Moving iMage Technologies(US:MITQ) ZACKS·2026-02-18 18:32Core Insights - Moving iMage Technologies, Inc. (MITQ) shares have declined 6.4% since the earnings report for the quarter ended December 31, 2025, underperforming the S&P 500 index's 1.5% decline during the same period [1] - The stock has fallen 16.2% over the past month compared to a 1.9% drop in the broader market, indicating a cautious investor sentiment despite improvements in quarterly performance [1] Financial Performance - For Q2 fiscal 2026, MITQ reported a net loss of $0.04 per share, an improvement from a loss of $0.05 per share in the same quarter last year [2] - Revenues increased by 10% year over year to $3.8 million from $3.4 million, while gross profit rose 24% to $1.2 million, with gross margin expanding to 30.7% from 27.2% [2] - Operating loss narrowed to $0.4 million from $0.6 million in the prior-year quarter, and net loss also narrowed to $0.4 million from $0.5 million [3] Key Business Metrics - MITQ ended the quarter with approximately $4.5 million in working capital, including net cash of $3.9 million and no debt [4] - Cash decreased from $5.7 million at June 30, 2025, to $3.9 million at December 31, 2025, primarily due to a $1.5 million cash outlay for the DCS loudspeaker line acquisition and increased inventory levels [4] - Inventory rose to $3.1 million at quarter-end from $2.1 million at June 30, 2025 [4] Operating Expenses - Operating expenses increased by 5.1% year over year to $1.6 million, mainly due to higher legal expenses [5] - Despite the rise in expenses, improved gross profit helped narrow operating losses, although operating cash flow showed a net use of $1.8 million for the six months ended December 31, 2025, compared to positive cash flow of $0.04 million in the prior-year period [5] Management Commentary - The Chairman and CEO described the second quarter as productive, highlighting a 10% revenue growth during a typically slower period for exhibitors [6] - There is cautious optimism about a rebound in domestic box office receipts in calendar 2026, driven by continued demand for immersive and premium large-format cinema experiences [6] Strategic Developments - The acquisition of the DCS loudspeaker line for $1.5 million is expected to enhance MITQ's proprietary product offerings and expand its international footprint [7][12] - The company has signed distribution agreements with over 25 cinema equipment dealers across various regions, promoting DCS in more than 50 countries [7] Factors Influencing Performance - Revenue growth was supported by steady order flow for parts, replacement products, and higher-margin proprietary offerings during a typically slower exhibition period [8] - Gross margin expansion was attributed to a higher percentage of product revenues and operational execution, while operating expenses were pressured by elevated legal costs [8] Guidance - Management anticipates third-quarter fiscal 2026 revenues of approximately $3 million, reflecting customary seasonality and initial ramp-up in DCS-related sales [11] - Gross margin percentage is expected to return to prior-year lower levels according to management commentary [11]