Good afternoon, everyone. Thanks for joining us today. We have an update webinar with Tantalus, which is listed on the TSX under the ticker GRID. As many of you know, they reported record Q2 results last week, and we had an official earnings call. If you would like to check that out, it is on Tantalus's website. This is more of an unofficial call, so investors are able to ask questions. I am having a little bit of technical issues. Pete and I are both attending the Canaccord Growth Conference, and we have some Wi-Fi connectivity issues. I am trying to get him into the panelist room, i f you can just give me a couple minutes.
While I deal with the tech issue, I will maybe just introduce Azim Lalani, CFO. While I sort this out, maybe you can start an overview of the quarter, Azim, if you do not mind. Apologies everyone. I hope to get this sorted quickly.
Thanks, Deborah. Good afternoon, everyone. Just a quick overview of the quarter. As Deborah mentioned, Tantalus delivered a record second quarter. More than any single number, this quarter really demonstrates the durability and operating leverage of our business model. Four key results that I wanted to highlight include record revenue of $15.4 million, up 18% year-over-year. Gross profit margin of approximately 55%, well above our target of 50%. We delivered positive adjusted EBITDA of $690,000, up 35%. We have the strongest balance sheet in our history, with total liquidity of $41.3 million. When you look at our results on a trailing six-month basis, we delivered first half revenue of $30 million and trailing 12-month revenue of approximately $60 million.
Okay, great. I think that we have got Pete on his phone connected in. Pete, are you able to talk?
I can definitely talk. The question is, can you hear?
I can hear you.
Great.
I think you're good to go.
Thanks for troubleshooting.
A pologies again, Pete, and t o the audience. Technology, just got to roll with it.
For sure. Everybody knows that they don't need to see my ugly mug anyway. I would just add, Azim, thanks for providing the summary on the financial performance. I think incremental to the financial highlights that Azim just walked everybody through, from a commercial perspective, I would just add a couple good data points. In the aggregate, we added another eight utilities to our user community. A good indication that we continue to be able to identify new utilities to join the broader user community and convert new logos out of our pipeline. Then where I know a lot of attention is consistently and appropriately paid to, is the progress that we've made on the TRUSense Gateway. We were extremely excited to share the increase in the number of utilities that are placing orders for the TRUSense Gateway and commencing field trials and pilots and tests.
That number is now 77 utilities in our first 18 months of commercialization. More importantly than the 77, is the progress that we've made with utilities that have cleared through pilots and trials into deployment. Of the 77 utilities, we've had 40 complete their analysis. Of those 40 utilities, 37 have moved forward with deployments of the technology. That varies in size and scale and use case. 37 utilities are moving forward. The remaining three, that have completed their analysis are all keeping the devices in the field, t hey just don't yet have funding to support a deployment. From our team's perspective, we're batting a thousand on the first 40 utilities that have been playing with and evaluating the technology.
Incremental to that, every new utility that we've added of late is putting the TRUSense Gateway into the field as part of their broader TRUConnect AMI system and as part of their longer-term grid modernization efforts. We continue to validate the differentiation of the technology, continue to identify opportunity both with new utilities as well as our existing customer base. So far have, I think, really surpassed our expectations in what this technology means for our company moving forward. Overall, really pleased with the quarter. Deb, more than happy to make sure we maximize everybody's time with any questions and answers that folks have.
Sounds great, and congrats. It was a fantastic quarter. The progress you've made across the board has been phenomenal. Again, to the audience, if you have Q&A, please feel free to input them in the Q&A box. While we're waiting for that to get started, I guess I can take a couple questions or ask a couple questions myself. You talked about the 37 of the 77 utilities that have ordered TRUSense have progressed beyond the pilot stage. What are you learning about how utilities move from testing to broader deployment ? What use cases are driving that, or what tends to drive that decision?
Yeah. Let me talk about the use cases. I'll start there, Deb. There are, at the highest level, three primary use cases that we are focused on. One of which is supporting the broader AMI or smart metering TRUConnect AMI systems that we're deploying. That breaks down into two different scenarios, but it's applicable to all utilities that have put the technology into the field. Scenario one, under that broader, I'll put it, the communications network behind grid modernization. Scenario one is with an increasing number of our longstanding customers that are actively using the TRUSense Gateway to upgrade their existing system.
