Episode Details

Gorilla Technology (GRRR) H1 2026 — H1 2026 (six months to 30 June): revenue $78.4M, up 99.3%; gross profit $3.8M, down 71.4%; gross margin 4.9% from 34.2%. IFRS operating loss $47.2M, net loss $46.9M, loss per share $1.74; adjusted EPS -$0.58. The June quarter, derived by subtracting the filed Q1 from the filed half: revenue $50.1M (+138% YoY, +78% QoQ) and gross profit of MINUS $2.11M. Adjusted EPS -$0.40 against a +$0.03 bar. FY2026 guidance raised to at least $200M. The stock fell 11.31% to $14.04 on 25 August and closed the week at $14.41. Gorilla's June quarter was the largest it has ever printed and the first in which it sold goods for less than they cost: gross profit of minus $2.11M on $50.1M of revenue. Every dollar of the growth is a hardware line that did not exist a year ago ($52.5M, against $0 external in H1 2025), while the service business that carried all of the historic margin shrank 34.2%. THE CALL: BEARISH (3/5, THE BIGGEST QUARTER EVER, SOLD BELOW COST) — base-case value ~$12.7 vs ~$14.41 today. KEY METRICS: - CALL: BEARISH 3/5, fair value $12.70 vs the $14.41 close of 28 August (-11.8%). Bear $5.94, base $13.39, bull $26.74, weighted 45/35/20. Street: Buy, $40.50 average (Compass Point $44, Cantor $40, Northland $40, A.G.P. $38) - and every one of those targets predates the release. - THE GROSS LINE: H1 gross profit $13.4M to $3.8M (-71.4%) while revenue doubled. June-quarter gross profit MINUS $2.11M against $7.04M a year earlier. Incremental gross margin on everything added year on year: -24.6% (revenue +$39.0M, cost of sales +$48.6M). - THE MIX: hardware $52.5M from $0 external (H1 2025's $22.9M was 100% eliminated on consolidation); services $25.9M from $39.3M, -34.2%. All hardware is booked at a point in time, all services over time. - THE FUNDING: $232M of 7.50% convertible notes in 63 days ($107M June, $125M July). Of the June $107M only $62.7M is debt - the other $44.3M is the conversion option. Filed effective interest rate 21.59%. Conversion at $25.4826 would add 9.10M shares to 27.24M, +33.4%. - THE RECEIVABLES: receivables plus contract assets $145.3M against $78.4M of half-year revenue (336 days), of which $104.8M is unbilled. 51.2% of invoiced receivables are past due; the credit-loss provision went $0.94M to $5.16M. Unfulfilled contracts -28.2% to $72.7M. What to watch: UP: a September quarter inside the guided $48-50M with gross margin back into double digits; cash actually collected against the $104.8M of unbilled contract assets. DOWN: another quarter of revenue growth on a negative gross margin; the credit-loss provision compounding past $5.2M; contract assets rising again at December. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.