AtlasClear (NYSEAMERICAN:ATCH) reported higher third-quarter fiscal 2026 revenue and a sharply improved balance sheet as management said the company is moving from restructuring toward execution of an integrated financial services platform.
On the company’s earnings call, Executive Chairman John Schaible said AtlasClear is benefiting from industry consolidation pressures affecting smaller and mid-sized broker-dealers, including rising regulatory, technology, clearing and capital requirements. He said the company is building a platform that would combine capital markets origination, clearing and banking under one structure.
The company’s current operating business is Wilson-Davis, its regulated correspondent clearing broker-dealer. AtlasClear is also pursuing the proposed acquisition of Commercial Bancorp of Wyoming and has entered into a letter of intent to acquire Ark Financial Services and its broker-dealer subsidiary, Dawson James Securities.
Revenue rises on securities lending growth
Chief Financial Officer and General Counsel Sandip Patel said total revenue for the third quarter was $4.2 million, up 65% from $2.5 million in the prior-year quarter. For the first nine months of fiscal 2026, revenue was $13.5 million, up 67% from $8.1 million in the prior-year period.
President Craig Ridenhour said Wilson-Davis generated revenue across commissions, clearing fees, vetting fees, trading gains and stock locate and securities lending. Commissions were $1.4 million in the quarter, compared with $1.5 million in the prior-year period, and were up 53% year to date to $6.8 million. Clearing fees were $662,000 in the quarter, roughly in line with $659,000 a year earlier.
The biggest change came from securities lending. Ridenhour said stock locate and securities lending revenue was $1.4 million in the quarter and $3 million year to date, compared with effectively zero in the comparable prior-year period.
“Securities lending was an immaterial line item a year ago. Today, it is the largest contributor to our year-over-year revenue growth,” Ridenhour said. He attributed the growth to investments in infrastructure, client relationships and operating workflow, as well as demand tied to hard-to-borrow inventory and short-side activity.
Expenses increase, but net loss narrows
AtlasClear reported total expenses of $7.1 million for the quarter, compared with $3.6 million in the prior-year quarter. Patel said the increase reflected several categories, including higher variable expenses tied to revenue growth, capacity investments, non-cash stock-based compensation and transaction-related costs.
Compensation, payroll tax and benefits increased by $780,000 year over year, which Patel said reflected higher variable compensation and hiring across operations, compliance and technology. Data processing and clearing costs increased by $564,000 due to higher activity.
The quarter also included $1.2 million of non-cash stock-based compensation tied to executive employment agreements entered into following the merger. Patel said there was no comparable expense in the prior-year quarter. Regulatory professional fees and related expenses increased by $695,000, primarily tied to professional fees and consulting work associated with Commercial Bancorp negotiations.
Patel said about $1.9 million of the year-over-year expense increase was either non-cash compensation or transaction-specific. The company reported an operating loss of $2.9 million and a net loss of $1.9 million for the quarter, compared with a net loss of $2.9 million in the prior-year third quarter.
For the year-to-date period, AtlasClear generated net income of $4.4 million, or $0.05 per diluted share, compared with a $0.02 loss per share in the prior-year nine-month period. Patel also noted that year-to-date interest expense declined 33% to $4.6 million from $6.9 million, reflecting debt reduction earlier in the fiscal year.
Balance sheet restructuring advances
Management emphasized the reduction of liabilities tied to AtlasClear’s de-SPAC transaction. Schaible said the company has reduced legacy de-SPAC liabilities by more than 95% since fiscal year-end 2024.
Patel said the legacy liability basket totaled approximately $34 million at June 30, 2024, including a $12.3 million earn-out liability, a $16.5 million long-term note conversion derivative, a $2.4 million Winston & Strawn agreement and a $3.3 million contingent guarantee that became a merger financing note. As of March 31, 2026, the same basket stood at $689,000.
Total assets were $73.9 million at March 31, compared with $60.9 million at fiscal year-end. Total liabilities declined to $51.7 million. Corporate cash and cash equivalents were $16.7 million, up from $7.5 million at fiscal year-end. Including segregated customer cash and PAB reserve cash, total cash on the balance sheet was $41.2 million.
Patel said the company’s October $20 million structured financing, combined with its cash position and reduced legacy obligations, positions AtlasClear to execute its current roadmap without near-term equity dilution. He said the company is not planning around a need for additional equity, though it would evaluate strategic opportunities if circumstances changed.
Correspondent pipeline and acquisitions remain priorities
Management said AtlasClear has signed or is actively onboarding five correspondent relationships, with additional relationships in development or late-stage documentation. Ridenhour said one relationship is fully onboarded and others are in process, with revenue expected to build progressively over coming quarters.
“The economics on correspondent clearing [are] very attractive once the relationship’s live and the clearing volume really kicks in,” Ridenhour said during the question-and-answer portion of the call. He said Wilson-Davis’ platform allows AtlasClear to add incremental correspondents without proportionate cost increases.
On the acquisition front, Schaible said the company has submitted its formal application to the Federal Reserve and the Wyoming Division of Banking for the proposed Commercial Bancorp acquisition. The transaction remains subject to regulatory approval and customary closing conditions.
Ridenhour said the contemplated Dawson James transaction would close in two steps to accommodate FINRA requirements, with an initial 24.9% interest acquired upon execution of a definitive agreement and the remainder following regulatory approval.
Schaible said Wilson-Davis would provide the clearing foundation, Dawson James would add investment banking and capital markets distribution if approved and closed, and Commercial Bancorp would add a banking layer if approved.
“Our focus from here is on converting pipeline into performance, advancing our strategic acquisitions, and scaling our highest potential businesses,” Schaible said.
About AtlasClear (NYSEAMERICAN:ATCH)
AtlasClear, Inc (NYSE American: ATCH) is a financial technology and market-services company focused on the execution and clearing of equity-linked derivatives in the United States. Through its registered broker-dealer and clearing subsidiary, Atlas Clearing, LLC, the firm operates a dedicated trading venue for covered warrants and warrant-like instruments. The platform is designed to deliver efficient trade execution, enhanced liquidity and robust price discovery for institutional investors.
The company’s core offerings include proprietary market-making strategies, electronic order matching and centralized post-trade clearing services.
