WIDEPOINT CORP

Previous wording

We are a leading provider of Technology Management as a Service (TMaaS) that consists of federally certified communications management, identity management, interactive bill presentment and analytics, and Information Technology as a Service solutions. We help our clients achieve their organizational missions for mobility management, information technology management, and cybersecurity objectives in this challenging and complex business environment.

Current wording

We are a leading provider of Technology Management as a Service (TMaaS) that consists of federally certified communications management, identity management, and interactive bill presentment and unified communication analytics solutions and IT as a Service (ITaaS). We help our clients achieve their organizational missions for mobility management and security objectives in this challenging and complex business environment.

Previous wording

We offer our TMaaS solutions through a flexible managed services model which includes both a scalable and comprehensive set of functional capabilities that can be used by any customer to meet the most common functional, technical and security requirements for mobility management. Our TMaaS solutions were designed and implemented with flexibility in mind such that it can accommodate a large variety of customer requirements through simple configuration settings rather than through costly software development. The flexibility of our TMaaS solutions enables our customers to be able to quickly expand or contract their mobility management requirements. Our TMaaS solutions are hosted and accessible on-demand through both a secure federal government certified proprietary portal and/or through a secure enterprise portal that provides our customers with the ability to manage, analyze and protect their valuable communications assets, and deploy identity management solutions that provide secured virtual and physical access to restricted environments.

Current wording

We offer our TMaaS solutions through a flexible “As-a-Service” model or “Xaas” which includes both a scalable and comprehensive set of functional capabilities that can be used by any customer to meet the most common functional, technical and security requirements for mobility management. Our TMaaS solutions were designed and implemented with flexibility in mind such that it can accommodate a large variety of customer requirements through simple configuration settings rather than through costly software development. The flexibility of our TMaaS solutions enables our customers to be able to quickly expand or contract their mobility management requirements. Our TMaaS solutions are hosted and accessible on-demand through a secure federal government certified proprietary portal that provides our customers with the ability to manage, analyze and protect their valuable communications assets, and deploy identity management solutions that provide secured virtual and physical access to restricted environments.

Previous wording

In fiscal 2025, we continue to focus on the following key goals:

Current wording

In fiscal 2026, we will continue to focus on the goals identified in our Annual Report on Form 10-K as well as the following:

Previous wording

Revenues. Revenues for the three month period ended September 30, 2025 were $36.1 million, an increase of $1.5 million (or 4%) compared to $34.6 million in the same period in 2024. Our mix of revenues for the periods presented is set forth below:

Current wording

Revenues. Revenues for the three months ended March 31, 2026 were $40.6 million, an increase of $7.1 million (or 21%) compared to $33.5 million in the same period in 2025. Our mix of revenues for the periods presented is set forth below:

Previous wording

Managed Service Revenues. Total managed services revenue were $15.7 million, an increase of approximately $3.5 million compared with $12.2 million in the same period in 2024 as follows:

Current wording

Managed Service Revenues. Total managed services revenue was $14.8 million, an increase of $3.6 million compared with $11.1 million in the same period in 2025 as follows:

Previous wording

Carrier Services Revenues. We also procure, process and pay communications carrier invoices on behalf of customers. Under many of our carrier services arrangements, we recognize revenues and related costs on a gross basis. A significant portion of our overall reported revenue consists of revenue from carrier services; however, it represents an insignificant portion of our overall reported gross profit. This is a commodity type service and margins are nominal, but this is a necessary service to deliver to federal government customers that engage us to provide a full-service solution. Our carrier services revenue was $65.0 million, an increase of $2.8 million, as compared with the same period in 2024. The increase in carrier services revenues over the same period last year is a result of the growth in the number of phone lines under management during 2025 for our DHS customer.

Current wording

Carrier Service Revenues. We also procure, process and pay communications carrier invoices on behalf of customers. Under many of our carrier services arrangements, we recognize revenues and related costs on a gross basis. A significant portion of our overall reported revenue consists of revenue from carrier services; however, it represents an insignificant portion of our overall reported gross profit. This is a commodity type service and margins are nominal, but this is a necessary service to deliver to federal government customers that engage us to provide a full-service solution. Our carrier services revenue was $25.8 million, an increase of $3.4 million, as compared with the same period in 2025. The increase in carrier services revenues over the same period last year is a result of the growth in the number of phone lines under management during 2025 for our DHS customer.

Previous wording

Cost of Revenues. Our cost of revenues include employee labor, excluding fringe benefit costs, and subcontractors directly associated with satisfying customer performance obligations, and the associated cost of products and third-party software that we resell to our end customers. Cost of revenues also includes depreciation and amortization of capitalized software related to delivering our solutions. Cost of revenues for the three month period ended September 30, 2025 were $30.8 million (or 85% of revenues), an increase of $0.9 million from $29.9 million (or 86% of revenues) in the same period in 2024. Included in cost of revenues is carrier costs paid on behalf of our federal government customers of approximately $20.4 million and $22.4 million for the three month periods ended September 30, 2025 and 2024, respectively.

