Cloudastructure Highlights AI Security Growth, 164% Subscription Revenue Surge at Sidoti

Cloudastructure (NASDAQ:CSAI) outlined its growth strategy, recurring-revenue model and expansion across security-focused verticals during the Sidoti Conference, emphasizing its artificial intelligence-powered video surveillance platform and human-assisted remote guarding services.

Chief Executive Officer James McCormick said the company is focused on shifting video surveillance from a passive, forensic tool to an active protection system. Cloudastructure sends video through its proprietary appliance to the cloud, where artificial intelligence evaluates footage and indexes it for customer searches involving people, vehicles or specific events, he said.

McCormick said the company evaluates all video captured through its platform using AI models. For customers using its remote guarding offering, potential threats identified by the system are sent to human agents for review. Agents can issue audio warnings through speakers or contact local authorities when needed.

“If they determine that it’s something that requires further intervention, either a talk-down through a speaker or contacting local authorities, 98% of the time, we stop the event before it becomes a problem,” McCormick said.

Multifamily Focus and New Verticals

Cloudastructure began commercializing its platform after raising $35 million through Regulation A offerings between 2020 and 2022, according to Chief Financial Officer Greg Smitherman. The company secured its first multifamily customer in 2022 and added its first remote guarding team in 2023.

By 2024, Cloudastructure had six of the 10 largest U.S. property management firms as customers, Smitherman said. The company now works with eight of the top 10, including the top two, according to management.

The multifamily market remains Cloudastructure’s primary area of focus, but management said it is pursuing additional opportunities in critical infrastructure, active construction sites, trucking and logistics, and commercial real estate.

McCormick cited a relationship with a secure truck-lot operator, where the company provides security intended to prevent unauthorized access to trailers. He also referenced a recently announced agreement with an owner of open-air retail malls in Southern California. The agreement begins with six properties and could expand across the customer’s remaining portfolio, he said.

Rather than focusing solely on winning new accounts, the company is pursuing a “land and expand” strategy within existing customer portfolios. McCormick said Cloudastructure has negotiated master service agreements with some property management companies to streamline adoption at additional properties.

Recurring Revenue Growth

Smitherman said Cloudastructure generates revenue through hardware sales, installation services and subscriptions. Hardware and installation revenue can fluctuate because some customers already have cameras and systems in place when they switch providers.

The company’s subscription model consists of a base video surveillance service and an optional remote guarding service. Smitherman said the base price is $35 per camera per month, with potential discounts for larger customers or multiple properties. Remote guarding costs an additional $79 per camera per month for cameras selected for monitoring.

Cloudastructure reported that 57% of cameras it took over during 2025 had existing systems from other providers. That figure rose to 77% during the current year, Smitherman said.

• Subscription revenue increased 164% year over year in the second quarter of 2026, according to management.
• Recurring revenue represented 62% of second-quarter revenue.
• The company said recurring revenue was running at an annualized rate of $3.1 million, compared with approximately $2 million at the start of the year.
• Management reported a 99% customer retention rate.

Smitherman said the retention rate reflects the value customers place on the company’s deterrence capabilities, including reduced property damage and tenant complaints following attempted incidents.

Competition, Leadership and Capital Needs

McCormick identified Verkada, ECAM and smaller emerging companies as competitors. He said Cloudastructure differentiates itself through cloud-based video processing, analysis of all captured footage, continued AI model refinement and human review of AI-generated alerts.

Cloudastructure recently added Niall Coates as chief revenue officer. McCormick said Coates previously worked at competitor ECAM, where he managed $370 million of annual revenue and approximately 75 sales representatives. The company also added Ed Burnett as chief security and operations officer. Burnett spent 30 years at UPS, including his final 10 years overseeing U.S. security and global fraud investigations, McCormick said.

Management said it is also evaluating acquisitions and other strategic opportunities that could complement its technology or business model. McCormick said the company views public-company status as a potential currency for future mergers and acquisitions, though no transaction has reached a final stage.

On liquidity, Smitherman said Cloudastructure was burning slightly more than $500,000 per month and ended the second quarter with $3.8 million in cash. The company has financing facilities available and expects it will need to raise additional capital to reach cash-flow breakeven, though Smitherman said management does not expect the required amount to be extensive.

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.