Shares of Altigen Communications, Inc. (ATGN Quick QuoteATGN - Free Report) have gained 11.8% since the company reported its earnings for the quarter ended March 31, 2026. This compares to the S&P 500 index’s 0.3% change over the same time frame. Over the past month, the stock moved 17.6%, vastly outperforming the S&P 500’s 6.9% change.

For the second quarter of fiscal 2026, Altigen reported earnings per share (EPS) of 1 cent, which remained flat year over year.

Net revenue of $3.1 million denoted a decrease from $3.5 million reported in the second quarter of fiscal 2025. 

The company’s gross margin remained stable at 62%, and while GAAP net income decreased to $0.2 million from $0.3 million in the same quarter last year, non-

Non-GAAP net income was relatively flat at $0.5 million. The company’s adjusted EBITDA increased to $0.5 million, up from $0.3 million in the second quarter of fiscal 2025.

Altigen Communications, Inc. Price, Consensus and EPS Surprise

Altigen Communications,  Inc. price-consensus-eps-surprise-chart | Altigen Communications, Inc. Quote

Other Key Business Metrics

Altigen’s cloud services segment showed a decline in revenues, reaching $1.4 million, down from $1.9 million in the same quarter of the previous year. This shift is attributed to the company’s ongoing transition towards next-generation customer experience as a service (CXaaS) solutions. The segment related to services and other saw an increase in revenues, up to $1.6 million from $1.4 million a year earlier. Revenue from legacy products was $0.2 million, down from $0.3 million in the second quarter of fiscal 2025, a reflection of the company’s strategic shift away from its older product portfolio in favor of newer cloud-based offerings.

Management Commentary

CEO Jeremiah Fleming emphasized that Altigen is nearing the end stages of a significant transformation, moving away from its legacy SMB PBX offerings and advancing into AI-powered customer experience solutions. He acknowledged that this shift has led to some customer churn, but believes that the majority of this is now behind the company. Fleming also pointed to the migration of nearly 60% of customers to the new CXaaS platforms, which he believes will fuel future growth.

Fleming also highlighted the company’s ongoing profitability, with the current quarter marking the eighth consecutive profitable period. The strategy of transitioning to a cloud-based model is expected to provide significant long-term growth, with Altigen predicting a return to cloud revenue growth in the coming quarters.

Factors Influencing the Headline Numbers

The primary factors influencing the headline results include the migration of customers from legacy systems to the new CXaaS platforms, which has temporarily affected the company’s top line. However, the long-term outlook remains positive, with a focus on AI-powered customer engagement solutions that are expected to drive both profitability and revenue growth in the near future. The company’s gross margin stability and increased adjusted EBITDA are reflective of the company’s effective management of costs during the transition period. The stable net income and flat EPS further underscore the company’s ability to maintain profitability amidst ongoing restructuring.

Other Developments

In terms of other significant developments, Altigen continues to invest in its strategic transformation, particularly its expansion into the financial services market with its CoreEngage solution. The company has also forged a partnership with Fiserv, targeting large financial institutions. This partnership is expected to drive new revenue streams, with CoreEngage currently generating $0.04 million in monthly recurring revenue from financial services customers.