Shares of Elauwit Connection Inc (NASDAQ:ELWT) climbed roughly 3% on Friday after the managed services provider revealed plans to correct its financial reporting for the quarter ended September 30, 2025. The company attributed the move to an accounting error related to revenue recognition.
Elauwit, headquartered in Columbia, South Carolina, said the issue arose within the percentage-of-completion input method applied to certain network design and installation contracts. Management estimates the mistake caused revenue, gross profit, operating income and net loss to be overstated by approximately $1.4 million through the nine months ended September 30, 2025.
The company traced the error to work performed by a third-party national accounting firm that was retained before and immediately following Elauwit’s initial public offering. The inaccuracy was discovered by the company’s newly expanded internal accounting team while preparing for the full year 2025 audit. Elauwit stated the error did not affect periods prior to 2025 and that there was no intentional misconduct involved.
On Tuesday, the Audit Committee of the Board of Directors decided the company will restate the unaudited condensed consolidated financial statements included in the Quarterly Report on Form 10-Q that was filed December 10, 2025. Elauwit said it intends to file an amendment to that 10-Q as soon as reasonably practicable.
Executive Chairman Dan McDonough provided an operational context for the correction, saying the restatement does not change the company’s operations or growth strategy, nor does it alter the trend of improving revenue and operating performance from 2024 to 2025. The company continues to expand its footprint in multifamily, student housing and senior living communities, delivering broadband and property-wide WiFi network services.
The disclosure and planned amendment follow internal review work that identified the accounting entries requiring correction. While the financial overstatement is quantified at an estimated $1.4 million through nine months of 2025, the company is moving to amend its public filing to reflect corrected unaudited results.
Summary
Elauwit will restate its September 30, 2025 quarterly financials due to a percentage-of-completion revenue recognition error affecting certain network contracts, with an estimated $1.4 million overstatement through nine months of 2025; the company plans to amend its Dec. 10, 2025 Form 10-Q and says operations and growth strategy remain unchanged.
Key points
- Elauwit announced a restatement tied to percentage-of-completion accounting for network design and installation contracts, with shares rising about 3% after the news.
- The accounting error is estimated to have overstated several financial metrics by $1.4 million through the nine months ended Sept. 30, 2025.
- The company serves broadband and property-wide WiFi needs in multifamily, student housing and senior living sectors, and says the restatement does not affect its operational plans or recent performance trend.
Risks and uncertainties
- The timing and finalization of the amended 10-Q remain uncertain - Elauwit said it will file the amendment as soon as reasonably practicable.
- The financial overstatement will require corrected unaudited consolidated statements for the quarter ended Sept. 30, 2025, which may alter previously reported metrics through nine months of 2025.
- The error originated from work by a third-party national accounting firm and was discovered during an internal audit process, which may prompt further review of accounting processes and controls.