Phunware Inc (NASDAQ:PHUN, FRA:2RJA) reported improved fourth-quarter revenue and sharply higher margins, as the mobile software platform company pivots toward artificial intelligence-driven solutions for the hospitality sector.
Net revenue rose 33% to $0.8 million in the fourth quarter ended December 31, 2025, while gross margin expanded to 57.7% from 23.3% a year earlier, reflecting a shift toward higher-margin software offerings. The company’s net loss narrowed to $2.1 million from $2.6 million in the prior-year period.
For the full year, revenue declined to $2.6 million from $3.2 million, which the company attributed to a softer advertising market. However, Phunware said growth in its software business and improving margins position it for more durable performance going forward.
The company is increasingly focusing on the multi-billion-dollar hospitality industry, where it has launched new product tiers aimed at luxury hotel brands and independent full-service properties.
Central to Phunware’s strategy is its continued investment in artificial intelligence, including its AI Concierge product, which is now commercially available following a pilot with a large resort customer. The platform integrates conversational AI with real-time navigation and mapping technology, allowing guests to receive personalized recommendations and directions within hotel properties.
Phunware said it expects demand for AI-powered personalization tools in hospitality to accelerate in the coming years, citing industry forecasts that a growing share of technology budgets will be allocated to guest experience enhancements.
The company is also expanding its sales and marketing efforts to drive adoption of its AI-enabled products, while exploring opportunities for partnerships and acquisitions to strengthen its data and technology infrastructure.
The firm ended 2025 with $100.6 million in cash and cash equivalents.
“Looking ahead, we remain deeply committed to executing our transformative approach within the hospitality industry,” Interim CEO Jeremy Krol said, pointing to AI as a core driver of future guest experience and revenue generation.
Phunware’s improving margins, growing software mix and expanding AI capabilities underscore its push to reposition itself as a technology provider focused on personalized, data-driven engagement across physical venues.