Tidewell: Q3 2026 board update
Chapter 1The quarter
Q3 2026 board update
A quarter of real growth and one honest miss.Real growth, one honest miss.
Tidewell ended September at $48.6M ARR, $1.4M short of plan. This update covers why, what we are fixing, and the two decisions we need today.
Tidewell builds field-service software for water and power utilities. This is the board update for the third quarter of 2026. Annual recurring revenue ended September at $48.6M, which is $1.4M short of plan. The next slides explain why that happened, how the rest of the business performed, and the two decisions the board is asked to make today.
So start with the number and the gap to plan
The quarter in one sentence
ARR grew 10% to $48.6M and finished $1.4M short of plan.ARR hit $48.6M, short of plan.
Take out that one slip and every other line was at or above plan.
- ARR at September 30
- $44.1M→$48.6M$48.6M
- Plan was $50.0M
- Net new ARR in the quarter
- +$4.5M = $48.6M − $44.1M
- Gap to plan
- −$1.4M = $48.6M − $50M
- One deal, signed October 6
Annual recurring revenue reached $48.6M at the end of September, up from $44.1M at the end of June. That is $4.5M of net new ARR, or growth of 10% in the quarter. The plan called for $50.0M, so we are $1.4M short. The whole gap is one contract, signed six days after the quarter closed.
And the curve behind it is steep
Growth
ARR is up a third in a year and finished just under the plan line.ARR up a third in a year.
| Category | ARR, $M | Plan |
|---|---|---|
| Q3 2025 | $36.4 | |
| Q4 2025 | $39.2 | |
| Q1 2026 | $41.7 | |
| Q2 2026 | $44.1 | $44.1 |
| Q3 2026 | $48.6 | $50 |
Quarter-end ARR in $ millions, from company records. Plan from the FY26 operating plan.
- ARR today
- $36.4M→$48.6M$48.6M
- Growth in the quarter
- +10.2% = ($48.6M − $44.1M) ÷ $44.1M
- Growth the plan needed
- +13.4% = ($50M − $44.1M) ÷ $44.1M
Annual recurring revenue has grown from $36.4M a year ago to $48.6M today, up a third. In the third quarter it grew 10.2%, while the plan needed 13.4%. The chart starts at zero, so the slope you see is the real slope, and the dashed line shows where the plan expected us to land.
But three lines beat plan, so the miss is narrow
Where we are ahead
Retention, margin and burn all beat plan.Three lines beat plan.
- Net revenue retention
- 112%
- Plan: 110%
- Up: +2 pts vs plan
- Gross margin
- 79%
- Plan: 78%
- Up: +1 pt vs plan
- Net burn per month
- $1.3M
- Plan: $1.5M
- Down: −$0.2M vs plan
Three of the lines we watch most closely beat plan. Net revenue retention was 112% against a plan of 110%, so existing customers are spending more every year. Gross margin was 79% against 78%. And net burn was $1.3M a month against a plan of $1.5M.
So here is where the quarter’s ARR came from
Chapter 2What happened
The ARR bridge
Net new ARR was $4.5M after $1.1M of losses.Net new ARR: $4.5M.
- 44.1ARR at June 30
- +plus
- 3.2New logos
- +plus
- 2.4Expansion
- −minus
- 1.1Churn and contraction
- =equals
- 48.6ARR at September 30
Figures in $ millions. Net new ARR was $4.5M, up 10.2% on the quarter. The churn detail is one card away if you want it.
Start with $44.1M of ARR at the end of June. New customers added $3.2M and existing customers expanded by $2.4M. Churn and contraction took back $1.1M. That leaves $48.6M at the end of September, which is $4.5M of net new ARR and still $1.4M below the plan of $50.0M.
Go deeper
Churn was two customers, and neither left for a competitor.Two customers, no competitor.
- 01
Churn, $0.7M: one municipal customer merged into a neighbour’s system
- 02
Contraction, $0.4M: one regional utility cut seats during a budget freeze
- 03
Competitors: neither customer chose another vendor
But one deal slipped past quarter-end
What went wrong
Weak demand One deal caused the whole miss.One deal caused it.
Marlow County Water’s $1.4M contract was due by September 30. A longer security review, legal redlines and a moved board vote pushed signature to October 6.
- Security review runs long
- Legal redlines
- Board vote moves
The miss was not weak demand. A $1.4M contract with Marlow County Water was planned for signature by September 30. A longer security review, legal redlines and a rescheduled board vote pushed it to October 6, six days after the quarter closed. Counting that contract, ARR would have landed exactly on plan.
We were ready to sign in September. Our board vote moved; our decision didn’t.
The contract was signed on October 6 and counts toward fourth-quarter ARR.
So what else could slip, and who owns it
Risks
Q4 has three risks, and each has an owner.Three risks, each with an owner.
What could cost us Q4
- Council votes slip again: $2.7M of Q4 pipeline
- Hiring stays behind plan: roadmap slips a quarter
- One customer is 11% of ARR: $5.3M renews in Q1
What we are doing, and who owns it
- Security pack pre-approved. Owner: CRO
- Four hires pulled forward. Owner: CTO
- Multi-year renewal talks open now. Owner: CEO
Three risks could cost us the fourth-quarter plan. Three council votes may slip again, putting $2.7M of pipeline at risk, and the security pack is now pre-approved. Hiring is behind plan, which could slip the roadmap by a quarter, so we want to pull four hires forward. And one customer is 11% of ARR, with $5.3M up for renewal in the first quarter.
And we can absorb a slip: cash is strong
Chapter 3What is next
Cash and hiring
Cash covers 24 months at today’s burn, but hiring is behind.Cash lasts 24 months.
- Months of runway at today’s burn
- 24 = $31.2M ÷ $1.3M
- $31.2M cash ÷ $1.3M net burn a month
- Cash at September 30
- $31.2M
- Engineering hires vs plan
- 61% = 11 ÷ 18
- 11 of 18 planned hires
We ended September with $31.2M in cash. At a net burn of $1.3M a month, that is 24 months of runway. The line we are behind on is hiring: 11 of the 18 engineering hires in the plan are in seat, which is 61%. Seven roles are still open.
So here is the road to the year-end target
Next quarter
Q4 needs 10% growth and Q3 delivered 10.2%.Q4 needs 10% growth.
We start Q4 at $50.0M once the Marlow County contract is counted, and need $55.0M by December 31.
- Completed: Marlow County signs. $1.4M counts in the Q4 total
- Upcoming: Three council votes. $2.7M of pipeline decides
- Upcoming: Four engineers start. Hires pulled forward from Q1
- Upcoming: Exit Q4 at $55.0M. The year-end ARR target
With the Marlow County contract counted, we start the fourth quarter at $50.0M and need to reach $55.0M by December 31. That is 10% growth, almost exactly what we delivered in the third quarter. The path has four dates: the contract signed on October 6, three council votes in November, four engineers starting on December 15, and the year-end target.
So two decisions would protect it
Decisions today
Two asks: fund four hires now and introduce us to two CFOs.Two asks of the board.
- To land four engineers by Dec 15
- $900K
And two introductions to utility CFOs who will take a reference call before the November council votes.
We are asking the board for two things. First, approve $900K of added fourth-quarter spend on recruiters and sign-on bonuses so four more engineers start by December 15. Second, introduce us to two utility CFOs who will take a reference call before the November council votes.