Elauwit Connection’s Q2 2026 recurring service revenue increased 81.8% to $1.2 million from approximately $700,000, even as total quarterly revenue declined sharply because of lower project-based network construction activity.
The growth in recurring revenue coincided with a major expansion in the number of units actively generating revenue. Billed units increased to 22,967 from 8,733, representing more than a doubling of the revenue-generating unit base over the past year.
The pipeline behind those billed units also expanded. Activated units reached 27,134 from 13,960, while contracted units increased to 42,687 from 32,094. Elauwit defines activated units as installed units that are operational but not yet collecting revenue because of onboarding, making the difference between activated and billed units a potential source of additional recurring revenue as onboarding is completed.
Backlog increased to $38.9 million from $35.9 million. The backlog includes remaining performance obligations associated with network design and installation as well as internet network services and related hardware and maintenance services.
The shift toward recurring revenue was masked by a large decline in total revenue. Q2 revenue fell 46.4% to $2.9 million from $5.3 million, primarily because network design and installation revenue declined to $1.6 million from $4.6 million. Elauwit described that construction business as inherently lumpy because revenue depends on project starts and progress.
For the first half, recurring revenue nearly doubled to $2.3 million from $1.2 million, even as total revenue declined 32.4% to $7.3 million. Management expects recurring service fees to continue increasing as a share of revenue as completed construction projects convert into long-term managed-network contracts.
Gross margin was 15.5% in Q2 compared with 15.1% a year earlier. Elauwit expects margins to improve over time as higher-margin recurring services comprise a greater share of the revenue mix, although operating expenses increased 129.3% during the quarter because of investments in project management, engineering and costs associated with being a public company.
The near-term balance-sheet position remains a significant constraint. Elauwit ended June with approximately $1.2 million of cash and a $900,000 working-capital deficit, while first-half operating cash use totaled about $5.2 million. The company disclosed substantial doubt about its ability to continue as a going concern.
Q2 net loss widened to approximately $3.13 million from $857,000, and the company entered a $2 million related-party business-loan agreement carrying a 15.5% annual interest rate to support working capital and continued network deployments.
Elauwit’s results therefore show two competing trends: declining project revenue and rising losses in the near term, but a rapidly expanding base of billed and activated units that is pushing the business toward a larger proportion of recurring service revenue.
