Cycurion Reports First Quarter 2026 Results

MCLEAN, Va., May 14, 2026 (GLOBE NEWSWIRE) -- Cycurion, Inc. ( CYCU ) ("Cycurion" or the "Company"), a leader in AI-driven cybersecurity and national security solutions with trusted relationships across the U.S. Government, numerous leading corporations, and high-profile individuals across all industries, announced today results for the first quarter ended March 31, 2026. "The first quarter of 2026 marks a clear inflection point in our transformation," said Kevin Kelly, Chairman and Chief Executive Officer of Cycurion ( CYCU ). "We nearly doubled gross margins, significantly reduced operating expenses and executed binding agreements to acquire Halo Privacy and HavenX, which adds approximately $7 million in annualized contracted revenues at approximately 55% gross margin once the deal closes. Combined with our existing contracted backlog, which we expect to deliver approximately $15 million to $17 million in annual revenue, the addition of Halo Privacy and HavenX will increase our contracted backlog we estimate to convert to revenue in a one year period to approximately $21 million to $22 million. We are executing with discipline - exiting lower margin legacy work, reducing costs and reinvesting in our AI-driven platforms. I am confident in our path to profitability and long-term shareholder value." Highlights of First Quarter 2026 as Compared to Fourth Quarter 2025 Revenue of $3.3 million, which reflects the planned wind-down of certain legacy contracts ahead of the ramp of higher-margin replacement work.Gross margin expanded 900 basis points to 21.1% from 12.1%, nearly doubling as a result of a deliberate shift to higher-margin contracts and disciplined cost management.Selling, general and administrative expenses decreased $1.3 million, or 31.6%, to $2.7 million.Net loss improved 51.5% to $2.6 million from $5.3 million.EBITDA loss improved 60.2% to $1.9 million from $4.9 million. Strategic and Operational Momentum Halo Privacy and HavenX Acquisition (Binding Agreement May 2026): Adds approximately $7 million in estimated annualized contracted revenue with a gross margin of approximately 55%. Brings industry-leading secure communications technology (including the Halo Link app) and elite digital investigations/attribution capabilities (HavenX), expanding Cycurion's ( CYCU ) presence in high-growth markets.Robust Contract Backlog: Consistent with prior disclosures, the Company's $112 million contracted backlog is expected to realize approximately $15 million – $17 million over the next twelve months, which the addition of Halo Privacy and HavenX upon closing, this expectation increases to approximately $21 million – $22 million over a one year period.Cost Reduction Initiatives: Organizational realignment on track to generate over $2.2 million in annualized savings, with meaningful benefits already reflected in first quarter of 2026 selling, general and administrative expenses.Acquisition Pipeline: Continued advancement of the revised Memorandum of Understanding to acquire Kustom Entertainment's Legacy Video Solutions segment (expected to add approximately $5.1 million in annual revenue and approximately $8 million in contracted backlog). About Cycurion ( CYCU ) Based in McLean, Virginia, Cycurion ( CYCU ) is a forward-thinking provider of IT cybersecurity solutions and AI, committed to delivering secure, reliable, and innovative services to clients worldwide. Specializing in cybersecurity, program management, and business continuity, Cycurion ( CYCU ) harnesses its AI-enhanced ARx platform and expert team to empower clients and safeguard their operations. Along with its subsidiaries, Axxum Technologies LLC, Cloudburst Security LLC, and Cycurion Innovation, Inc., Cycurion ( CYCU ) serves government, healthcare, and corporate clients committed to securing the digital future. For more information, visit www.cycurion.com. About Halo Privacy Halo Privacy, with more than 10 years of expertise, develops cutting-edge, privacy-first secure communication tools engineered for the highest security standards, including the revolutionary Halo Link app. About HavenX HavenX is a leading digital investigations and attribution firm focused on cyber-harassment, defamation tracking, OSINT, IP geolocation, breach intelligence, and high-confidence threat actor identification. Forward-Looking Statements This press release contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, including, but not limited to, statements relating to the operations and prospective growth of Cycurion's ( CYCU ) business. Certain statements in this press release that are not historical facts are forward-looking statements within the meaning of Section 27A of the Securities Exchange Act of 1934, as amended. Any statements contained in this press release that are not statements of historical fact may be deemed forward-looking statements. Such statements include, but are not limited