Current wording

Cost of Revenues. Our cost of revenues include employee labor, excluding fringe benefit costs, and subcontractors directly associated with satisfying customer performance obligations, cash back rewards received associated with vendor payments made on behalf of customers, and the associated cost of products and third-party software that we resell to our end customers. Cost of revenues also includes depreciation and amortization of capitalized software related to delivering our solutions. Cost of revenues for the three months ended March 31, 2026 were $34.9 million (or 86% of revenues), an increase of $6.2 million from $28.7 million (or 86% of revenues) in the same period in 2025. Included in cost of revenues is carrier costs paid on behalf of our federal government customers of approximately $25.1 million and $21.6 million for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Gross Profit. Gross profit for the three month period ended September 30, 2025 increased on a dollar basis by $0.6 million to $5.3 million (or 15% of revenues), compared to $4.7 million (or 14% of revenues) in the same period in 2024.

Current wording

Gross Profit. Gross profit for the three month period ended March 31, 2026 increased on a dollar basis by $0.8 million to $5.6 million (or 14% of revenues), compared to $4.8 million (or 14% of revenues) in the same period in 2025.

Previous wording

Gross profit as a percentage of managed services revenue (excluding carrier services) for the three month period ended September 30, 2025 was 34% compared to 38% in the same period last year due to slightly higher labor costs, as we bolster our customer delivery and relatively more reselling revenues which carry lower margins, compared to the same period last year.

Current wording

Gross profit attributable to carrier services revenue (excluding managed services), for the three-months ended March 31, 2026 was 2% compared to 3% in the same period last year, the gross profit reflected related to carrier services results from cash back rewards received from third party payment platforms associated with vendor payments made on behalf of customers. Gross profit as a percentage of managed services revenue (excluding carrier services) for the three months ended March 31, 2026 was 34% compared to 37% in the same period last year due to slightly higher labor costs, as we bolster our customer delivery and relatively more reselling revenues which carry lower margins, compared to the same period last year.

Previous wording

**Sales and Marketing.Sales and marketing expenses include employee labor, excluding fringe benefit costs, and sales commissions associated with our sales force, commission fees paid non-employee sales agents and partners, and costs associated with travel and trade shows.**Sales and marketing expense for the three month period ended September 30, 2025 increased by $0.2 million to $0.7 million (or 2% of revenues) compared to $0.5 million (or 2% of revenues) in 2024, reflecting increased sales and marketing activities in the third quarter of this year.

Current wording

**Sales and Marketing.Sales and marketing expenses include employee labor, excluding fringe benefit costs, and sales commissions associated with our sales force, commission fees paid to non-employee sales agents and partners, and costs associated with travel and trade shows.**Sales and marketing expense for the three months ended March 31, 2026 was $0.6 million (or 1% of revenues) and remained relatively consistent compared to $0.6 million (or 2% of revenues) in 2025.

Previous wording

General and Administrative. General and administrative expenses include employees in finance, human resources, information technology, and other administrative support functions; employee labor not associated with any single revenue producing activity, all company fringe benefits, including paid time off, employee health and medical insurance, 401k matching contributions, and payroll taxes. General and administrative expenses also include professional services to include audit, consulting, outside legal, and outsourcing services. Certain of these expenses, including those associated with the operation of our technical infrastructure as well as components of our operating expenses, are generally less variable in nature and may not correlate to the changes in revenue. General and administrative expenses for the three month period ended September 30, 2025 were $4.8 million (or 13% of revenues), as compared to $4.4 million (or 13% of revenues) in 2024. The dollar increase during 2025 primarily relates to general inflationary pressures, additional headcount and associated costs, which were partially offset by $50,000 less share-based compensation expense compared to the same period in 2024.

Current wording

General and Administrative. General and administrative expenses include employees in finance, human resources, information technology, and other administrative support functions; employee labor not associated with any single revenue producing activity, all company fringe benefits, including paid time off, employee health and medical insurance, 401k matching contributions, and payroll taxes. General and administrative expenses also include professional services to include audit, consulting, outside legal, and outsourcing services. Certain of these expenses, including those associated with the operation of our technical infrastructure as well as components of our operating expenses, are generally less variable in nature and may not correlate to the changes in revenue. General and administrative expenses for the three months ended March 31, 2026 were $4.8 million (or 12% of revenues), compared to $4.7 million (or 14% of revenues) in 2025, with the slight increase primarily due to higher share-based compensation of approximately $50,000. The increase was partially offset by approximately $0.5 million of internal IT labor costs that are typically reflected within general and administrative expenses but were reassigned during the current period to implementation activities associated with a long-term customer contract. These costs were deferred during the period in connection with implementation activities under the long-term customer contract. Because the implementation services do not represent a distinct performance obligation, the related revenue and costs are deferred and will be recognized over the contract term.

