Karen Hersh, chief financial officer of Xtract One Technologies (TSE:XTRA), outlined the company’s weapon-detection technology, expansion into new end markets and fiscal 2026 financial performance during an investor presentation.
Hersh said the company is targeting a security market shaped by mass-shooting concerns, workplace safety issues, shortages of security personnel and increased demand for artificial intelligence-enabled security tools. She said conventional metal-detector systems were developed for an earlier era and can create delays and false alerts as people carry more electronic devices and other metal objects.
Xtract One’s systems are designed to allow people to pass through security screening without removing items such as phones, keys or wallets. The company’s technology alerts staff when it identifies a potential weapon, allowing other guests to continue entering a facility while the alerted individual undergoes secondary screening.
“Instead of six people getting through a metal detector in one minute, 60 people or more are getting through our system,” Hersh said.
Product Strategy and Addressable Markets
The company markets two primary gateway products: SmartGateway and Xtract One Gateway. SmartGateway is intended for high-throughput environments with relatively little personal-property “clutter,” such as stadiums, arenas and live-entertainment venues. Hersh said the product can help venues improve entry speed while reducing security staffing needs.
Xtract One Gateway, meanwhile, was designed for settings such as schools, where visitors may carry backpacks, laptops and other items that can trigger conventional systems. Hersh said the product addresses what the company calls the “backpack problem,” seeking to identify threats without generating alerts for every student carrying metal-containing school materials.
The company began in sports and entertainment venues but has expanded into schools, healthcare, manufacturing and convention centers, according to Hersh. She said four major automobile manufacturers use Xtract One systems to screen workers entering facilities, including sites with workforces of up to 10,000 people entering multiple times each day.
Hersh also cited the recently announced installation at the Metro Toronto Convention Centre. Other customers discussed during the presentation included Madison Square Garden, which has used the company’s products since 2023 and is also a shareholder, as well as the New York Islanders and the Sphere in Las Vegas.
Regulatory developments could further support demand, Hersh said. She referenced California Assembly Bill 2975, which she said requires screening in acute-care emergency hospitals, and the United Kingdom’s Martyn’s Law, which she said requires weapon-detection screening for buildings with 850 or more people.
Fiscal 2026 Growth and Backlog
Hersh said Xtract One generated CAD 28.8 million in revenue during fiscal 2026, representing growth of 108%. The company reported gross margins near 60%, while operating expenses rose 13% during the year, she said.
The company was adjusted EBITDA-neutral in the second half of its fiscal year, according to Hersh, who characterized the result as a milestone in its effort to build a scalable operating model.
- Fiscal 2026 revenue: CAD 28.8 million
- Revenue growth: 108%
- Gross margins: close to 60%
- Operating-expense growth: 13%
- Year-end contractual and pending backlog: CAD 44 million
Hersh said the company’s year-end backlog included CAD 25 million of contractual backlog, up from CAD 15 million a year earlier. She said contractual backlog represents installed systems awaiting revenue recognition, while pending backlog consists of signed contracts that have not yet been installed. The company expects to recognize at least CAD 10 million of the backlog during the first year, in addition to new bookings.
The Xtract One Gateway product accounted for approximately one-third of fiscal 2026 revenue and half of bookings in its first year in the market, Hersh said.
Customer Economics and Future Applications
During a question-and-answer session, Hersh said customer churn has been “quite negligible,” though the company does not disclose a specific rate. She said any churn that has occurred generally involved customers unable to maintain the product budget despite being satisfied with the system.
Hersh also described the potential economic benefits of faster venue entry. She said Madison Square Garden’s Radio City Music Hall used Xtract One systems at two of three entrances for its annual Christmas show, raising the share of guests seated on time from 75% to more than 90%.
According to Hersh, the venue found that guests spent CAD 5.40 more after entering the facility faster, as they had more time to purchase items such as coffee, merchandise or other concessions.
Looking ahead, Hersh said the company’s software platform could support detection of objects beyond weapons. Potential applications include identifying vapes or prohibited cell phones in schools and detecting stolen electronics leaving fulfillment centers. The company offers both upfront-purchase and subscription-based models, she said.
Hersh said Xtract One faces limited direct competition, identifying OPENGATE and Nasdaq-listed Evolv as notable competitors. She also cited millimeter-wave technology as an alternative approach better suited to slower screening environments such as airports.
About Xtract One Technologies (TSE:XTRA)
Xtract One Technologies is a leading technology-driven provider of threat detection and security solutions leveraging AI to deliver seamless and secure experiences. The Company makes unobtrusive weapons and threat detection systems that are designed to assist facility operators in prioritizing- and delivering improved ‘Walk-right-In’ experiences while enhancing safety. Xtract One’s innovative portfolio of AI-powered Gateway solutions excels at allowing facilities to discreetly screen and identify weapons and other threats at points of entry and exit without disrupting the flow of traffic.