to, statements regarding the proposed transaction contemplated by the binding agreement, including the likelihood, timing, structure or consummation of the transaction; the anticipated benefits of the transaction; the acceleration of the Company's inorganic growth strategy; the continued execution on the Company's backlog; and other statements that are not historical facts, including statements which may be accompanied by words such as "continue," "will," "may," "could," "should," "expect," "expected," "plans," "intend," "anticipate," "believe," "estimate," "predict," "potential," and similar expressions are intended to identify such forward-looking statements. All forward-looking statements involve significant risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, many of which are generally outside the control of Cycurion ( CYCU ) and are difficult to predict. Examples of such risks and uncertainties include, but are not limited to, risks related to customer performance and satisfaction, contract modifications, delays or terminations, and the Company’s ability to fulfill contractual obligations, the outcomes of the Company's investigations, any potential legal proceedings, or the future performance of the Company's stock. Additional factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements can be found in the most recent annual report on Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K filed by Cycurion ( CYCU ) with the U.S. Securities and Exchange Commission. Cycurion ( CYCU ) anticipates that subsequent events and developments may cause its plans, intentions, and expectations to change. Cycurion ( CYCU ) assumes no obligation, and it specifically disclaims any intention or obligation, to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as expressly required by law. Forward-looking statements speak only as of the date they are made and should not be relied upon as representing Cycurion's ( CYCU ) plans and expectations as of any subsequent date. Cycurion Investor Relations:(888) 341-6680investors@cycurion.com Cycurion Media Relations:(888) 341-6680media@cycurion.com Quarterly Results of Operations and Non-GAAP Financial Measures(Unaudited) Quarterly Consolidated Results of Operations For the Three Months Ended March 31, 2026 December 31, 2025 March 31, 2025Revenue$3,268,620 $3,542,644 $3,870,050 Cost of revenue 2,580,262 3,114,505 3,192,287 Gross profit 688,358 428,139 677,763 Gross margin 21.1% 12.1% 17.5%Operating expenses: Selling, general and administrative expenses 2,743,695 4,013,876 337,374 Stock compensation expenses 315,833 804,424 — Business combination expenses — 630,000 10,437,894 Total operating expenses 3,059,528 5,448,300 10,775,268 Operating loss (2,371,170) (5,020,161) (10,097,505)Interest income 14,236 25,768 — Interest expense (204,852) (257,174) (178,890)Gain on debt settlement, net — (28,504) 141,653 Other expense — — (113,744)Other expense, net (190,616) (259,910) (150,981)Loss before income taxes (2,561,786) (5,280,071) (10,248,486)Provision for income tax — — — Net loss (2,561,786) (5,280,071) (10,248,486)Less: Net loss attributable to non-controlling interest 433,324 175,017 — Net loss attributable to Cycurion ( CYCU )$(2,128,462) $(5,105,054) $(10,248,486) Reconciliation of Net Loss to EBITDA (Non-GAAP) and Adjusted EBITDA (Non-GAAP) For the Three Months Ended March 31, 2026 December 31, 2025 March 31, 2025Net loss attributable to Cycurion ( CYCU )$(2,128,462) $(5,105,054) $(10,248,486)Interest income (14,236) (25,768) — Interest expense 204,852 257,174 178,890 Other expense — — 113,744 Depreciation and amortization 1,187 7,665 74,892 EBITDA (Non-GAAP) (1,936,659) (4,865,983) (9,880,960)Loss on debt settlement, net — 28,504 (141,653)Transaction related expenses — 630,000 10,437,894 Finance expense — — 100,000 Stock-based compensation 315,833 904,424 — Adjusted EBITDA (Non-GAAP)$(1,620,826) $(3,303,055) $515,281 CYCURION, INC. ( CYCU ) AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited) March 31, 2026 December 31, 2025Assets: Cash and cash equivalents$2,028,718 $5,255,235 Accounts receivable, net 3,336,047 2,687,479 Prepaid expenses and other current assets 106,934 60,133 Total current assets 5,471,699 8,002,847 Software development costs, net 4,735,981 4,606,981 Goodwill 21,238,450 20,842,508 Total non-current assets 25,974,431 25,449,489 Total assets$31,446,130 $33,452,336 Liabilities and Stockholders' Equity: Liabilities: Bank loan-revolving credit line$2,725,546 $2,933,396 Loans payable - current portion 669,693 669,693 Factoring liability 1,566,887 1,511,678 Convertible notes 192,897 192,897 Promissory notes 2,500,849 2,499,662 Loans payable - related parties 123,650 123,650 Accounts payable 1,441,596 1,314,772 Accrued liabilities 4,283,045 4,228,337 Accrued compensation and benefits 1,306,906 919,825 Accrued interest payable 1,486,041 1,347,787 Excise tax payable 1,167,173 1,167,173 Total current liabilities 17,464,283 