Rank One Computing (NASDAQ:ROC) reported second-quarter 2026 revenue of $5.1 million, up 2% from the prior-year period and nearly double its first-quarter revenue, as higher government research-and-development contract revenue offset a decline in product revenue tied to the completion of a prior ROC Watch deployment.
Chief Executive Officer Scott Swann said the quarter marked the company’s first full quarter as a public company and reflected progress in government contracting activity and commercialization across its Vision AI product portfolio. He said the company had monetized its full Vision AI platform ahead of plan, with ROC Evidence recording its first commercial revenue during the quarter.
Government Contract Revenue Rises
Swann said the company saw signs that government funding and program activity were returning toward more normal levels after a slower period. During the question-and-answer session, he pointed to increasing customer interactions, requests for quotes and pricing, and solicitations as indications of improved activity.
“The revenue is a good indicator. The award of the R&D contract is a good indicator that the government is back in more of a normal operation,” Swann said.
He added that government agencies are working toward obligating fiscal 2026 funds by Sept. 30, though the timing of awards and deployments can create quarterly variability. Swann said some funds may flow through third-party integrators before reaching technology providers.
The company’s strategy for its R&D business is to convert government research work into deployments and proof-of-concepts that can lead to larger, longer-duration programs and recurring revenue.
Product Mix Shifts Following ROC Watch Project Completion
Product revenue fell 26% to $2.1 million from $2.8 million in the prior-year quarter. The decrease was primarily attributed to the completion of a significant ROC Watch deployment that had contributed revenue in the comparable 2025 period. ROC Watch revenue declined 87% year over year.
Swann described that ROC Watch engagement as a successful, finite government mission with revenue concentrated around program and deployment milestones. He said the company remains active in pilots, quotes and other opportunities for the product line, while seeking a major “beachhead” customer for ROC Watch.
Excluding the ROC Watch comparison, several products recorded growth:
- ROC SDK revenue rose 84% year over year to approximately $1.6 million.
- ROC ABIS revenue increased 723% to approximately $0.2 million, driven by multiple new customer deployments.
- ROC Enroll revenue grew 125% to approximately $0.1 million, reflecting an expanded rollout with MTN in South Africa.
- ROC Evidence generated its first commercial revenue following an early deployment.
Swann said the company aims to establish multimillion-dollar, multiyear “beachhead” contracts across its product lines. He said initial ABIS deployments helped validate the product, while future opportunities with larger federal agencies could support more durable, recurring revenue.
ZTC Acquisition Expected to Expand Digital Evidence Capabilities
Rank One Computing announced in June that it had agreed to acquire ZTC, a strategic partner with digital forensic capabilities, domain expertise and government customer relationships. The company expects to close the transaction by the end of the third quarter.
Swann said engineering, product and business-development integration work was already underway ahead of closing. He said ZTC’s experience in digital evidence, combined with ROC’s product-development approach, is intended to strengthen ROC Evidence and support customer demand for forensic digital evidence capabilities.
The company also highlighted results from National Institute of Standards and Technology evaluations, including what it described as the fastest latent fingerprint search speed in an evaluation of latent fingerprint technologies. Swann said such independent testing is important in government and commercial procurement processes because customers require objective validation of accuracy, speed and scalability.
Margins Expand as Company Invests in Growth
Gross profit rose to $4.6 million from $4 million a year earlier, while gross margin expanded to 90% from 80%. Barnes attributed the improvement to a higher-margin revenue mix and lower cost of sales, including a greater mix of software-license revenue.
However, Barnes said investors should not view the 90% margin as a quarterly run rate. Gross margin can fluctuate based on the mix of software licenses, services, hardware and R&D contracts, he said.
Operating expenses increased to $5.3 million from $3.2 million in the prior-year period. Selling, general and administrative expense rose to $3.3 million, while research and development expense increased to approximately $2 million, reflecting investments in personnel, engineering, product development, infrastructure and deployment capacity.
Rank One Computing reported a net loss of $0.8 million, or $0.04 per basic and diluted share, compared with net income of $0.6 million, or $0.04 per share, in the second quarter of 2025.
As of June 30, the company had $11.9 million in cash, approximately $14.8 million in working capital and no outstanding debt. Barnes said management was comfortable with its liquidity position and would remain disciplined in allocating operating capital. The company did not provide formal financial guidance.
Swann said the company’s focus for the second half is converting its investments and customer activity into larger programs, expanded deployments and more durable revenue.
About Rank One Computing (NASDAQ:ROC)
ROC is an independent American artificial intelligence company redefining the global standard for Vision AI in identity, security, and digital forensics. Our Vision AI platform delivers real-time facial recognition, multimodal biometric verification, video analytics, and AI-powered evidence analysis to mission-critical organizations across both private and public sectors. ROC’s biometric algorithms are routinely ranked by the National Institute of Standards and Technology (“NIST”) as among the most accurate and computationally efficient globally.