The one that is the easiest to explain and codify is for longstanding utilities that are members of our user community that leveraged a communications networking technology in the radio frequency or RF band for the 220 MHz band, which 15 + years ago, was an incredibly effective technology from a cost and from a coverage perspective, particularly in footprints where cellular networking or cellular access was not readily available or very expensive. What we are seeing is with the advancements in either deployment of fiber or the advancements in LTE and 5G networks and the corresponding coverage across the U.S., many of those utilities now have prolific access to higher bandwidth communications technology, either fiber or cellular. We are seeing a very clear path for longstanding customers to begin making that migration and upgrading existing systems.
It gets to the mantra of you do not have to rip and replace metering any longer. There are better ways and more effective ways to access capital, put capital to work, and modernize the grid. We are seeing an increasing number of utilities begin that journey with us to adopt, embrace, and deploy our latest innovations. The second scenario around the communications networking infrastructure, use case one is for new utilities. The TRUSense Gateway is a collector as part of its design, multifunctional purpose. In that context, it is the only collector in the industry that simultaneously tracks power quality. We position it as a network with purpose. It is not just about moving data from a meter or from a sensor in the field. It is about, more importantly, tracking power quality throughout the system.
What we are finding is where it really is further differentiated is in the implementation and installation. Most collectors, I should say pretty much all collectors in the broader smart metering world today, require height. They are deployed with bucket trucks, put up on utility poles, put up on buildings, put up on water towers. Height is might in the world of communications technology. That is different when you start to leverage fiber at the ground level or cellular. We are seeing utilities look to the TRUSense Gateway as a means of proliferating a very robust communications network right at the meter socket, meaning eliminating bucket trucks and truck rolls, which saves immediate dollars for the utility and simplifies the installation process to activate a network.
On the communications networking side, we are gaining traction and getting this technology into the field with corresponding upgrades and/or enhancements and deployments of the core competencies of Tantalus, so it is a pull-through. The second use case is around power quality measurement. I would say depending on the utility of the 77, some much more progressive in utilizing data and looking to harness the power of that data through power quality. Some utilities just not there yet. That is okay because as long as the TRUSense Gateway is deployed and meets at least one use case, like I just conveyed that the communications networking side of our equation, or portion of our equation, that power quality measurement is there. It is accessible, whether the utility wants it today or not ready for that type of data and that type of analysis in their system.
But we are certainly seeing power quality measurement capabilities of the TRUSense Gateway also as a point of differentiation for our company, and seeing an increasing number of those 77 utilities ask to activate our power quality alarms. From power quality alarms comes our analytics tools around reliability, transformer monitoring, and now TRUGrid Verify, which we launched in May at our users conference. The third use case, and the one that I think will take the longest time to really materialize, but one that arguably has the largest opportunity for Tantalus, is the behind-the-meter control. To that end, and for those that have been tracking us, we've talked about the project up in Connecticut with an investor-owned utility called The United Illuminating.
As of the third week of July, we have three public hearings with the regulators up in the state of Connecticut, have now a stamped and validated project that has demonstrated the ability of the TRUSense Gateway to be deployed in the field and communicate directly to water heaters, thermostats, and smart circuit breakers that were deployed at locations, and having that load under control and under management for the utility to use at its disposal. As I think about, and as we think about the broader capacity constraints that are unfolding across the United States and Canada, as we think about affordability issues, and as we think about protecting transformers and other assets, the ability to aggregate and then either shave or shift peak load is becoming increasingly important.
When we broadly think about the rise of data centers, I get this question quite a bit, how does Tantalus play in the world of data centers? I see an increasing dynamic where a data center is entering into a rural footprint, an electric co-op, or public power. That's where about 67% of all permanent applications for data centers are in the United States today. I see immediate opportunity that's building for us around helping utilities prepare for the onslaught of that industrial large load. We're starting to see some semblance of partnership between data center and utility to leverage and aggregate a combination of distributed energy resources, such as batteries at the substation and load management behind the meter that can be aggregated to deal with frequency and imbalance that unfolds when that influx of power is consumed by the data center as compute spikes.
The behind-the-meter capabilities continue to surface for us over time, the one that's moving the needle for us, immediate term power quality and the communications networking side. It's fairly robust, Deb. The disaggregation of utilities based on use case kind of spreads through those 77 utilities, but we are validating each one of those use cases as we go.
