Data Communications Management (TSX:DCM) Q3 2024 Earnings Call

0:00 Hello everyone, we just released our Q3 results and in this video I'll discuss our performance in the quarter, recap our financial results and review our priorities for the rest of the year and into 2025. Our focus in the third quarter and throughout this year has been on building a strong platform for profitable growth following last year's acquisition of Moore Canada. During the quarter, we made progress on several fronts in support of that goal. Our commercial team recorded several new business wins as we continue to strengthen our presence in key industry verticals including financial services, healthcare, hospitality, and transportation. We continue to deliver on our commitment to driving margin improvements across the business, supported by our focus on strategic revenue management.

0:51 Finally, we continue to enhance our product mix with new additions to our growing tech stack. We launched Assemble, our fully AI-enabled digital asset management platform, during the third quarter. And just last week, we announced the acquisition of Xavi, a marketing technology business that helps companies analyze and optimize their social media performance. Turning to our financial results in the quarter, here are the key takeaways. Our Q3 revenue was $108.7 million, down 11.4% versus the prior year. This is lower than our expectations due mainly to reduced spending by some of our large enterprise clients and decisions we made to exit certain lower margin accounts. Gross profit was $28 million. Our gross margin for the quarter was up 1.1 percentage points to 25.8%, another year-over-year improvement that keeps us on track to return our gross margin to the 30% range. Adjusted EBITDA improved 6.6% to $12.6 million or 11.6% of revenues. This marks further progress towards our goal of growing adjusted EBITDA margins to more than 14%.

2:04 Turning to our top three priorities, we remain focused on the following in the final months of 2024 and moving into 2025. First, complete the integration of MCC, including consolidating our plant network, integrating legacy MCC systems, and completing our restructuring actions. Second, drive improvements in our gross margin with a focus on enhancing profit margins in the legacy MCC business. And third, leverage our larger scale, our expanded product mix, and the skills and capabilities of our combined team to drive profitable growth as we complete the year and move into 2025. Finally, I want to extend my thanks to the DCM team for your contributions in the quarter and your continued focus on delivering results.

2:52 I look forward to reporting on our progress in future quarters. Thank you.