StartEngine Inc.
StartEngine Inc. filed its 10-Q for the quarter ended September 30, 2026. Revenue jumped 71% YoY to $38.6M, but the company swung to a $3.1M net loss from a $1.2M profit a year ago as operating expenses nearly doubled to $13.1M. For the nine months, revenue reached $107.9M but net income flipped from a $6.2M profit to a $3.5M loss.
- Q3 2026 revenue hit $38.6M, up 71% from $22.6M in Q3 2025
- Gross profit rose to $9.8M from $8.4M, but gross margin compressed to 25.3% from 37%
- Operating expenses nearly doubled to $13.1M from $7.2M, driven by G&A and sales/marketing
- Nine-month net income swung from $6.2M profit in 2025 to $3.5M loss in 2026
- Cash declined to $26.8M from $28.4M at year-end; operating cash flow turned negative at -$6.0M for nine months
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A 71% revenue surge paired with a swing from profit to loss captures the classic growth-versus-profitability tension that defines high-stakes fintech platform investing.
StartEngine operates as an equity crowdfunding platform competing with Republic and Wefunder. The 71% revenue growth signals strong platform traction, but the swing to operating losses mirrors the broader challenge among growth-stage fintech platforms balancing scaling against profitability.
Cost of revenues grew 103% YoY to $28.9M, outpacing revenue growth and compressing gross margin. Operating expenses nearly doubled, with G&A up 84% and sales/marketing up 126%. The company holds $20.2M in private investments and $8.4M in stock investments, exposing it to illiquidity and impairment risk.