Transcript: Knightscope Q2 2026 Earnings Conference Call

Knightscope (NASDAQ: KSCP ) released second-quarter financial results and hosted an earnings call on Wednesday. Read the complete transcript below. APIs provide real-time access to earnings call transcripts and financial data. Visit to learn more.

Access the full call at Summary Knightscope Inc. achieved record revenue of $9 million in Q2 2026, a 228% increase from the same quarter last year, driven by their Security Force acquisition and core ASR subscriptions. 1 million due to increased R&D investments and other expenses. Strategic initiatives include the integration of Security Force, development of the K7 autonomous robot, and the Signals platform, with a focus on expanding their service offerings and enhancing client solutions.

Management emphasized the importance of blending technology with human agents to improve client outcomes, targeting a 50-60% gross margin through this integrated approach. Future outlook includes initial K7 deployments and the launch of the autonomous security force at GSX 2026, with continued focus on leveraging existing client relationships and exploring M&A opportunities. Full Transcript Apoorv Dwivedi, Executive Vice President and Chief Financial Officer Good afternoon everyone, and thank you for joining Knightscope's second quarter 2026 earnings call.

I'm Apoorv Dwivedi, Executive Vice President and Chief Financial Officer, and I'm joined by William Santana Li, Founder, Chairman and Chief Executive Officer. m. Pacific Time, just after markets close. Before we begin, please note that today's discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding our goals, growth prospects, product roadmap, and outlook.

Actual results may differ materially due to the risks and uncertainties described under Risk Factors in our most recent Annual Report on Form 10-K, as updated by our other SEC filings. Forward-looking statements speak only as of today, and we undertake no obligation to update them except as required by law. With that, it is my pleasure to turn this call over to Bill. William Santana Li, Chairman and Chief Executive Officer Thank you, Apoorv, and good afternoon everyone.

Thank you for spending part of your day with us. I'm going to start with the business and marketing highlights from the second quarter—what we won, what we built, and how we're setting up the second half of the year. Then I'll hand the call back over to Apoorv, who will take you through the financials in detail. So let's dive right in.

The second quarter of 2026 was the best quarter in Knightscope's history. 7 million in the same quarter last year, and a new quarterly record for the company. We now serve 434 clients across 42 states. That marks two consecutive record quarters following first quarter revenue that was up 106% year over year.

Back in May, I stood in front of institutional investors in New York and made a simple commitment: each quarter better than the last. We have delivered exactly what we said we would do in the second quarter. We built on the momentum from the first quarter of 2026, and we believe that we have laid the groundwork to keep it going forward. This compounding effect is the result of relentless commitment to execution across the entire organization.

Apoorv will walk you through the drivers behind those numbers in just a few minutes. The integration of our recent acquisition—now known as our Security Force—is proceeding as planned, and the collaboration between the teams is amazing to witness. Seeing firsthand the team collaborate on our new H1 wearable that will define the future Augmented Security Agent, or ASA, is truly, truly invigorating. The teams are operating and beginning to work as one as we look to expand our offerings with our current client base.

This was our second acquisition as a public company, and the discipline the team has shown—closing it, filing it, and now integrating it without missing a beat—tells you a lot about the caliber of the team. More importantly, it strengthens exactly how we intend to differentiate Knightscope: the unique combination of hardware, software, and humans delivered as one managed service. This team has been working on efficiencies and delivering tangible results, including cutting the assembly time for one of our product lines by almost 80%. We've grown the depth of our technical team significantly as we're seeing interest in Knightscope grow significantly.

We restructured our field service network in Northern California and the Northeast region by building relationships with local service providers and by insourcing field services in Southern California to provide better services while lowering our service delivery costs. We also strengthened the leadership in the company, recruiting multiple senior executives with a track record of scaling companies' growth with discipline. That is the operating model. The K7, our all-new autonomous security robot, passed its alpha prototype gate review, and we remain on track for initial deployments in the fourth quarter of 2026 as we move into the beta prototype phase.

In April, we announced our partnership with Carnegie Mellon University, the top robotics institution in the country, whose graduate robotics program is now working directly on autonomous patrol technology under the guidance of our engineering team. We're taking a disciplined approach to the K7's market introduction, focused on success in the field. Client interest in the K7 deployment continues to grow.

