Artificial Intelligence Technology Solutions Inc.

What they do

AITX designs, manufactures, deploys, and supports stationary and mobile autonomous security devices powered by its SARA agentic AI platform. Substantially all revenue comes from recurring monthly subscription contracts, typically with twelve-month minimum terms, under a Solutions-as-a-Service model in which AITX retains ownership of deployed hardware. It also sells units outright to a limited number of legacy enterprise customers and operates through five wholly owned subsidiaries, including RAD-I, RAD-G, RAD-M, RAD-R, and RAD Lanka.

Revenue drivers

• Device rental activities — Recurring subscription revenue; $6,920,336 in fiscal 2026, up 37% year over year and about 89% of total revenue.
• Direct sales of goods and services — Outright unit and service sales to legacy enterprise customers; $825,000 in fiscal 2026, down 24% as customers shifted to rentals.
• Mobile products and software — Company cites new mobile products and software as expected sources of sales growth starting in the second quarter.

Recent performance

Fiscal 2026 revenue was $7,745,336, up 26% from $6,130,886 in fiscal 2025, with gross profit of $5,533,700 and gross margin of 71% versus 61% a year earlier. The net loss narrowed 23% to $14,510,251, and operating cash flow improved to negative $9.3 million. In the quarter ended May 31, 2026, revenue was $1,831,202, down 1% year over year, and the net loss widened 24% to $5,715,838. The revenue dip reflected a major customer cutting spend; that customer fell from about 48% of revenue in the prior-year quarter to 21% in the latest quarter. Two customers accounted for 36% of revenue in the latest quarter versus 65% a year earlier.

Strategy

AITX is prioritizing recurring subscription revenue over outright sales, with rental activities growing 37% in fiscal 2026 while direct sales declined 24%. The company is investing in research and development, which rose 19% to $4,128,155 in fiscal 2026, for product development and new software solutions. It expects to establish RAD Europe in fiscal 2027 to support European Union activity and provide GDPR-compliant services. Management also cites planned new stationary solutions in fiscal 2027, a mobile product ramp following May 2026 commercial billing, and expansion of its authorized dealer network.

Risks

• Customer concentration — One major customer fell from about 48% to 21% of revenue, and two customers were 36% of latest-quarter revenue, so losses of large accounts can materially cut sales.
• Persistent losses and cash burn — The company reported a fiscal 2026 net loss of $14,510,251 and negative operating cash flow of $9.3 million, and the latest quarter's net loss widened to $5,715,838.
• Negative shareholder equity and low cash — As of May 31, 2026, liabilities were $64.7 million against $9.1 million of assets, producing shareholder equity of negative $56.1 million.
• Forward-looking margin and product assumptions — Expected subscription gross margin above 75% and outright-sale margin above 50% depend on pricing acceptance, stable input costs, and manufacturing scale that the company says may not be realized.

Outlook

Management expects sales growth through new mobile products and software starting in the second quarter and plans additional stationary solutions and the RAD Europe subsidiary in fiscal 2027. It states that RAD-I recurring revenue and gross margin could support positive cash flow operations on a standalone basis. It also expects RAD-G to generate substantial revenue from SARA platform licensing and RAD-M to surpass RAD-I's monthly recurring revenue contribution at some future point. It expects European market entry to support growth and serve as a GDPR-compliant cost center.