CETX — Q3 2026 Financial Report Analysis

Acquisitions lift revenue 8.7%, but the businesses Cemtrex already owned shrank and the loss is still mostly paper charges

Cemtrex is a small Long Island-based holding company with three businesses: Vicon (video surveillance cameras, software and access control), Advanced Industrial Services (rigging, millwright and maintenance work inside factories) and, since January 2026, Invocon (sensors and telemetry systems for satellites, rockets and missile-defense programs). Its fiscal year ends September 30, so the quarter to June 30, 2026 is its fiscal third quarter.

Revenue rose 8.7% to $18.4 million, but all of the growth came from businesses bought this year: Invocon (acquired January 8 for $7.06 million cash) added $2.2 million, and the Richland Industries fabrication shop in Tennessee (acquired February 5) is inside the Industrial Services number. The security business fell 18%. Cemtrex lost $4.5 million, slightly less than a year earlier, and roughly half of that loss was a non-cash revaluation of warrants.

At a glance

• Revenue +8.7% to $18.4M — but only because of acquisitions. Invocon alone added $2.2M; without it revenue would have fallen about 4%, and Industrial Services' 6% growth also came "mainly" from Richland, per management.
• Operating loss widened to $1.2M (–6.5% of revenue) from $0.6M. Both older segments swung into the red; only the new aerospace unit made money ($1.0M operating profit on 87% gross margin).
• The share count went up about 15-fold in nine months. After adjusting for two reverse splits, common shares grew from 83,061 at September 30, 2025 to 1,259,716 at June 30, 2026, and to 1,721,141 by August 12, mostly from paying off debt with stock, warrant exercises and $10M of offerings.

The quarter in numbers

Gross margin is the share of revenue left after the direct cost of the products and services sold. Operating margin is what remains after running the business too (overheads, R&D), before interest, warrant revaluations and tax.

Segment by segment

Security (Vicon): revenue –18%, segment operating loss $0.27M. Management blames "delays in shipping from increased production time on some of our component products" and says it is buying extra inventory to get around the supply problem. Segment gross margin fell to 49% from 52% on higher component costs, tariffs and fuel surcharges on shipping; the company says it has applied for tariff refunds but hasn't received them. Over nine months, Security revenue is down 42%, mainly because the prior year included a single $10.4 million order.

Industrial Services (AIS): revenue +6%, but segment swung from a $0.82M operating profit to a $0.71M loss. Gross margin dropped to 27% from 36% "as the Company works to increase efficiency for its recent acquisition, Richland." Segment G&A rose to $3.07M from $2.37M and depreciation to $0.34M from $0.23M, reflecting the larger asset base — Cemtrex also bought Richland's main facility for $4.9M, mostly with a $3.92M bank mortgage.

Aerospace & Defense (Invocon): $2.2M revenue, 87% gross margin, $1.0M operating profit. This was the only profitable segment, and it is new. Because it was acquired in January there is no year-ago figure; the filing's pro forma table (results as if Invocon had been owned all along) implies Invocon had about $1.1M of revenue in the year-ago quarter, so this quarter looks like a strong one for it. A single quarter at 87% margin is too short a record to assume it repeats.

What the headline numbers hide

• Underlying revenue went backwards. The filing's two pro forma tables put year-ago quarterly revenue at $18.05M including Invocon and $19.13M including Richland, against $16.97M reported. Adding both back implies the combined businesses had roughly $20M of revenue a year ago versus $18.4M now — a decline of about 9% on a like-for-like basis (our calculation from the two separate pro forma tables, so treat it as approximate).
• Most of the net loss is non-cash, but that doesn't make it harmless. Of the $4.48M quarterly loss, $2.20M was a rise in the value of outstanding warrants (when the share price moves, the accounting value of these "rights to buy shares" is marked up or down). Interest expense of $1.08M included $0.47M of "excess value of shares issued" when debt was settled in stock — lenders received shares worth more than the debt they cancelled. Over nine months that excess value came to $12.27M of the $13.77M total interest expense. It doesn't use cash, but it is a real cost to existing shareholders in the form of dilution.
• Cash flow turned negative. Operating activities used $4.90M in the nine months, versus generating $3.41M a year earlier (which included the large one-off security order). The gap was filled by $10.0M of equity offerings, $5.79M of warrant exercises and $7.0M of new notes.
• One-offs flatter the nine-month figure. A $2.07M "bargain purchase gain" on Richland (the assets were valued above the price paid) was booked in the nine months; it is non-cash and based on a preliminary valuation. Against that, there was a $0.44M write-off of demonstration equipment and $1.23M of losses on a crypto holding (the company holds $0.97M of digital assets and earns SOL staking rewards).
• Going-concern warning. The filing states there is "substantial doubt" about the company's ability to continue as a going concern — i.e. that it can keep operating for the next 12 months without new money. It cites $10.45M of debt due over the next fiscal year against $9.30M of cash and restricted cash (plus $3.70M of marketable securities and about $0.62M of unused credit line), and says that absent new capital or refinancing "the Company will be unable to meet its obligations as they become due."
• Per-share figures are not comparable. Two reverse splits (15-for-1 in September 2025 and 10-for-1 in June 2026) and heavy issuance make the loss per share swing for reasons that have nothing to do with operations. The filing's prior-year weighted share count (890,432) also doesn't reconcile cleanly with its own equity table (23,413 shares outstanding at June 30, 2025), so we don't calculate an EPS change.
• Listing risk. A new Nasdaq rule approved on July 22, 2026 requires at least $5M of market value of listed shares, with no cure period. Cemtrex says it was at about $5.25M on August 12 (1.72M shares at roughly $3.05) and has filed a petition with the SEC that, for now, stays the rule.
• Restated comparison. The year-ago net loss attributable to shareholders was corrected to $4.63M from $4.54M for an immaterial error in how the minority-interest share was recorded.

Takeaway: Cemtrex is buying growth faster than its existing businesses are producing it. Strip out Invocon and Richland and revenue fell, both legacy segments lost money at the operating level, and the company is funding itself by issuing shares — the share count rose roughly 15-fold in nine months while the filing carries a going-concern warning.

What to watch next

Management gives no numeric guidance. It says each segment "has positioned itself for growth" through more marketing, partnerships and acquisitions, and it kept buying: on July 1, 2026 AIS acquired the assets of Plant Engineering Services (Indiana) for $3.5M cash plus up to $1.75M of earnouts tied to gross-profit targets. On July 2 it issued another 461,425 shares to retire $1.28M of notes.

Our read: the fiscal fourth quarter (July–September) will show whether Vicon's shipping delays were really a supply-timing issue — if so, Security revenue should recover as the extra inventory arrives — and whether Richland's margins start to improve. The bigger questions are financial: whether the company can cover $10.45M of near-term debt without more stock issuance, and whether it stays above Nasdaq's $5M market-value line. The full fiscal-year results in the 10-K, expected around late December, will show if the going-concern language is still there.