16,908,870 Loans payable - non-current portion 300,000 300,000 Total non-current liabilities 300,000 300,000 Total liabilities 17,764,283 17,208,870 Stockholders' Equity: Preferred stock ($0.0001 par value, 20,000,000 shares authorized) Series A convertible preferred stock ($0.0001 par value, 110,000 shares designated, 0 and 0 issued and outstanding, respectively) — — Series B convertible preferred stock ($0.0001 par value, 3,000 shares designated, 0 and 1 issued and outstanding, respectively) — — Series C convertible preferred stock ($0.0001 par value, 5,000 shares designated, 2,547 and 4,851 issued and outstanding, respectively) — — Series D convertible preferred stock ($0.0001 par value, 6,666,700 shares designated, 150,000 and 150,000 issued and outstanding, respectively) 15 15 Series E convertible preferred stock ($0.0001 par value, 100 shares designated, 51 and 51 issued and outstanding, respectively) — — Series F convertible preferred stock ($0.0001 par value, 10,000 shares designated, 0 and 0 issued and outstanding, respectively) — — Series G convertible preferred stock ($0.0001 par value, 10,000 shares designated, 143 and 143 issued and outstanding, respectively) — — Common stock ($0.0001 par value, 300,000,000 shares authorized, 5,510,021 and 3,642,501 shares issued and outstanding, respectively) 551 364 Additional paid in capital 46,979,742 46,979,762 Accumulated deficit (29,007,543) (26,879,081)Total stockholders' equity attributable to Cycurion ( CYCU ) 17,972,765 20,101,060 Deficit attributable to noncontrolling interests (4,290,918) (3,857,594)Total stockholders' equity 13,681,847 16,243,466 Total liabilities and stockholders’ equity$31,446,130 $33,452,336 CYCURION, INC. ( CYCU ) AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS(Unaudited) For the Three Months Ended March 31, March 31, 2026 March 31, 2025Revenue$3,268,620 $3,870,050 Cost of revenue 2,580,262 3,192,287 Gross profit 688,358 677,763 Operating expenses: Selling, general and administrative expenses 2,743,695 337,374 Stock compensation expenses 315,833 — Business combination expenses — 10,437,894 Total operating expenses 3,059,528 10,775,268 Operating loss (2,371,170) (10,097,505)Other income/(expenses): Interest income 14,236 — Interest expense (204,852) (178,890)Gain on debt settlement, net — 141,653 Other expense, net — (113,744)Other expenses, net (190,616) (150,981)Loss before income taxes (2,561,786) (10,248,486)Provision for income tax — — Net loss (2,561,786) (10,248,486)Less: Net loss attributable to non-controlling interest 433,324 — Net loss attributable to Cycurion ( CYCU )$(2,128,462) $(10,248,486) Comprehensive loss$(2,128,462) $(10,248,486) Loss per share: Basic$(0.47) $(15.57)Diluted$(0.47) $(7.40)Weighted average shares outstanding: Basic 4,561,976 658,218 Diluted 4,561,976 1,383,507 CYCURION, INC. ( CYCU ) AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited) For the Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net loss$(2,561,786) $(10,248,486)Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 315,833 — Stock-based compensation - business combination related — 9,250,000 Amortization of debt discount 1,187 64,850 Depreciation of property and equipment — 1,709 Amortization of software development costs — 8,333 Gain on debt settlement, net — (141,653)Finance expense — 100,000 Changes in assets and liabilities: Accounts receivable, net and other receivables (648,568) (1,300,686)Prepaid expenses and other current assets (46,801) (11,415)Accounts payable and accrued liabilities (184,201) (286,114)Accrued compensation and benefits 96,248 37,673 Accrued interest payable 138,254 (219,320)Net cash used in operating activities (2,889,834) (2,745,109)Cash flows from investing activities: Cash acquired on business combination — 34,983 Capitalized software development costs (129,000) (70,000)Cash withdrawn from Trust Account in connection with redemption — 1,001,216 Release of Trust Account to Company's bank account — 833,324 Net cash (used in)/provided by investing activities (129,000) 1,799,523 Cash flows from financing activities: Proceeds from exercise of warrants 167 3,309,921 Redemption of common stock subject to redemption — (1,001,216)Repayments of revolving line of credit (207,850) (9,300)Repayment of bank borrowings — (5,114)Proceeds from convertible notes payable — 386,500 Proceeds from notes payable — 513,200 Repayments of notes payable — (20,000)Net cash (used in)/provided by financing activities (207,683) 3,173,991 Net (decrease)/increase in cash and cash equivalents (3,226,517) 2,228,405 Cash and cash equivalents, beginning of period 5,255,235 40,790 Cash and cash equivalents, end of period$2,028,718 $2,269,195 Image: https://www.globenewswire.com/newsroom/ti?nf=OTcyMDM5MyM3NjAzNjA3IzIyOTg5MDA= Image: https://ml.globenewswire.com/media/OGYyNmM2MTctZmY3Zi00NzQxLWIzMjMtMGZlYjM1OWI1MTU4LTEzMTA0NTAtMjAyNi0wNS0xNC1lbg==/tiny/Cycurion.png Source: Cycurion ( CYCU )