Cycurion, Inc. reported its third‑quarter 2025 financial results on November 14, 2025. Revenue for the quarter fell 13.9% to $3.83 million from $4.45 million in the same period a year earlier, while the company posted a net loss of $3.24 million versus a net income of $0.30 million in Q2 2024. The contract backlog grew to more than $80 million, and cash and cash equivalents stood at $3.70 million.
The revenue decline reflects Cycurion’s deliberate shift toward higher‑margin State, Local, and Education (SLED) government contracts. The company cited merger‑related disruptions and budget reductions from the Department of Government Efficiency (DOGE) as headwinds that postponed or reduced the value of some government deals. While the company’s focus on SLED contracts is expected to improve profitability over time, the transition period has compressed revenue growth and contributed to the YoY decline.
Gross profit margin for Q3 2025 was 7.1%, a contraction from 10.2% in the prior year, largely driven by the high operating expenses associated with the recent business combination and non‑recurring integration costs of $11.24 million in the first nine months of 2025. The low margin underscores the short‑term cost burden of the merger while the company invests in talent, AI technology, and new product capabilities.
Management guided for a first‑quarter 2026 run‑rate revenue of $4.17 million, up from $3.83 million in Q3 2025, and highlighted the $80 million-plus backlog as a key indicator of future revenue potential. The company also announced a new data‑modernization contract with its subsidiary SLG Innovation and confirmed partnerships with three Fortune 500 firms, reinforcing its strategic emphasis on AI‑powered identity and cybersecurity services.
CEO Kevin Kelly said the quarter represented a “pivotal integration phase” that “expanded margins, unlocked over $80 million in contract backlog, and set the stage for revenue inflection in the fourth quarter and beyond.” He added that the company’s cash position, now $3.70 million, strengthens its balance sheet and supports continued investment in AI‑driven solutions.
Investor attention has focused on the company’s growing backlog and AI initiatives, while concerns about the current net loss and low gross margin remain. The guidance and management commentary suggest confidence in long‑term value, but the short‑term financial pressures highlight the need for continued cost discipline and successful conversion of the backlog into revenue.
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