Odysight.ai Inc. reported a significant decline in financial performance for the first quarter of 2026, with revenues dropping to $82,000, a 96% decrease from $2.065 million in the same period of 2025. The company's gross profit also fell sharply to $21,000, down from $538,000 year-over-year. The decline in revenue was primarily attributed to the derecognition of a contract liability associated with a Fortune 500 medical company customer, which amounted to $1.69 million, as well as delays in project deliveries due to geopolitical tensions in the region.
The company's operating loss increased to $5.338 million for the first quarter of 2026, compared to a loss of $4.560 million in the prior year, marking a 17% rise. This increase was driven by higher research and development expenses, which rose by 3% to $2.557 million, and a substantial increase in sales and marketing expenses, which surged by 143% to $962,000. General and administrative expenses decreased by 17% to $1.840 million, reflecting reduced costs associated with prior fundraising activities.
Operationally, Odysight.ai has faced challenges due to the ongoing military conflict in Israel, which has led to disruptions in customer orders and project deliveries. The company has implemented work-from-home measures and increased employee overtime to mitigate these impacts. Despite these challenges, the company reported a backlog of approximately $14 million as of March 31, 2026, slightly up from $13.8 million at the end of 2025, indicating some level of ongoing demand for its services.
In terms of strategic developments, Odysight.ai's common stock began trading on the Tel Aviv Stock Exchange on April 9, 2026, in addition to its existing listing on the Nasdaq Capital Market. The company continues to focus on expanding its market presence and enhancing its product offerings, particularly in the defense sector, where interest in its technology has reportedly increased due to heightened military activity. Looking ahead, Odysight.ai anticipates that its existing cash reserves will support operations for at least the next 12 months, although it may need to seek additional funding to sustain growth and achieve profitability.
About Odysight.ai Inc.
Odysight.ai Inc. develops AI-driven vision-based sensor solutions for real-time health and condition monitoring across aerospace, medical, industrial, transportation, and energy markets. Its products utilize miniature cameras, machine learning, and cloud analytics to enable predictive maintenance, enhance safety, reduce downtime, and lower costs. Serving government agencies, defense contractors, and industrial clients, the company leverages proprietary technology and strategic partnerships to lead in predictive and condition-based monitoring.
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