Gatekeeper Systems Reports Record $12.5 Million Quarterly Revenue, Marking 68% Year-Over-Year Growth

Record Quarterly Revenue Fueled by Expansion in School Bus and Transit Segments

Gatekeeper’s fiscal Q3 2026 revenue of $12.5 million marks its highest quarterly achievement, driven by strong growth in its core transportation markets. The majority of this growth stems from the school bus segment, where the company has gained momentum with its upgraded software for video analysis and data center storage. School districts across North America are increasingly adopting Gatekeeper’s comprehensive video upgrade solutions, which bundle hardware installation with recurring monthly subscriptions to its data center platform.

New school bus contracts announced this fiscal year total approximately $15 million in business value, all including data center subscription components. Notably, a significant portion of these contracts are with new customers rather than expansions of existing ones. The transit segment also contributed robustly, with ongoing projects such as a $2.8 million contract in Oregon involving original equipment manufacturer factory installations on transit buses.

Nine-Month Results Demonstrate Sustained Revenue Growth and Profitability Gains

For the nine months ended May 31, 2026, Gatekeeper generated $28.8 million in revenue, a 39% increase from $20.7 million in the prior year period. Gross profit expanded 51% to $13.8 million from $9.1 million, with gross margin improving to 48% from 44%. This margin growth reflects effective cost scaling and disciplined pricing across its product lines.

Operating expenses rose 24% year-over-year to $13.0 million from $10.5 million. Despite this, adjusted EBITDA improved to $1.5 million compared to a loss of $0.7 million in the prior year, signaling enhanced operational leverage as revenue scales across its transportation fleet customers.

Gross Margin Expansion Highlights Operational Efficiency and Product Mix Optimization

Gatekeeper’s gross margins increased to 53% for the quarter and 48% for the nine-month period, up from 49% and 44% respectively in the prior year. This improvement indicates better cost efficiency in manufacturing and delivery, alongside a favorable shift toward higher-margin recurring subscription revenues from its data center platform.

The company’s strategy of bundling hardware with subscription-based software and analytics services supports margin growth. As more school districts and transit agencies adopt Gatekeeper’s integrated video and data solutions with ongoing subscription elements, recurring higher-margin revenue is growing relative to one-time hardware sales, boosting overall profitability.

Robust Contract Backlog and New Wins Strengthen Revenue Pipeline

Year-to-date, Gatekeeper announced new contracts totaling approximately $73 million in aggregate value. Of this backlog, $14 million was recognized as revenue during the nine months ended May 31, 2026, leaving a substantial portion to be realized in future periods. Management describes this as the strongest revenue backlog in company history, indicating continued growth momentum.

Recent notable contracts include a $1.7 million deal with Atlanta Public Schools for the Live View Wireless solution, full-fleet video upgrades with school districts in Delaware and California, and a $19 million video services contract with SEPTA for 3,000 vehicles over an initial three-year term with an option to extend to five years. Additionally, the company’s largest transit contract, a $27 million project with Long Island Rail Road, has commenced but contributed minimal revenue in fiscal Q3 2026.

Inventory Build Reflects Preparation for Contract Fulfillment

Inventory increased sharply to $17.4 million at May 31, 2026, up 235% from $5.2 million in the prior year period. This buildup aligns with new contracts announced this fiscal year, as Gatekeeper prepares to deliver hardware to school districts and transit agencies across North America. This working capital investment supports manufacturing and staging of mobile data collector units and video recording hardware for contract execution.

Gatekeeper’s strong financial position enables this inventory increase, with working capital of $37.5 million and no debt. The company also has access to a $6 million credit facility and a $7.5 million letter of credit facility with TD Bank, both undrawn as of May 31, 2026, providing liquidity for ongoing working capital needs.

Balance Sheet Strengthened by Debt-Free Status and Increased Shareholders’ Equity

As of May 31, 2026, Gatekeeper reported total assets of $44.4 million, liabilities of $4.0 million, and shareholders’ equity of $40.3 million. This marks a significant improvement from August 31, 2025, when total assets were $38.5 million, liabilities $12.4 million, and shareholders’ equity $26.1 million. The reduction in liabilities and growth in equity reflect operational profitability and strong cash flow during the nine-month period.

The company held $7.2 million in cash at May 31, 2026, combined with undrawn credit facilities totaling $13.5 million, providing ample liquidity to fund inventory, working capital, and growth initiatives. The absence of borrowed debt offers financial flexibility for scaling operations and investing in product development without debt servicing pressures.

Adjusted EBITDA Growth Demonstrates Operating Leverage and Profitability Path

Adjusted EBITDA for fiscal Q3 2026 reached $2.4 million, a 1,100% increase from $0.2 million in the prior-year quarter. For the nine-month period, adjusted EBITDA was $1.5 million versus a loss of $0.7 million previously. This metric, calculated by adding back depreciation, amortization, interest, and share-based compensation to operating income, highlights core operational profitability excluding non-cash and non-recurring items.

The sharp adjusted EBITDA improvement reflects Gatekeeper’s positive operating leverage as it expands revenue across its growing school district and transit agency customer base. The shift from near breakeven to meaningful profitability indicates maturation of the business model and absorption of fixed costs across a larger revenue base, supporting ongoing profitability growth.

Earnings Per Share Growth Indicates Profitability and Shareholder Value Creation

Gatekeeper reported basic and diluted earnings per share of $0.02 for fiscal Q3 2026, compared to a loss of $0.01 per share in the prior-year quarter. For the nine months ended May 31, 2026, earnings per share were $0.01 versus a loss of $0.01 previously. This transition from losses to positive earnings per share signals progress toward sustainable net income and shareholder value creation.

Total comprehensive income for Q3 2026 was $1.4 million compared to a $0.4 million loss in the prior-year quarter. For the nine-month period, total comprehensive income was $1.4 million versus a $0.8 million loss previously. These results reflect operational improvements and the absence of significant non-operational charges or foreign exchange losses affecting prior periods.

Extensive Mobile Data Collector Fleet and Network Scale Enhance Competitive Position

Gatekeeper has deployed over 65,000 mobile data collector units, capturing video and data daily from more than 200,000 onboard devices across school buses, transit vehicles, and other transportation assets. Serving over 60 transit agencies and 3,500 school districts across North America, the company has established significant scale and network presence in its markets. This installed base generates recurring subscription revenue via hosted software applications and data center services.

The company’s platform-as-a-service model centers on these mobile data collectors as the foundation of its data transformation strategy. As the installed base grows through new contracts and full-fleet upgrades, recurring revenue from data center subscriptions, analytics, and software licensing for video incident management expands. This recurring revenue stream enhances revenue predictability and supports the margin expansion observed in recent financial results.