Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Achieved fourth consecutive quarter of double-digit growth, driven by strong execution in North America and continued scaling of the Cybersecurity as a Service (SECaaS) business.
North America revenue share increased to 31% from 17% year-over-year, fueled by high-capacity Tera III platform sales and steady demand for smart network intelligence products. SECaaS revenue grew 47% year-over-year, now accounting for over one-third of total revenue and significantly improving long-term predictability through recurring subscription fees. Successfully executed a 'land and expand' strategy in EMEA, securing four new SECaaS deals including the first sale of a new identity monitoring service to an existing customer.
The Tera III platform is driving a multi-year refresh cycle as Tier 1 operators consolidate network visibility, traffic management, and cybersecurity onto a single high-capacity gateway. Operational efficiency improved as operating expenses as a percentage of revenue declined to 62% from 68%, despite increased investments in sales and marketing. Raised 2026 revenue guidance to $115 million–$118 million based on accelerating order momentum in North America and a robust existing backlog.
Expect SECaaS revenue growth of 40% or more for the full year 2026, supported by four distinct growth vectors: user onboarding, segment expansion, new applications, and new logos. Anticipate continued profitability and cash flow improvements through the remainder of 2026, maintaining a target gross margin of approximately 70%. Visibility into 2027 is bolstered by long-term deferred revenue and multi-year Tera III upgrade projects that are currently advancing through the sales pipeline.
Capital allocation strategy now includes a $40 million share repurchase program, reflecting confidence in the company's $107 million cash position and debt-free balance sheet. Recorded a one-time $1.2 million GAAP financial gain related to an office lease modification, which management explicitly stated is not expected to recur. Gross margin of 71.8% reflected a slight year-over-year decline due to product mix, specifically the higher concentration of hardware-heavy smart product sales in the quarter.
Operating cash flow of $8.5 million was driven by robust profitability and strong collections, though it normalized following a one-time cash advancement in the prior quarter. Identified a significant opportunity in 'zero rating' fraud mitigation, with a case study showing an 87% reduction in fraudulent traffic for a Tier 1 operator. Nvidia-level potential. 30M+ investors trust Moby to find it first.
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