Legend Power Systems Inc. reported a 40% gross margin in the third quarter of 2026, a significant improvement from 22% in the same period a year earlier, as the company reduced operating expenses and streamlined production. Revenue fell 43.9% to CAD 216,000 from CAD 385,000 in Q3 2025, according to the earnings call transcript.
The company’s normalized gross margin reached about 50% when excluding unallocated overhead, while operating expenses declined 34.4% to CAD 608,000 from CAD 928,000 a year prior. Legend Power also reduced inventory by more than 20% year over year and announced orders totaling approximately CAD 1.3 million for 12 SmartGATE systems during the quarter. The production backlog stood at 15 systems.
Executives highlighted ongoing cost and supply chain improvements, including an expected 10% reduction in material costs and potential margin gains of 10% to 15% through routing optimization. The company aims to achieve cash flow positivity in fiscal 2027 under its current cost structure. Its production facility is currently equipped to handle forecasted output for the next two years.
The firm’s SmartGATE technology, which regulates voltage to reduce equipment stress, was evaluated by Oak Ridge National Laboratory. Preliminary findings indicated that buildings typically operated 32 to 35 volts above optimized levels, while SmartGATE maintained voltage within one to two volts of equipment nameplates. This adjustment reduced thermal stress by about 15%, equivalent to roughly 7 degrees Celsius in operating severity.
Energy savings averaged 2.6%, with demand reductions ranging from 2% to 4% and peak demand reductions approaching 25% during portions of the evaluation period. Operational benefits included fewer breaker trips, reduced lighting flicker, and fewer HVAC and elevator resets. The company has shifted its strategic focus from energy savings to broader infrastructure protection and equipment reliability.
Legend Power secured a General Services Administration Multiple Award Schedule contract in August, providing pre-negotiated pricing for U.S. public sector procurement. The company also highlighted commercial wins, including an Ontario municipal social housing project requiring SmartGATE for a portfolio of more than 3,000 residential units, and follow-on orders from Ontario school districts.
Shares of Legend Power closed at CAD 0.225 on August 26, up 2.27% from the prior session. The stock has traded between CAD 0.065 and CAD 0.30 over the past 52 weeks.