Okay, great. We've got a bunch of audience questions now, so let's get rolling. Someone suggested I turn off my camera to improve connectivity, but maybe they were sick of my mug too, Pete. Let's start with book-to-bill. Your H1 book-to-bill of 0.97x implies Q1 conversions of roughly $ 19.6 million and Q2 conversions of $ 9.9 million, about 0 .64x for the quarter. Is that timing of a specific large award slipping out of Q2, or is the utility approval cycle you referenced pushing a broader set of decisions into the second half of the year?
Yeah. I appreciate the question being asked. From our perspective, we track book-to-bill, for those of you that have been following us for some time. Internally, as well as externally, we report a rolling book-to-bill ratio through a calendar year starting January 1st and then building through December 31st. I think it's a misunderstood data point for us, I very much appreciate it's become a focus for some of our partners on the metering side and how they present their financials and visibility. For us, first and foremost, from a size perspective, we're still a relatively small company. Secondarily, we're focused on public power and electric cooperative utilities that by nature are smaller utilities, and order size based on utility can vary pretty widely. Within a 90-day period, we can see quite a bit of variability in what that book-to-bill ratio looks like.
If you look back at the last 14 reported quarters, our book-to-bill, and obviously we go further than that dating back to 2021. 2021 and 2022, we reported annual orders. We started to migrate to more detailed reporting on a quarterly basis for our orders number starting in 2023. Over the past 14 quarters, where an investor can disaggregate or shareholder can disaggregate orders on a quarterly basis, the book-to-bill ratio over a 90-day window has ranged for this company from a 0.4x - 2.3x. While we always want to try to convert as many orders as possible, as quickly as possible in a calendar year to increase visibility, that variability is not a reflection, in our opinion, of demand and its durability with our customer base.
Converting utilities out of our pipeline and building our user community, as an example, is one that we pay more attention to. On a first six months of the year, 0.97x sort of not too far outside of the realm of where we can be in a six-month period. I'm focused more on that than I am three months. With that said, a couple of other data points that we've shared through the Q&A process on our earnings call last week, and certainly in our materials. As of June 30th of this year, we have eight utilities that have selected Tantalus and are in contracting. That compares to four utilities same time last year. The timing of those conversions from selection to contract, and contract to actual order, it varies.
Sometimes there's an influx of signature at the end of a quarter, and sometimes those signatures get pushed into the next quarter or reporting timeframe. We still have very robust activity and where we have been selected in the grand scheme of things. I would say through the first six months of the year, Tantalus has been selected by 16 utilities. On average, we convert 20 utilities in a calendar year. I think that's pretty strong. The other data point that we shared is pipeline. We don't quantify our pipeline because it can be extrapolated in so many different ways. We do track not only aggregate pipeline, we track qualified pipeline. As a data point for investors, our qualified pipeline has increased by 35% year-over-year as of June 30th. The durability of demand is there. The opportunity continues to present itself.
It's just one of those metrics that it is a data point. I'm conscious of it. I'm not trying to be defensive around it, but it's a data point for us that can swing so dramatically within a 90-day period. There's nothing that gives us pause or can raise this concern for the company as we think 12 months, 18 months, 24 months.
Got it. Okay, thanks. I think that sufficiently deals with book-to-b ill. How do you expect R&D expenses to scale from the 2026 Q2 level as your top line grows in the coming years?
I'll give a high level and then would ask Azim to jump in in a little bit more detail. When you extrapolate the R&D spend, I'd say there are a couple of non-recurring items, one-time expense items from a restructuring perspective that hit the R&D line in Q2. That overstates the actual dollar spend on a go-forward basis. I think that's something to extrapolate out. With that said, we plan on continuing to invest in R&D, especially as it relates to our cloud computing expertise and our data analytics. Those are two areas where we can drive significant opportunity, both for TRUGrid Advantage, which is our new managed service offering, and certainly on the analytics side to drive more recurring revenue. Azim, do you want to dive deeper there?
Yeah, absolutely. Certainly, I think the expectation is that R&D dollars will increase over the next few quarters as we invest in the analytics and other product roadmaps. I think over time, the expectation is that as revenue crystallizes, we'll see R&D as a percentage of revenue decline.
