Data443 Reports 13% Revenue Decline and Increased Net Loss in Q1 2026

Data443 Risk Mitigation, Inc. reported a decline in financial performance for the first quarter of 2026, with revenues totaling $1.02 million, a decrease of 13% from $1.17 million in the same period of 2025. The company's cost of revenue surged to $850,851, up 128% from $373,150 year-over-year, leading to a gross profit of $166,529, which represents a significant drop of 79% compared to $793,439 in the prior year. The net loss attributable to common stockholders increased by 50%, reaching $1.01 million, compared to a loss of $676,664 in the first quarter of 2025.

The company's balance sheet as of March 31, 2026, showed total assets of $5.45 million, down from $6.39 million at the end of 2025. Current assets decreased by 52% to $689,507, primarily due to a reduction in cash reserves, which fell to $40,812 from $197,364. Current liabilities increased slightly to $18.84 million, resulting in a working capital deficiency of $18.15 million. The accumulated deficit also widened to $65.33 million from $64.31 million.

Strategically, Data443 has been active in acquisitions, including the purchase of certain assets from Cyren Ltd., which is expected to enhance its product offerings in threat intelligence and email security. The company continues to focus on expanding its customer base, which now exceeds 10,000 clients, and aims to leverage its partnerships with major cloud service providers to drive growth. The company has also been enhancing its product suite, which includes various data security and privacy management solutions.

Operationally, the company reported a significant increase in its cost of revenue, attributed to a one-time license purchase related to its TacitRed acquisition. Despite the challenges, Data443 is seeing organic growth in its services, particularly those with storage or volume components. The company is also focused on improving its sales and marketing efforts, maintaining a steady approach to customer retention and service delivery.

Looking ahead, Data443 acknowledges the need for additional capital to sustain operations and fund growth initiatives. The management has indicated that it will continue to seek financing through debt or equity, although there is no assurance that such funding will be available on favorable terms. The company remains committed to its strategic objectives, including further acquisitions and product development, to enhance its competitive position in the data security market.