Kustom Entertainment reported 57% growth in third-quarter revenue from continuing operations, but its $2.3 million net income was driven by a gain from selling its legacy video-solutions business. The company’s continuing operations remained loss-making as it invested in customer acquisition and marketing for its TicketSmarter marketplace.
The quarter was Kustom’s first as a live-entertainment and ticketing company following the August 3 sale of the video business to Cycurion. The company also reported a stronger balance sheet than at the end of 2025.
Key details
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Revenue increased to $2.7 million, up from $1.7 million a year earlier. Service revenue rose 65% to $2.1 million, primarily on higher transaction volume at TicketSmarter. Product revenue increased 32% to $575,067, reflecting higher ticket inventory sales.
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Gross profit edged up 10% to $208,949, compared with $189,673 in the prior-year quarter. The increase was smaller than the growth in revenue.
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Net income attributable to common stockholders was $2.35 million, or $4.51 per basic and diluted share, compared with a net loss of $1.02 million a year earlier. The result included $5.02 million of income from discontinued operations, reflecting the gain on the video-business sale.
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Continuing operations posted a $2.67 million loss, or $5.13 per share, versus a $995,000 loss a year earlier. Kustom attributed about $625,000 of the increased loss to non-cash expenses for shares issued for consulting, acquisition-related costs and collaborative arrangements. The company said the remaining increase reflected customer-acquisition and marketing investment intended to grow TicketSmarter.
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Stockholders’ equity rose to $7.85 million at September 30, from $2.37 million at year-end 2025. Total liabilities fell by $9.3 million to $7.7 million.
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Cash and cash equivalents reached $1.72 million, up from $757,369 at December 31, 2025. Working capital, excluding current assets and liabilities of discontinued operations, improved by $3.2 million.
What the results show: Kustom’s reported quarterly profit does not reflect profitable performance from its ongoing business: continuing operations remained in the red, while the sale of the legacy business generated the gain that lifted overall net income. The revenue growth came alongside planned spending to expand the ticketing platform.