Yeah, I think that's a valid point there, Deb. We're a technology company that's driving innovation. In order to innovate, we'll continue to invest in R&D. So we're tracking as a percent of aggregate revenue, and it's something that we obviously can control. It ties to headcount, and investment in that headcount.
Got it. Okay, so of the 37 utilities that have started deploying the TRUSense Gateway, how many are paying for Verify and/or Advantage? Can you broadly discuss the cost of each?
We're not, I think, comfortable sharing costs and making that type of information publicly available where it would be in the hands of other utilities in our space or competition. The activation of those two new services from our users conference in May, order of magnitude, we have six utilities that have activated TRUGrid Verify through June 30th. We had, I think, seven utilities that have opted into our TRUGrid Advantage, which is the managed service offering that we've activated to help some of the smaller utilities that just don't have the staff or the resources to really take advantage of the analytics tool. I think it's a great way for us to put our toe in the water on a more comprehensive managed service offering as we think more broadly around the entire grid modernization solution that we're bringing to market.
On your analyst call, you mentioned that you've signed up an IOU from the Northwest region. Going through the rate case process must have been very informative. Can you expand on lessons learned and what it portends for your ability to tap this IOU market?
Yeah. For point of clarification, the utility is actually up in Northern California. I think it's Northern California. It's a small IOU that is equivalent size of what you'd see in the public power and electric cooperative space. It's an investor-owned utility that is responsible for order of magnitude 50,000 homes, 50,000 m. I'd say that the attributes around that opportunity, I don't know if it's a great case study or data point for us as it relates to expanding our core competencies in pursuing IOUs and going through that rate case procedure. I think probably The United Illuminating Project in Connecticut has been a bit more informative for us as we think about attacking that market longer term, particularly through the TRUSense Gateway. But I'd say we certainly got some great insights as to the decision-making at the IOU.
It is different than that of public power and electric cooperative utilities. With that said, the rationale for selecting Tantalus remain the same. It ties to the flexibility of our capabilities, the increasing breadth of what we're able to do, help utilities do. It's helping protect and extend the life of some existing assets that that utility had in particular. It's very much geared towards the analytics capabilities and the service offering that's wrapped around it. So I wouldn't necessarily say that's the barometer for us in a broader regulatory rate case scenario. But we are, and have just recently made some further investments in the sales and marketing team with individuals that have personal experience from a career perspective of selling into IOUs. So it's an area of continued focus for us.
Then one clarifying question. So from an investor, I saw a quote that there's 150 million meters deployed in the U.S. between co-ops and munis. I believe that's the total meter number, though. But the question is, how many more meters are there, including IOUs?
Yeah. There are approximately 150 million electric meters in the U.S. in total. Two-thirds of those, approximately, rounding purposes, about 100 million of those meters fall under the purview and responsibility of investor-owned utilities. Roughly 50 million meters fall within the 2,850 public power and electric cooperative utilities. As we think about TRUConnect AMI, the landscape we are pursuing is those 50 million endpoints, of which today we're at over 4 million, with about another million not yet deployed at our existing customer base. Call it about 10% of our target market. There's a roughly, this percent kind of swings a little bit based on different data points and research, but 17.5%-20% of all meters across the U.S. are still read manually. There is still a pretty significant percent of meters that need any form of automation.
There is also a pretty substantial percent of meters that tie back to what some in our industry refer to as AMI 1.0. We see an increasing number of utilities coming back into market to think about their next generation of metering and broader grid modernization. That's where our retention rate of our customer base becomes so important. As well as, I think, Deb, our mantra of really being able to help utilities extend the life of existing assets. It just provides another path for us to be competitive as those utilities come back into market and start to think about the next partner that they're going to rely on for the future. I think within our IR deck, there is a chart that we include from Northeast Group, which is a third-party research organization that does a very good job of tracking the smart metering industry.
It's on, I think it's slide six of our investor deck. It reflects a combination of the number of, call it AMI 1.0 meters that are still in the process of being deployed in the U.S., and then comparing that to the increasing number of next-generation metering capabilities that are coming into the market. That's where the refresh and/or automation of the balance of meters that haven't yet been migrated to a smart system. I refer folks to slide six in our IR deck and the Northeast Group's research.