Simultaneously, significant work is well underway on an all-new signals platform designed to orchestrate our autonomous robots, stationary devices, sensors, augmented security agents, and our Mission Intelligence for remote monitoring—an industry first that combines pioneering proprietary 3D digital twin technology with AI agents to eliminate blind spots and provide an auditable trail for proof of work. Hardware, software, and humans working as one. One team, one force. Now let me spend a few minutes on the brand.

Because security is not sold; it is adopted through trust. And building trust at a national scale requires showing up everywhere: with clients, with the media, with communities, with recruits, and with Wall Street. This quarter we sharpened our positioning: Knightscope is a managed service provider—the only company uniquely combining hardware, software, humans into one integrated offering. We are building the nation's first autonomous security force.

That message resonated strongly with institutional investors during our non-deal roadshows in New York, and its momentum is building. The team has been hard at work preparing for GSX 2026, the security industry's largest gathering, September 14th through the 16th in Atlanta, Georgia, where we'll officially launch the autonomous security force on the biggest stage in our industry. If you're attending, come and see us. One more signal of momentum: in June we hosted a Career Night at our headquarters here in Silicon Valley, and there was literally a line around the building to get in.

The best people in the country want to work on this mission, and we're hiring the best of the best. With that, I'll turn it over to Apoorv to take you through the numbers. Apoorv Dwivedi, Executive Vice President and Chief Financial Officer Thanks, Bill. 7 million in the second quarter of 2025, and a new quarterly record.

Growth was driven by the full quarter contribution from the Security Force acquisition in addition to our core ASR subscriptions and ACD deployments. 9 million in the prior-year period. This marks our second consecutive quarter of positive gross margin driven by a full-quarter impact of the immediately accretive Security Force acquisition and margin expansion across both technology product lines, demonstrating that our integrated technology-plus-services model is structurally more profitable than either business alone.

4 million in the second quarter of 2025, primarily driven by investments in R&D to support the development of our next-generation technology as well as increased headcount across all departments and the integration of the Security Force. 9 million increase in R&D expenses from last year, the acquisition improved our operating leverage by adding higher-margin revenue and leveraging our existing operating infrastructure. We expect these benefits to continue and strengthen as we achieve our new product development milestones. 90 per share, in the prior-year period.

This was primarily due to the higher OPEX highlighted earlier, as well as approximately $1 million in other expenses related to the fair value and the change in the fair value of the contingent consideration, or earn-out, due to the seller of the recent acquisition. 2 million. This is flat to prior year and with an improving cash conversion cycle due to the effects of the acquisition. In summary: record revenue; immediately accretive margins from the acquisition; expanding margins from maturing machines and network and service efficiencies; and continued discipline in expense management.

The financial profile of the company is strengthening in step with the operational execution Bill described earlier. And now we'll open it up to Q&A. So Bill, what I'll do is I'll— —read the questions to you. William Santana Li, Chairman and Chief Executive Officer You'll give me all the easy questions.

Apoorv Dwivedi, Executive Vice President and Chief Financial Officer I'll give you all the easy questions. William Santana Li, Chairman and Chief Executive Officer All the hard questions go to you. The really bad ones. Apoorv Dwivedi, Executive Vice President and Chief Financial Officer Well, we'll send an email.

So the first question: from the autonomous security force strategy—bundles, machines, software, and licensed human agents. What are the unit economics? Is a blended ASF contract more profitable for a client than a standalone robot lease? William Santana Li, Chairman and Chief Executive Officer Oof.

Okay. I think we start off where humans can't do everything, and technology can't do everything. But that combination is extremely, extremely powerful. And so what we need to think about is how do we solve the problem for the client—not trying to optimize margins for individual discrete items.

If you go pull just the contracts and the margins for traditional guarding, unarmed, they're not very attractive, right? They're positive, but they're not, you know, software margins. If you're able to scale software, you know, you're 60, 70, 80% gross margins, probably on the low end. You're 10, 20% on the human guarding side if you're able at scale.

And we've done this—remember we did the analysis of our longest-standing clients—you know, you're somewhere in the 50, 60, 65% gross margin over that five-year period. So the Jedi mind trick is to be able to land with what a chief security officer would accept today, which are licensed, armed and unarmed agents, and then over time become that trusted advisor. Hey, we've operated at your facility for quite some time now. I wouldn't really stretch the staff that way.