Previous wording

**Other Income (Expense), Net.**Other income, net for the three month period ended September 30, 2025 was $35,900 compared to other income, net of $7,100 in 2024 as a result of higher earnings on cash deposits and less borrowing under our line of credit.

Current wording

**Other Income (Expense), Net.Other income, net for the three months ended March 31, 2026 was $91,650 compared to other expense, net of $1,600 in 2025 as a result of higher earnings on cash deposits and a gain on sale of property and equipment. **

Previous wording

Income Taxes. Income tax provision for the three month period ended September 30, 2025 was $134,400 as compared to income tax benefit of $18,700 in 2024. Income taxes were accrued at an estimated effective tax rate of (31.6)% for the three month period ended September 30, 2025 compared to 4.2% for the three month period ended September 30, 2024.

Current wording

Income Taxes. Income tax benefit for the three months ended March 31, 2026 was $43,700 as compared to income tax benefit of $94,000 in 2025. Income taxes were accrued at an estimated effective tax rate of (131.22)% for the three months ended March 31, 2026 compared to 11.5% for the three month period ended March 31, 2025.

Previous wording

Net Loss.* *As a result of the cumulative factors described above, net loss for the three month period ended September 30, 2025 increased by $134,000 to $559,200 compared to net loss of $425,200 for the three month period ended September 30, 2024.

Current wording

Net Income (Loss).* *As a result of the cumulative factors described above, net income for the three months ended March 31, 2026 increased by $801,100 to $77,000 compared to net loss of $724,100 for the three months ended March 31, 2025.

Previous wording

At September 30, 2025, our net working capital was approximately $2.2 million compared to $2.4 million at December 31, 2024. We believe that our existing cash balances and our anticipated cash flows from operations and access to our credit facility, will be sufficient to meet our working capital, expenditure, and contractual obligation requirements for the next 12 months. There is no assurance that, if needed, we will be able to borrow or raise capital on favorable terms or at all.

Current wording

At March 31, 2026, our net working capital was approximately $2.8 million compared to $2.3 million at December 31, 2025. In response to the DHS-specific partial government shutdown, the Company took prudent steps to preserve liquidity, including the temporary deferral of approximately $7 million of cumulative payments. We believe that our existing unrestricted cash balance of $10.9 million and our anticipated cash flows from operations and access to our credit facility, will be sufficient to meet our working capital, expenditure, and contractual obligation requirements for the next 12 months. The Company is working with Old Dominion National Bank to extend the maturity date under substantially the same terms as previous iterations of the line of credit.

Previous wording

For the nine months ended September 30, 2025, net cash provided by operations was approximately $5.8 million driven by collections of accounts receivables and is partially offset by temporary payable timing differences. In the same period in 2024, $0.8 million net cash was used in operations.

Current wording

For the three months ended March 31, 2026, net cash used in operations was approximately $0.9 million driven by increases in accounts receivables and is partially offset by temporary payable timing differences. In the same period in 2025, $3.2 million net cash was used in operations.

Previous wording

For the nine months ended September 30, 2024, cash provided by investing activities was approximately $0.2 million and consisted of receipt of deferred portion of proceeds from factoring arrangement offset by purchases of property and equipment.

Current wording

For the three months ended March 31, 2026, cash used in investing activities was approximately $28,800 and consisted of purchases of property and equipment offset by proceeds received in disposal of property and equipment.

Previous wording

For the nine months ended September 30, 2025, cash used in investing activities was approximately $0.1 million and consisted of purchases of property and equipment.

Current wording

For the three months ended March 31, 2025, cash used in investing activities was approximately $27,600 and consisted of purchases of property and equipment.

Previous wording

For the nine months ended September 30, 2024, cash used in financing activities was approximately $0.7 million and reflects line of credit advances and payments of $4.6 million, lease principal repayments of approximately $456,800, and withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $258,400.

Current wording

For the three months ended March 31, 2026, cash used in financing activities was approximately $0.2 million and reflects finance lease principal repayments of approximately $131,600 and withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $106,900.

Previous wording

For the nine months ended September 30, 2025, cash used in financing activities was approximately $0.5 million and reflects line of credit advances and payments of $2.8 million, finance lease principal repayments of approximately $412,300, and withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $130,700.

Current wording

For the three months ended March 31, 2025, cash used in financing activities was approximately $0.2 million and reflects line of credit advances and payments of $2.8 million, finance lease principal repayments of approximately $120,000, and withholding taxes paid on behalf of employees on net settled restricted stock awards of approximately $115,200.

Previous wording

For the nine months ended September 30, 2025 and 2024, fluctuations in the Euro and U.S. dollar exchange rate decreased the translated value of our foreign cash balances by approximately $52,300 as compared to last year.

Current wording

For the three months ended March 31, 2026 and 2025, respectively, fluctuations in the Euro and U.S. dollar exchange rate increased the translated value of our foreign cash balances by $5,845 as compared to last year.