I've got that slide up for you, Pete, too. Hopefully, people can see it.
Yeah. Thank you. I am sorry just to be a voice over the phone here without any participation in the video today.
It is all good. I cannot full screen it because it is impossible to then read the questions. Just bear with me, everyone. A couple for Azim. On a like- for- like basis with Q2 2025, before the new restructuring exclusion, adjusted EBITDA was approximately $ 338,000, down from $ 510,000. Why change the definition in the same quarter the charge appears, and should investors expect restructuring to recur in the second half of the year?
Thanks for the question. The restructuring charge was a one-time expenditure that flowed through operating expense, impacted operating profit, and net income. It is a one-off item that does not reflect the recurring operating cost profile of the company, and that is why we disclosed it separately.
Okay, great. I was trying to find a correlating slide, but at least we are in the financial section. Q2 was your highest revenue quarter ever and your largest operating loss in two years. What revenue level does the current cost structure provide IFRS operating income, and is that a second half of the year goal or a 2027 event?
If we look at our results for Q2, we generated an operating loss of $864,000 on revenue of $15 million. That reflects the addition of a significant number of new individuals, both on the R&D side as well as the sales and marketing side. From our perspective, those investments are expected to generate revenue, and so we expect operating loss to reduce over the coming quarters.
Okay, great. What's net revenue retention within the existing user community? What's the expected ARR contribution per activated TRUSense Gateway once a utility exits pilot? Pete, are you still there?
I am. Azim, do you want to cover that or would you like me to?
Yeah, I'll take the second part. In terms of ARR contribution, typically, when we do sell TRUSense Gateway, we have the initial contribution to hardware revenue. That activates the software license. Then, that will trigger a 22% annual maintenance, which starts in month 13. Pete, do you want to take the first one?
Yeah. I think we shared this in our filings and update between Q2 and the first six months of the year. Well over 85% of revenue came from our existing customer base, to the tune of 87% and 89% respectively. I think that's the percents that were shared. That continues to be consistent with what we've seen historically, and why book-to-bill for us is important, but not the most relevant indicator of direction and visibility. We've been very fortunate to both retain existing customers and then see those existing customers contribute materially quarter- to- quarter and period- to- period. The retention rate on our ARR, certainly as it continues to scale at the compounded annual growth rate of 19% since 2016, it's in the high, high 90th percentile.
We really do not see utilities migrate away from Tantalus, which would be the only basis for no longer paying or contributing to the recurring revenue of the business. I think two great stats that are probably not fully appreciated in terms of value in our ability to manage and drive growth in the company.
On Itron's late July call, management said its grid edge platform is expanding beyond large IOUs into munis and public power and winning both incumbent expansions and head-to-head competition. Are you seeing increased competition from Itron and/or Landis+Gyr or any other players in your core segment?
I really can't speak to the basis of what drove that comment from another company that we're not a part of. We did certainly hear the reference to public power and municipal utilities in their earnings call. The reference and examples that they used, the two utilities were LADWP and SMUD, both in Southern California. Both of those utilities are larger than most investor-owned utilities in the country. They're not regulated by the California ISO or the regulators there, but those are substantial utilities with more than 1 million endpoints per utility. As it relates, we have continued to maintain a strong working relationship with Itron. We follow the Intel inside model there, where our edge computing continues to go into the meters at their meter factory. We continue to be very effective in positioning and winning opportunities directly.
I would say more often than not, our technology is deployed with Itron meters in the field. I really cannot speak to what that basis is. I would say in terms of the number of endpoints we deploy, we certainly see more of those go with Itron meters than Aclara or Landis+Gyr, who are our other two meter integration partners. I just cannot speak to exactly what Itron was referring to. I would say as it relates to bids and opportunities that we are pursuing, I think we continue to be very effective in winning new opportunities, despite the presence of our meter partners potentially competing at the RFP level. I have not seen anything change.
Okay. That is great to hear.
I have not seen anything change in that regard relative to the statement in the question.
Okay. It sounds like maybe they are competing for some of the larger players in the muni and public power market. You are competing for some of the smaller players in the IOU market, correct?
Correct. Correct.
