been strong, with a growing pipeline of opportunities now valued at approximately $100 million Canadian.
As the company pivots toward its innovative AI-powered security screening solution, management remains confident in ending fiscal 2025 on a high note, supported by a solid backlog, new customer wins, and expanding market adoption.
