RXT returns to profit on $55.8M debt buyback gain; gross margin compresses 150bp

Filed May 8, 2026 · Period ending March 31, 2026 · Compared to 10-Q May 12, 2025 · ~1 min read

Key Changes

• high

  Net income of $8.3M vs. $71.5M loss in Q1 2025, driven entirely by $55.8M gain on opportunistic debt repurchases ($95M principal retired for $46M cash). Operating performance deteriorated.

  MD&A: Net Income & Debt Extinguishment verify on EDGAR →
• high

  Gross margin compressed 150bp to 17.6% despite 1.9% revenue growth, as cost of revenue rose $20.5M. Suggests pricing pressure or higher delivery costs eroding unit economics.

  MD&A: Gross Margin verify on EDGAR →
• high

  Cash fell 27% YoY to $93.6M while revolver borrowings jumped from $30M to $150M. Operating cash flow halved to $5.1M despite return to profitability, indicating weak cash conversion.

  MD&A: Cash & Liquidity verify on EDGAR →