You might want to consider—based on the data that we have—you might want to shuffle some things around and add some technology, maybe pay the team more appropriately. And over time I want to see—and it's going to take some time to scale—but I want to see us, you know, in the 50, 55, 60% gross margin net when all's said and done. And again, we need to focus on solving the client's problem and stop—as I keep driving our team crazy—stop selling widgets. " We really need to focus on positive outcomes for our clients.

Hopefully significantly improved quality and, over time, reduce those costs. So the last bit, I would say it's deter—you want to deter negative activity before it occurs. And that could be a human presence; it could be technology. You want to be able to detect—mostly that's technology where you're able to do, say, superhuman capabilities that a human wouldn't be able to process.

Then you need to actually respond. You saying, hi, let me [get] all these alerts and stuff and you don't respond, or 90% of the alerts are false—kind of problematic. But the key here is the data wheel—being able to learn over time. So: deter, detect, respond, learn.

Improve the algorithms, improve the technology, improve our standard operating procedures. And over time you become that much more effective for the client. And if you do that really well, that client will tell the next client. Apoorv Dwivedi, Executive Vice President and Chief Financial Officer Yeah.

And I think part of that also is going back to the outcome. So unit economics work when we're selling to a traditional audience—and we kind of are—but the expectations are traditional: oh, I'm going to go buy a camera, I'm going to go buy a guarding service, I'm going to go buy access control, I'm going to go buy something else. And each one has its own unique— William Santana Li, Chairman and Chief Executive Officer Either the cameras don't talk to the guard, the guard doesn't talk to the remote monitoring team, the remote monitoring team doesn't talk to the investigation team. Why is the chief security officer having to manage 8, 10, 12 different vendors?

They're all very competent in invoicing you. But can you actually account for everything that happened with an auditable proof of work and a track record of everything that happened at that location? Apoorv Dwivedi, Executive Vice President and Chief Financial Officer Yeah, and I think that's what we'll prove out is that the solutions-based field approach takes away the unit economics and focuses on outcomes. Next question is, what is the appetite for additional M&A and what criteria would you be looking for in a potential transaction?

Is the incremental revenue the priority or something else? William Santana Li, Chairman and Chief Executive Officer Okay, so this recent acquisition was the 25th in my professional career doing deals. As I often say, the deal part is actually, relatively speaking, easy. It's the day one and integration after is going to make or break a deal.

So you got to be very careful what you pick. I think it probably sits in three buckets. The first bucket. There's probably somebody's going to do the research here, but plus or minus maybe 8,000 guarding firms in the US, plus or minus maybe 6,000 have more than 100 employees, I believe most of them owned by boomers that are retiring.

The kids don't want to take over the business and the large big box staffing companies aren't likely to buy them. So you literally have an illiquid market, which is an interesting dynamic for doing a roll up. I think if we're a private equity shop, you'd look at the recent acquisition as you bought a platform company. You've got a growing company, a strong management team, actual results, and something that you want to build on.

So I think there's opportunities for us to organically grow the Security Force. Maybe there's some bolt-on acquisitions as we get further along. So that's the first bucket. Second bucket.

We've been actively looking at remote monitoring companies. This could be immediately accretive because that remote monitoring company likely does not have Security Force components and likely does not have a technology or robotics component, but does have a client base cash flowing and we could be highly synergistic. Again, we need to be kind of a little picky here, make sure we're careful, but we've been shopping for that, I think. Lastly, we live here in Silicon Valley.

22,000 startups, as they often say, some of the most brilliant minds in the world, backed by millions and sometimes billions of dollars. Literally 95% fail. And so there's all kinds of goodies and assets sitting around at any point in time. It could be a piece of technology, it could be a particular algorithm, it could be a sensor, it could be a team.

So we're always on the lookout there. So those would be the three buckets: continued inorganic growth on the Security Force side, remote monitoring opportunities that likely would be highly synergistic, and then the last one would be on the technology side. I would probably even go a little bit to kind of summarize that. If you think about our strategy, which is hardware plus software plus humans, right?

We're really good at the hardware. We have the humans pieces, we're working on that. And that's where the opportunity is and the software is where the opportunity is. Because again, there's so many people working on some really brilliant technologies and analytics and software that if we can find the right one to plug in, why don't we just do that?

com, it literally says on the homepage for you, the chief security officers of the United States of America.