Okay. Just a couple left here, and I think we can wrap this up. You mentioned a TRUSense deployment ratio of between 1:1 and 1: 200, obviously based on the rate case scenarios you walked us through earlier. This is a wide range. On average, of the 37 utilities that are deploying TRUSense as of now, how many total meters have they deployed ? What would you expect this ratio to average out at?
Let me provide some broader perspective on what we mean by ratio. Within the three use cases that we have described today and hopefully continue to provide some clarity to investors and shareholders that are unfolding. When the TRUSense Gateway use case tied to enhancing, upgrading, or building out a grid modernization network, t he TRUSense Gateway is capable of reading data from up to 250 m in a surrounding area. That number varies dramatically based on the number of meters deployed within a square mile. I use mile because this is unfolding in the United States. As we get the TRUSense Gateway activated up in Canada, we can flip that to kilometer. Its meter density on a per square mile basis is the biggest barometer and data and determinant on what the ratio is.
We have initially when we were rolling out designs of communication networks with the TRUSense Gateway, we have used the reference of we never model any collector to 100% capacity. We have history of targeting in the 70% - 80% capacity range, so there is always some overhead in the event something happens in the communications network and one collector goes down. It makes sure other meters can piggyback and ultimately get data home. I would say as we continue to enhance the design of our communications networking where the TRUSense Gateway is deployed, we are actually bringing and throttling down that capacity. Even though we can read up to 250 m from one TRUSense Gateway, we are modeling closer to, depending again on meter density per square mile, up to 100 m, 150 m at the most. That is a ratio when we think about communications networking designs.
Again, the biggest swing in that number is meter density per square mile, and that varies dramatically based on utility. The second on the use case for power quality, the second ratio is a function of TRUSense Gateway to distribution transformer. There are some distribution transformers that support up to 40 homes. There are some distribution transformers that support fewer than five homes. What we are seeing predominantly in the power quality use case is utilities focused more on circuit-level visibility. From circuit-level visibility, you get to distribution transformer visibility. Over time, our anticipation is utilities will get down to, call it 40-ish to 1 meter-to-TRUSense Gateway ratio. Then, the most progressive utilities will even bring that down to an average 1:7 , 1:10 homes per pole-mounted transformer. The 1:1 ratio is where utilities want to activate behind-the-meter load control.
For every home that has devices, utilities going to control. It has to be a 1:1 ratio. One home, one meter, one TRUSense Gateway. Within the 37 utilities, the vast majority are focused on enhancing and expanding their communications network and activating power quality. The ratio, again, it varies widely based on meters per square mile.
Okay. That makes a lot of sense. One last audience question and then a couple.
Yeah, I think, Deb. Sorry, Deb, I'll extrapolate out of that a little further as well to try to give context to what probably is the basis of that question. We've shared that we've shipped now 6,200 TRUSense Gateways. To date, we've got over, I think it's close to 26,000 order of magnitude as we were going into the quarter in backlog. So we're making headway and certainly building visibility on that device being deployed over the coming quarters in the coming years.
One last audience question, and then I have a couple of my own. Hopefully, we can wrap this up. Your balance sheet has never looked better. You mentioned M&A in the past. How do you think about capital allocation right now?
Yeah. I'd say, over the past several years, the capital allocation has really been to organic R&D initiatives like the TRUSense Gateway. In that circumstance, $ 15 million use of capital, translating into what I think is going to be hundreds of million dollars of revenue opportunity for the company over the next several years as that technology really gets embraced and deployed across an increasing number of utilities and use cases. When we think about broader capital allocations, I think, and certainly with the balance sheet where it is, we have the opportunity to start thinking about accelerating our broader solution suite. When we think about new opportunities and new capabilities, we evaluate in the context of build, buy, or partner.
When it comes to M&A, I think we're in a better position today than we were a year ago, 24 months ago to really evaluate opportunities to accelerate the growth of the business if there is a strategic opportunity. I think that's where we would look to allocate capital on the balance sheet accordingly.
I think--
Azim, anything else you want to add there?
No. No, I'm good.
I think you've shown the market, since you've been public, that your capital allocation strategy works. I think you've spent $15 million on the TRUSense Gateway, and the market opportunity is massive. So good to hear you're working on some new initiatives. If anyone has a question, feel free to input it. Otherwise, I'm going to ask two and we can end this technology shit show. I guess, you've talked a little bit--
Well, not Tantalus technology.
Yeah.
