NEXE Innovations Inc (TSX-V:NEXE, OTC:NEXNF, FRA:FRA: NX5) reported higher revenue and improved cost controls in its second quarter of fiscal 2026, while outlining plans to accelerate commercialization through partnerships and licensing initiatives.
For the three months ended November 30, 2025, the maker of compostable materials and products reported revenue of about $199,000 up from about $71,000 in the same quarter a year earlier. The increase was attributed to the continued uptake of its compostable coffee pod, launched in late 2024, and the addition of a customer targeting the big-box retail channel.
Revenue for the first half of fiscal 2026 totaled about $319,000, surpassing the company’s full-year fiscal 2025 revenue of about $308,000, which the company said reflected growing customer traction.
Gross margins for the quarter remained slightly negative, largely due to one-time setup costs associated with onboarding a new customer and fulfilling an initial large retail order. However, on a per-unit basis, NEXE reported a 25% reduction in unit costs compared with the prior quarter, suggesting improving manufacturing efficiency as production volumes increase.
The company also reported lower operating expenses, with selling, general, and administrative costs declining 42.6% year over year to about $520,000, reflecting ongoing efforts to streamline spending. NEXE ended the quarter with cash and guaranteed investment certificates totaling $10.6 million and minimal debt.
Looking ahead, NEXE said it is exploring strategies to accelerate commercialization timelines, including collaborations, licensing agreements, and selective acquisitions. The company said that onboarding new materials with large coffee brands can take nine months to two years, and that working through established distribution channels could help scale its technology more quickly.
Beyond single-serve coffee pods, the company said it is evaluating a broader partnership-led approach to commercializing its proprietary compostable resins in additional applications.
"We believe that 2025 provided the commercial proof-of-concept for our technology; in 2026, we will focus on evaluating pathways to advance market access," NEXE president Ash Guglani said in a statement.
"We understand the reality of industry onboarding timelines. By looking at the partnership and licensing models that historically allowed the single-serve market to explode, we believe we can drive a faster ROI on our assets."
Shares of NEXE added 4.4% in Canada on Friday morning.