Cloudastructure (NASDAQ:CSAI) executives highlighted accelerating growth, expanding end markets, and improving margins during a fireside chat hosted by Water Tower Research senior analyst James Kisner. Chief Executive Officer James McCormick, Chief Financial Officer Greg Smitherman, and Chief Revenue Officer Lauren O’Brien discussed the company’s AI-powered cloud video surveillance and remote guarding platform, competitive positioning, go-to-market priorities, and liquidity.
From “recording” to proactive security
McCormick said the security industry is shifting away from legacy systems that simply record events toward solutions designed to prevent incidents in real time. Cloudastructure’s platform combines cloud-based video surveillance, artificial intelligence and machine learning analytics, cloud storage, and what management described as “seamless remote guarding.”
2025 growth drivers and vertical expansion
Kisner referenced a company 2025 year-end review indicating approximately 270% year-over-year revenue growth, more than $5 million in recognized revenue, and approximately 306% year-over-year growth in Q4. McCormick attributed the 2025 growth to traction in the company’s largest vertical—multifamily housing—and expansion into new verticals.
McCormick said it took roughly 2.5 to 3 years to gain traction in multifamily, but once Cloudastructure is adopted by a property management firm, it becomes easier to “land and expand” within that organization. He also pointed to progress in transportation and logistics and the construction market as meaningful contributors to new customer and revenue growth.
Competitive positioning: real-world AI training and “human-in-the-loop” guarding
Asked how Cloudastructure differentiates itself from other vendors marketing AI-driven surveillance, McCormick argued the company’s solution “actually works” and said management has heard anecdotally that competing solutions do not perform as well, creating opportunities to displace incumbents.
He highlighted two primary differentiators:
- Model training using real customer footage: McCormick said the company trains its models on real video captured at customer sites—including challenging conditions such as low-light parking garages—rather than “clip art” or generic images.
- Remote guarding with human verification: McCormick described remote guarding as a “secret weapon,” with guards receiving alerts and reviewing live video to determine whether escalation is needed. He framed this as important for reducing false positives, such as distinguishing between dancing and fighting.
On product innovation, Kisner noted recent announcements including mobile surveillance trailers, powered enclosure technology, proprietary video compression that reduces bandwidth by up to 50%, and integration with autonomous drones. McCormick said “all of the above” matter, but singled out mobile security solutions and powered enclosures as especially impactful for expanding in construction and commercial properties, which he called “huge opportunities” looking into 2026 and beyond.
Go-to-market: segmenting sales and standardization opportunities
O’Brien said the company is dividing its sales organization in 2026 into two groups: one focused on existing markets and “land and expand” (including multifamily and some commercial), and another aimed at new markets such as trucking/logistics and construction, as well as “very, very large enterprise accounts.” She said the existing-market group is emphasizing master service agreements to speed expansion across customer portfolios.
O’Brien also discussed the scale of opportunity among current customers. She said Cloudastructure has “seven of the top 11” multifamily property management firms as customers, representing about 2.5 million units across their portfolios. Many, she said, are seeking to standardize on a common security platform, and she estimated the total available market within current logos at about $1 billion.
On sales cycles, O’Brien said multifamily has historically averaged roughly nine months from “cold lead to close,” but has shortened as the company has built trust and becomes a “gold standard.” She described construction and trucking decisions as faster, citing the need for quick deployment on projects.
She said large prospects tend to prioritize cloud-based architecture for managing hundreds of locations and increasingly look for remote monitoring as an alternative to on-site guards. O’Brien also provided an update on a relationship with a large trucking customer, describing positive feedback on onboarding, remote guarding, and AI performance. She said the customer is expanding quickly and that the engagement could reach $1 million in total contract value “in the very near future,” with the company hoping for more.
Margins, recurring revenue, and liquidity
Smitherman discussed the company’s revenue mix across recurring services (cloud video surveillance and remote guarding) as well as hardware sales and installation services. While noting the company provided a high-level 2025 update, he referred investors to previously released Q3 financials for detail.
On gross margin, Smitherman said that for the nine months ended Q3, margins increased from 17% in 2024 to 45% in 2025. For Q3 alone, he said gross margin rose from 16% to 52% year-over-year. He said SaaS companies can see significant margin expansion as they cross scale thresholds and expects the trend to continue, though he noted margins cannot rise indefinitely.
Smitherman said recurring revenue is building with “exceptionally low” churn, describing retention at about 99%. He cited a Q3 annualized recurring revenue run rate of about $1.7 million (based on multiplying Q3 by four), adding that the figure is now higher given growth.
On customer ROI, Smitherman provided an example from a customer that previously spent about $100,000 per year on a night guard. He said the customer’s first-year cost for cameras, installation, upfront purchase, and a year of service was about $67,000—equating to a 43% ROI in the first year—and that ongoing ROI was 133% once hardware costs were not repeated. He also cited qualitative benefits such as improved quality of life and potential impacts on vacancy rates.
Regarding operating leverage, Smitherman said certain corporate overhead does not scale proportionally with revenue. He also pointed to computing improvements: he said that four years ago a CVR could handle about 10 cameras, while current hardware can handle about 40 cameras at the same cost, creating leverage as compute and storage costs decline.
On liquidity, Smitherman said the company ended Q3 with $6.4 million in cash and has not disclosed the year-end balance, but stated the cash position “remains strong.” He outlined several capital access options disclosed publicly, including a $50 million equity line of credit (ELOC) that has not been drawn, a $40 million facility that has been partially drawn with most remaining available, and a $150 million S-3 shelf registration that includes an at-the-market (ATM) program.
In closing remarks, McCormick said the company is pursuing large addressable markets and expects “significant revenue growth” from 2025 to 2026, while emphasizing comfort with its cash position and access to capital. He pointed to operating leverage and gross margin improvements as factors supporting a “march to profitability.” As milestones for the year ahead, he said investors can look for patterns similar to 2025 company communications, including new customer wins, expansion within existing accounts, new product introductions, additional contracts, and positive financial results.
About Cloudastructure (NASDAQ:CSAI)
Cloudastructure, Inc (NASDAQ: CSAI) is a technology company specializing in cloud-based video security and surveillance solutions. The company’s core offering is a subscription-based Video-as-a-Service (VaaS) platform that enables customers to deploy, manage and monitor high-definition cameras and environmental sensors through a unified cloud interface. By leveraging scalable cloud infrastructure, Cloudastructure eliminates the need for on-site video recording hardware and simplifies system maintenance and updates.
In addition to managed hardware, Cloudastructure provides advanced analytics capabilities powered by artificial intelligence and machine learning.