Yeah.
I would not refer to a paying client as a shit show. But Zoom, which I paid for today--
No, that's good. You're here.
-- Not great. You know what, Marriott? Not happy with you either. You've talked a little bit about the Canadian strategy and the Buy Canadian Policy . You've added some really strong Board members in Canada. You've added a sales rep in Canada. I know you referenced on the official earnings call a little bit about your Canada strategy. Can you provide an update there? Also, I had a specific question earlier from an attendee about, have there been TRUSense deployments in Canada? How does that compare in terms of, is Canada way behind the U.S. in terms of TRUSense deployments, and are you making progress on that front?
We are excited to-- It's an interesting dynamic to be headquartered in Canada, domiciled there, and then treating Canada like it's a market for international expansion. That's the way we look at it. In conjunction with that, the first set of investments have been internal, a combination of headcount on the sales side and marketing side, as well as even at the Board of Directors. Those investments are really geared towards tracking opportunities and building awareness of the Tantalus brand and the Tantalus capabilities. That's first and foremost. The second path that we are pursuing is we do have a few longstanding customers up in Canada. Several of those utilities, much like others, in Ontario in particular, are going through a cycle to begin evaluating an upgrade of metering infrastructure. Within Measurement Canada and within some certain regulatory requirements, utilities have to reseal meters.
When utilities have to pull a meter out of the field, reseal it. Sort of run it through a process, I'll call it refurbishing and then resealing the meter, in many circumstances, that opens up the door to start evaluating other types of metering technology. The timing is coalescing for us, where that meter resealing requirement is simultaneously unfolding as we see either at the province level or by Canada. Hence the investment that we're making. We're working hard on ensuring that our longstanding customers up in Canada refresh their technology with us. The first TRUSense Gateways have been shipped up to Ontario. I can't speak on this call if they are actually deployed in the field, but that's where the first TRUSense Gateways will go. I wouldn't say that Canada is behind the U.S.
I wouldn't look at it in that capacity because each utility is so specific. We still have utilities in the U.S. that are manually reading meters. We have that in Canada, too. I think our focus is really timing of our go-to-market strategy, some incentives, and certainly a push at the federal and provincial level to influence. I think we've got a very systematic way of trying to make sure we're building awareness of what we do and how we do it. From that, I'm hopeful that a year from now we'll look back and be able to highlight some really strong case studies and build a set of customers and utilities that we're supporting up in Canada.
Well, it'd definitely be great to see the technology deployed in Canada because we need help with our grid. I guess one of the things that I think is underappreciated by the market about Tantalus is the customer diversification. You did reference it a little bit on the call, on the earnings call. Maybe you could talk about your customer concentration, j ust maybe give us a few stats there?
Thanks for giving us the opportunity to address that, Deb, to the question. We are, I think, very unique relative to our size. In the first half of 2026, the largest customer from a revenue perspective was under 5% of total revenue. When you take a step back, that is phenomenal and mitigates a typical risk profile of a smaller technology company that can be so single-threaded to one or two customers. On a broader trailing 12-month basis or looking back on a 12-month timeframe, on average, top 20 customers for us is about 30% of revenue over a period of time. I think it's up 50 customers or typically under 50%, somewhere 46%, I think, Azim, maybe you can correct me if I'm wrong on that. We see a very widespread contribution from an increasing number of customers.
That question says, "Well, where's the next big order?" The answer is, well, we've got 20 great orders over the last 12 months or so. I'd rather a CEO see a diversification of our revenue profile and hitting the singles and doubles consistently, than swinging for the grand slam. I'm a New York Yankees fan, and I've seen the bitter end of seasons when they can't hit home runs. Then, as a result, can't score runs. The way Toronto did last year as an example. I think there's opportunity for some big hits for us, but we're very much focused on what we do really well, which is continuing to build our base of business with smaller utilities that all contribute to our revenue profile and reduce risk from a day-to-day and quarter-to-quarter and year-to-year operational perspective.
When you look at the business today versus how you think investors perceive Tantalus, where do you think the biggest disconnect lies? What do you think the market is still underappreciating about the company beyond what we've discussed on the call today?
