Shares of Altigen Communications, Inc. ATGN have gained 11.6% since the company reported its earnings for the quarter ended June 30, 2026 compared with the S&P 500 Index’s -0.3% decline over the same time frame. Over the past month, the stock has advanced 15.5%, outperforming the S&P 500’s 3.6% change.
Altigen reported fiscal third-quarter 2026 non-GAAP earnings per share of 1 cent, which remained flat year over year.
Net revenues of $3 million denoted a 14% decline from $3.5 million in the year-ago quarter. GAAP net income decreased to $0.02 million from $0.1 million.
Non-GAAP net income fell to $0.2 million from $0.4 million.
Gross profit dropped to $1.7 million from $2.2 million, while operating income declined to $0.02 million from $0.1 million.
ATGN’s Other Key Business Metrics
Cloud services revenues were $1.4 million compared with $1.7 million a year earlier, representing a decline of about 18%. Services and other revenues decreased to $1.5 million from $1.6 million, while legacy products revenues fell to $0.2 million from $0.3 million. Adjusted EBITDA was $0.4 million versus $0.7 million in the prior-year quarter.
Gross margin was 58%, down from 63% a year earlier. GAAP operating expenses decreased 17% to $1.7 million from $2.1 million, helping the company remain profitable despite lower revenues. Altigen ended the June quarter with $3.4 million in cash and cash equivalents compared with $2.8 million at the beginning of the fiscal year.
Compared with Sept. 30, 2025, Altigen’s total assets decreased to $16.1 million from $16.3 million. Total liabilities declined to $2 million from $2.5 million. Meanwhile, stockholders’ equity increased to $14.1 million from $13.7 million.
Net cash provided by operating activities totaled $1.3 million for the first nine months of fiscal 2026.
ATGN: Management Commentary
CEO Jeremiah Fleming described the quarter as an inflection point, noting that newly contracted cloud recurring revenues exceeded cloud revenues lost through legacy customer churn for the first time in several years. Management believes most legacy churn is now behind the company and said average revenue per customer is increasing as Altigen shifts toward larger strategic opportunities.
Management also highlighted traction in its AI-powered customer engagement portfolio, including CoreInteract, CoreEngage and CoreInsights. During the quarter, Altigen signed the largest cloud customer in its history. The company also said Fiserv approved its AI IVR enhancements for general availability and authorized QA testing for CoreInsights, potentially expanding revenue opportunities across existing Fiserv customer relationships.
Factors Influencing ATGN’s Headline Numbers
The year-over-year revenue decline continued to reflect lower cloud services revenues as legacy customer churn weighed on the business. Gross margin compression was attributed to lower revenues and increased professional-services costs associated with new project work that required additional upfront resources. However, lower operating expenses partly offset those pressures, with GAAP operating expenses declining.
Outlook
Management expressed confidence that the improving balance between new contracted cloud revenues and churn should support renewed top-line growth in coming quarters. For the fourth quarter, Altigen plans to focus on growing recurring revenues, expanding adoption of CoreEngage and CoreInteract, leveraging its Fiserv relationship and continuing investment in AI-powered solutions. The company also expects its new geo-redundant SBC environment to reduce operating costs by approximately $0.01 million per month once fully implemented.
Other Developments at ATGN
Altigen completed and launched CoreManage, its next-generation customer management portal, during the quarter, with customer migrations underway. It also continued its SOC 2 certification process and development of CoreInteract AI Studio, which is designed to integrate solutions from multiple AI providers through a common architecture.
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AltiGen Communications Inc. (ATGN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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