Welcome back, everyone. We have an update from INEO Tech Corp., trades on the TSXV under the ticker INEO, and on the OTCQB under INEOF. They build connected entrance infrastructure for modern retail, which combines Electronic Article Surveillance, digital display screens, edge processing, and cloud-based services into one managed front-of-store system. Happy to welcome Kyle Hall, CEO. Kyle, whenever you're ready, give us your update today.
Great. Thank you, Anna. Hope you and the doggies. Just a quick start. Thanks everybody for joining us today. Just a quick update based on Dean there, presenting a few, I don't know, it was a month or so, two ago now. What's happened since then? We recorded our Q4 revenue numbers. We had a preliminary announcement for our last presentation, but we reported the audited year-end numbers, and we came in over CAD 1 million in revenue. Adjusted EBITDA was negative CAD 252,000 for the quarter. Since then, we've closed our September quarter. We have not done the official release of the financials yet, but did a preliminary announcement just to get the directionality out there, and we hit over CAD 1.3 million in revenue, and we're nearing break even on an Adjusted EBITDA basis. So we're very proud of these numbers.
We told everybody where we're going, what we're doing, and we're hitting our quarters, and it's moving quite nicely. That's opposed to where our market cap is sitting today, and I'll get into this a little bit more, but our revenue run rate is over CAD 5 million. We're still growing on quarters. We expect to do a bit more than that, but our market cap's been kind of just sitting there. Up a little bit in the last week, but we do believe that once the world knows what we're doing, we can effect some change here. Just a quick update for people that maybe are on the first call with us. We provide entrance infrastructure, basically replace those antiquated loss prevention systems at the front entrance retail stores.
40 years of innovation by the companies that do that, and they put a system out there that when it detects a tag or a label on a product that hasn't been paid for, they beep. That's all they do. These things beep. They're not connected. They don't give the retailer any data. They don't tell them when they go off, how many times they go off, and furthermore, they do not do anything to extend the retailer's business. Retailers have put advertising on these things. They hang cardboard sleeves over them because they're the first thing they see as they enter, the last thing they see as they leave. They try to dress them up a bit. We've created a system that has a digital sign inside of it.
The industry said you couldn't do that it generates too much electromagnetic noise, that the system wouldn't work and wouldn't be able to detect the tag. We figured out a way to do that, and we have patented this. Patents issued in the U.S., Canada, Europe. There's a lot of features of these systems that gives the retailer a lot of things that they can do with their business and helps them operationally run their business, helps on the loss prevention side, and allows them to make money on the advertising side. It's quite a simple concept, really. Put a digital sign inside of a loss prevention system that owns that space at the front entrance of the retail store that everybody has to walk by as they enter the store, but it's actually a hard thing to do, and that's why nobody else has really done it.
One, we've got patents now, but two, we've built a whole ecosystem around it on the content management system, tied into the retailer's content management systems, tied into their enterprise operation system so they can ingest the data. There's a lot of things that we do for the retailers that make this a really solid part of their ongoing business. Because of that, it allows INEO to generate some very good revenue streams. Obviously, we sell the hardware, the systems, for a good margin, but we do this under the model of a recurring subscription fee, where the retailer pays a monthly fee, but they get all of that capabilities off the systems that they wouldn't otherwise had.
The data from the loss prevention, the video from the loss prevention, the analytics from the foot count, the footfall of people entering the store, the content management of tying into so that they can actually control the screen and run the advertising on the systems. For that integration, we charge a monthly fee, but the retailer's selling advertising, so we're actually making money on top of this, and it allows them to pay for that fee. Commercial validation, we're pushing ahead on our U.K. pharmacy retailer, it is just lighting it up right now in terms of the number of systems that are going into those stores. They've been doing really well. They have 10,000 of those legacy systems that we're marching towards replacing. Our target is 2,000 systems by June 30th, which is our year-end.
That alone will give us a recurring revenue number in the CAD 2.5 million range. We get any kind of logical valuation to that tied together with our revenue growth and hitting profitability, again, that market cap should not become an issue in the future. Our market that we're going after obviously is larger than this. There's so many of these loss prevention systems out there and so many retailers for opportunity, but the customers that we have under contract, that we have agreements with, that we're installing with today, have 12,000 systems. The one alone has 10,000. We're targeting 2,000 for next year. We're going to do 2,000 systems in this next year. Possibly we'll do more. Over the rollout of those, that will deliver us CAD 12 million in annual recurring revenue, maybe more.
The customers that we have today is a meaningful part of the market, and we're going to do well with them, but we're going to win more business. There's so many retailers out there that have these systems in them. These same retailers have strong media divisions that are selling advertising online but also starting to push it down into screens in the stores. We're going to take advantage of that capability that these retailers are developing, and that the retailers are making money off the loss prevention, give the retailer good capabilities on the loss prevention side so that they can save money, and allow them to make money on the advertising screens. 700,000 of these legacy systems at minimum. There's more than that, but that's the target market that we're going after.
There's so much runway for us on these, and the incumbent providers are still offering a system that beeps. That's all they do. Priorities, watch where we're going on this. Customer orders that we have, shipments or deployments. As we deploy these systems, obviously we get the upfront money for the hardware, but we get the monthly recurring subscription fee over the life of the contract. We'll start reporting more on the recurring revenue. We've now shown where we're going on the revenue side. We're going on the Adjusted EBITDA, but we'll start reporting on the recurring revenue in future quarters. What do you want to watch? Watch that revenue growth, our progress towards our profitability, and we've been reporting our quarter-end backlog and conversion numbers. All good metrics for you to watch to keep on the health of what our trajectory is.
Just to cap it off, these are the numbers. We're hitting them. We're doing this. The model is working. Technology's long since proven. Patents are solid, and we're hitting our revenue numbers now. I'll skip over these because we want to have a little bit of time. But with that, any questions that we might have floated in?
Yes. Thank you, Kyle. We do have a few questions with the time left. You previously outlined a target of approximately 2,000 additional system deployments during fiscal year 2027. With roughly 600 systems installed at the beginning of the year, how many are currently under firm purchase orders versus anticipated customer rollouts?
Yeah. We have in the neighborhood of 800 systems in market today. We expect to have that full 2,000. We have not disclosed the orders we have in hand at the moment, any kind of public number. We will probably do that in a future disclosure here, but we are confident on that 2,000 number for the fiscal year.
Great, and I will let you close with this. As your installed base grows from hundreds to thousands of systems, what percentage of total revenue could eventually become recurring, and how much higher could company-wide gross margins become?
Yeah. Our hardware revenue obviously is spiking right now because they are upfront, but as those installs go in, you are right, the recurring revenue is going to pick up. It will gradually go to where two and a half, three years from now, it will be over 50% of the revenue, and of course, it will probably be about 90% of the profit of the company.
Perfect. Well, thank you so much. Kyle, do you have any closing remarks for your quick update today?
We're just going to keep it in these quarters, everyone. We appreciate you following us. There's a lot of information on the website if you want to go check it out, and thank you for interest in INEO.
Wonderful. Thank you so much for joining us, and we look forward to seeing you again either before the end of the year or into the new year. All right, everyone.
Thank you.
We'll be right back.