Legend Power Systems Inc. reported a 40% gross margin in the fiscal third quarter of 2026, nearly doubling from 22% in the same period a year earlier, despite a 43.9% decline in revenue to CAD 216,000. The Vancouver-based cleantech company attributed the margin improvement to cost reductions and operational efficiencies, including a more than 20% year-over-year decline in inventory levels.
Operating expenses fell 34.4% to CAD 608,000, while the company maintained monthly cash requirements of approximately CAD 145,000. Legend Power’s production backlog stands at 15 SmartGATE systems, and recent orders totaled about CAD 1.3 million for 12 units. The company’s stock traded at CAD 0.235, down 2.08% on the day, within a 52-week range of CAD 0.065 to CAD 0.30.
The margin gains follow the public release of preliminary findings from a government-funded evaluation at Oak Ridge National Laboratory, which assessed the performance of SmartGATE, Legend Power’s flagship voltage optimization system. The evaluation found that buildings operated 32 to 35 volts above optimized equipment nameplate conditions during normal utility operations. With SmartGATE engaged, operating voltage was maintained within 1 to 2 volts of nameplate levels, reducing thermal stress by approximately 15%—equivalent to a 7-degree Celsius decrease in operating severity.
For every 10-degree increase in operating conditions, the material life of systems is reduced by 50%, according to the company. Interim measurements indicated energy savings of 2.6%, average demand reductions of 2% to 4%, and peak demand reductions approaching 25% during portions of the evaluation. The Oak Ridge assessment also highlighted that utility-compliant power does not necessarily align with optimal power for building equipment.
Legend Power secured a Multiple Award Schedule contract from the U.S. General Services Administration in August, following its selection as one of eight technologies from an initial field of over 800 applicants for the Green Project/Proving Ground program. The company also announced an additional public-sector order in Ontario for a municipal social housing project encompassing more than 3,000 residential units across over 40 properties. Two follow-on orders for SmartGATE systems were received from Ontario school districts.
Management emphasized progress in repositioning the value proposition beyond energy savings alone. Randy, chief executive officer, stated the company has significantly improved its operating cost structure and production economics, with a growing backlog and increased order activity. Mike Cioce, vice president of sales and marketing, noted efforts to provide customers with a credible financial framework for assessing the broader benefits of SmartGATE, including reduced thermal stress and extended equipment lifespan.
The company aims to achieve cash flow breakeven in fiscal 2027 under its current cost structure, with additional material cost reductions of about 10% and potential supply-chain margin improvements of 10% to 15% if routing is streamlined.
