$19.1M backlog and AI-led cost cuts push Q2 to positive EBITDA — while management insists 2027, not this quarter, is the real inflection.
SPN.V · Earnings Call · 2026-08-31
The quarter the reservoir drained
Snipp Interactive's Q2 2026 arrived with the shift management had promised. Revenue reached $6.0 million, up 19% sequentially and 25% year-over-year, and the company finally printed positive EBITDA of $181,000, an improvement of $1.3 million versus the same quarter last year. The most closely watched line was not revenue, but the bookings backlog that Atul Sabharwal had flagged three months earlier. It fell from $20.6 million at March 31 to $19.1 million — but that, as he put it, is exactly what the reservoir was designed to do.
The inflection that we are targeting is 2027, and nothing I am telling you today changes that date. What Q2 gives you is evidence that the machine works...
The company's own language has shifted from growth-at-any-cost to conversion and cost discipline. bookings backlog is no longer just a pipeline metric; it is now the engine of revenue recognition. "I told you the bookings backlog was the most important number in our Q1 release, and that the $20.6 million we had built was contracted, signed, and on its way into the revenue line over the coming quarters." “This quarter, backlog came down while revenue went up. That is the same fingerprint running the other way.” — Atul Sabharwal, CEO · 2026-08-31 Deferred revenue also climbed to $7.7 million from $6.9 million, evidence that customers are prepaying for services Snipp has not yet delivered — not a sign of fatigue.
AI productivity shows up in the P&L
The cleanest indication that something structural changed is the salary line. Salaries and compensation fell 18% year-over-year in the quarter, while revenue grew nearly 25%. That is the first tangible proof of the AI transformation the company has been describing. In the prepared remarks, Sabharwal said engineering and delivery teams are now "shipping more with a smaller team" because of AI-driven productivity, and he pointed to the consolidation of the technical delivery footprint as a direct effect. He also stressed that AI savings would not be assigned a dollar figure yet, but that "the direction I described three months ago has begun to appear in the numbers." “The productivity gains we have built in engineering and delivery are what made it possible to consolidate our technical delivery footprint.” — Atul Sabharwal, CEO · 2026-08-31
On the analyst Q&A, he made the logic even more blunt: “The biggest cost item in our entire company... is just our salaries and our people. There is only one big efficiency driver here, which is can you use AI and can you build an ecosystem of agents that actually replace people?” — Atul Sabharwal, CEO · 2026-08-31 This is a notable evolution from a year earlier, when the CEO was talking about ramping into Snipp Media as an upside driver. In the prior June 2024 call, he described 2024 as "that year of shift" and conceded "we'll grow slow" to protect margins. “If our business is not generating sustained EBITDA by 2025, I'd be disappointed.” — Atul Sabharwal, Founder and Chief Executive Officer · 2024-06-03 That discipline is now visible in the actual numbers, with operating expenses down 3% and travel down 58% in Q2.
The margin story is nuanced. Gross margin percentage dipped to 55% from 59.1%, but CFO Malcolm Davidson attributed that to mix — heavy reward fulfillment recognized on a gross basis — not to pricing or cost challenges. Gross margin dollars still rose 12% sequentially and 33% year-over-year. It is another sign that the business is not chasing low-quality revenue; the underlying economics are intact.
Macro headwinds remain — but the flywheel is turning
Management was careful not to declare victory. The macro backdrop is still constrained by tariff-driven budget caution and program deferrals. Sabharwal repeated that "the macro is what the macro is," and first-half revenue was still slightly down versus the prior year. The company is aiming for sustained positive EBITDA and acceleration in 2027, not now. "Discipline this year, acceleration next year." “One quarter of positive EBITDA is not an inflection, and I would ask you not to model it as one just as yet.” — Atul Sabharwal, CEO · 2026-08-31
Still, the structural changes are hard to ignore. deferred revenue is building, the positive EBITDA line has been crossed, and the AI-led cost base is already flowing through the P&L. In a small-cap world where the market often only re-rates after several consistent quarters, Snipp's challenge is to prove the second quarter wasn't an accident of timing. But for the first time in a long while, the company's internal phrase "profitable growth" aligns with reported numbers rather than ambition.