Yeah, I think we probably can cover that, Deb, with some of the questions that we've seen in real time here at the Canaccord Tech Conference, which has been a great event for us and a very busy one with meetings and requests. I think the first and foremost is this notion that we're a small player going up against large vendors on the metering side, and this notion that either we can't differentiate ourselves or we just get squashed by the big fellas. Tantalus has got over 30 years of operating history and a customer base that continues to convert new logos and is now more than 10% of our target market and growing. So I think that's the first element of people probably just-- I get it's hard to, if you're not in the industry itself, understanding where there's point of differentiation.
Where that manifests for those who I'd say are more generalist in nature, the gross profit margin is a point of differentiation. If we were the same type of solution as the bigger players in this space, our gross profit margin would be between 30% and 40%, and we'd be celebrating it. We're at 55%. That in and of itself is a different model, is a different solution. It is a different set of problems that we're trying to solve. It can be described in similar ways, but it is fundamentally a validation that we have a very differentiated approach. That's the first one. We've seen that question, especially from some of the larger funds that we've sat down with over the past 48 hours here in Boston. I think the second one is, look, we don't give guidance.
I understand investors look at a book-to-bill as the forward or leading indicator of growth. For us, our leading indicators of growth are number of utilities in our customer base and how many new logos we convert, what the growth rate is of our recurring revenue, because it is there at the start of every year, January 1st. Then the revenue contribution from our existing customers. Consistently as we scale revenue, that percent of 85% - 90% is consistent. More customers equals more visibility, equals more revenue from that customer base. That is the model that we have validated, and I don't think that's fully appreciated. Again, it's hard to really model out what the TRUSense Gateway means.
We've heard this as well, we've got one investor that we, it's a shareholder that we sat with yesterday, Deb, who was pushing it. "Where's the next big order? Where's the next big order?" The answer to that is, I'd rather have 20 utilities than one big one, because 20 utilities means we've got a much longer trajectory and tail to grow the business. But I think that's the other one is order size. Those are the big three that I consistently am seeing, Deb. You're sitting in those meetings with me, so you may be able to answer that question, too.
Yeah. I think you've covered most of it, Pete. I've been doing small cap investing in sales and IR for 20 years. I can argue valuation, I can argue growth, I could argue a bunch of different things. I can't tell investors how to value the company or what to think, but I think what we've seen over the reporting period in August from our peers. Not necessarily our direct peers on the metering side, but some of the other Canadian listed peers, is that the market's irrational. People are getting punished for positive quarters. It feels like the market is a bit disconnected now. Again, not an expert, but I think the quarter was strong, growth is strong. The balance sheet's in the best position it's ever been. Management's executed on everything that they've said that they would.
I'm biased obviously, but I think it's a great buying opportunity. I work with a bunch of different companies, and I would say that the Tantalus team has really executed on a new product launch, which is not the easiest thing to do, particularly in a space like the utility space. So I'm impressed. I think the market maybe got it wrong in the quarter, but the market's the market, so who am I to say? Again, biased. But yeah, I think you guys are on a great path. You're well capitalized to maximize growth opportunities. If anyone has additional questions, feel free to reach out to me. I'd really like to thank everyone for bearing with us through yet another technology issue with Zoom. Azim, thanks for being the literal face of the company today. I tried to save you with some presentation work.
Pete, thanks for bearing with us and dialing in. I don't know if you want to say some final comments.
Well, Deb, first and foremost, thanks as always for facilitating. Notwithstanding the technology issues, you've navigated it well, so thanks for making sure we were able to, in any capacity, be available. Secondarily, for those on the phone, thanks for allocating the time and continuing to track and follow us, particularly to those of you that are shareholders and investors in the company. I think we're in a really good spot. When I think about where Tantalus is today versus where it was 12 months ago, I'd also just thank the team for continued focus on executing on the plan and supporting our customer base. We'll look forward to continuing to provide updates. I think to the extent of further questions, Azim and I do everything we can to make ourselves available to help those evaluating our company.
We'll look forward to an update in a few months as we get through Q3.
All right. Well, thanks. For the audience participants, I have to think through whether we actually edit this video and publish it. Obviously not the most compelling visual webinar, but I also want to make information available. If you have anyone else that is looking for the video or whatever, definitely send them my way and I can provide a transcript at the minimum. Let me just think through the compliance issues with posting versus not posting. I appreciate everyone's time and questions. I hope you all have a good afternoon.