Enghouse Releases Third Quarter Results

About this update from Enghouse Systems Limited

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BORDER-TOP:black 1pt; BORDER-RIGHT:black 1pt; BORDER-BOTTOM:black 3PT double; BORDER-LEFT:black 1pt } .prngen63{ PADDING-RIGHT:0.33em; PADDING-LEFT:0.17em; VERTICAL-ALIGN: BOTTOM; BORDER-TOP:black 1pt; BORDER-RIGHT:black 1pt; BORDER-BOTTOM:black 0.5pt solid; BORDER-LEFT:black 1pt } .prngen61{ PADDING-RIGHT:0.33em; PADDING-LEFT:0.17em; VERTICAL-ALIGN: BOTTOM; BORDER-TOP:black 0.5pt solid; BORDER-RIGHT:black 1pt; BORDER-BOTTOM:black 0.5pt solid; BORDER-LEFT:black 1pt } .prnvat{ VERTICAL-ALIGN: TOP } .prnrbrb1{ BORDER-RIGHT:black 1pt } .prnbsbls{ BORDER-LEFT:black 0.5pt solid } .prntac{ TEXT-ALIGN: CENTER } .prnml4{ MARGIN-TOP:0em; MARGIN-RIGHT:0em; MARGIN-BOTTOM:0em; MARGIN-LEFT:0.33em !IMPORTANT } .prnsbbb0{ BORDER-BOTTOM:black 0pt } .prnpl2{ PADDING-LEFT:0.17em } .prnbrbrs{ BORDER-RIGHT:black 0.5pt solid } .prnbbbs{ BORDER-BOTTOM:black 0.5pt solid } .prntar{ TEXT-ALIGN: RIGHT } .prnsblb0{ BORDER-LEFT:black 0pt } .prnpr10{ PADDING-RIGHT:0.83em } .prnpr4{ PADDING-RIGHT:0.33em } .prnsbtb1{ BORDER-TOP:black 1pt } .prncbts{ BORDER-TOP:black 0.5pt solid } .prnrbrb0{ BORDER-RIGHT:black 0pt } .prnpr2{ PADDING-RIGHT:0.17em } .prnsblb1{ BORDER-LEFT:black 1pt } .prnbcc{ BORDER-COLLAPSE: COLLAPSE; BORDER-TOP:1pt black; BORDER-RIGHT:1pt black; BORDER-BOTTOM:1pt black; BORDER-LEFT:1pt black } .prnvam{ VERTICAL-ALIGN: MIDDLE } .prntal{ TEXT-ALIGN: LEFT } .prnvab{ VERTICAL-ALIGN: BOTTOM } .prnsbbb1{ BORDER-BOTTOM:black 1pt } .prnsbtb0{ BORDER-TOP:black 0pt } Canada NewsWire MARKHAM, ON , Sept. 4, 2025 /CNW/ - Enghouse Systems Limited (TSX: ENGH) announces third quarter (unaudited) financial results for the period ended July 31, 2025 . All figures are denominated in Canadian dollars unless otherwise indicated. Third Quarter Financial Highlights: Revenue was $125.6 million as compared to $130.5 million in Q3 2024 and for the nine-month period was $374 .4 million compared to  $376.8 million last year; Recurring revenue, which includes SaaS and maintenance services, was $87.8 million compared to $88.8 million in Q3 2024, and represents 69.9% of total revenue. For the nine-month period, recurring revenue was $261.9 million compared to $258.4 million in the prior period, an increase of 1.4%, as we continue to prioritize this revenue stream; Results from operating activities was $27.3 million compared to $34.3 million in Q3 2024 and decreased for the nine-month period to $83.3 million from $100.4 million in the comparable period; Net income was $17.2 million compared to $20.6 million in Q3 2024 and $52.5 million year-to-date compared to $58.7 million last year; Adjusted EBITDA was $32.3 million compared to $37.7 million in Q3 2024, while achieving a 25.7% margin. Year to date Adjusted EBITDA was $93.9 million compared to $108.2 million in the prior year; Net cash provided by operating activities, excluding changes in working capital and income taxes paid, was $30 .9 million compared to $37 .4 million in Q3 2024 and $94 .2 million year-to-date compared to $111 .5 million in the comparable period. Cash, cash equivalents and short-term investments were $271.6 million as at July 31, 2025 . In the third quarter, despite ongoing macroeconomic uncertainty and a difficult market environment, Enghouse continues to deliver positive net income and cash flows provided by operating activities, supported by a large recurring revenue base, which accounted for 70% of total revenue. During the quarter, Enghouse undertook strategic measures to align costs with revenues, including operational adjustments and acquisition restructuring efforts, resulting in special charges of approximately $3.0 million . These actions were taken to improve profitability given the current market conditions. Cost management measures are expected to continue to yield benefits in the future as they take full effect. The Company reported net income of $17.2 million after including these charges. Enghouse maintains a strong balance sheet, closing the quarter with $271.6 million in cash, cash equivalents, and short-term investments, and no external debt. The Company remains well positioned to leverage these cash resources to take advantage of buying opportunities in this market that meet our acquisition criteria. Enghouse enters the final quarter of fiscal 2025 remaining focused on completing accretive acquisitions, maintaining profitability, generating positive cash flows provided by operating activities, and adapting to evolving market conditions to drive sustainable long-term growth. Quarterly dividends: Today, the Board of Directors approved an eligible quarterly dividend of $0.30 per common share, payable on November 28, 2025 , to shareholders of record at the close of business on November 14, 2025 . Enghouse Systems Limited Financial Highlights (unaudited, in thousands of Canadian dollars) For the period ended July 31 Three months Nine months 2025 2024 Var ($) Var (%) 2025 2024 Var ($) Var (%) Revenue $ 125,577 $ 130,501 (4,924) (3.8) $ 374,396 $ 376,803 (2,407) (0.6) Direct costs 45,409 45,836 (427) (0.9) 135,857 130,619 5,238 4.0 Revenue, net of direct costs $ 80,168 $ 84,665 (4,497) (5.3) $ 238,539 $ 246,184 (7,645) (3.1) As a % of revenue 63.8 % 64.9 % 63.7 % 65.3 % Operating expenses 49,905 49,120 785 1.6 150,707 144,331 6,376 4.4 Special charges 3,008 1,243 1,765 142.0 4,500 1,440 3,060 212.5 Results from operating activities $ 27,255 $ 34,302 (7,047) (20.5) $ 83,332 $ 100,413 (17,081) (17.0) As a % of revenue 21.7 % 26.3 % 22.3 % 26.6 % Amortization of acquired software and customer relationships (7,032) (9,663) 2,631 27.2 (22,807) (31,183) 8,376 26.9 Foreign exchange losses (580) (1,747) 1,167 66.8 (2,233) (3,550) 1,317 37.1 Interest expense – lease obligations (132) (132) - 0.0 (391) (430) 39 9.1 Finance income 1,807 2,333 (526) (22.5) 6,024 7,296 (1,272) (17.4) Finance expenses (16) (29) 13 44.8 (43) (41) ( 2) (4.9) Other income 125 407 (282) (69.3) 1,625 513 1,112 216.8 Income before income taxes $ 21,427 $ 25,471 (4,044) (15.9) $ 65,507 $ 73,018 (7,511) (10.3) Provision for income taxes 4,254 4,891 (637) (13.0) 12,969 14,331 (1,362) (9.5) Net Income for the period $ 17,173 $ 20,580 (3,407) (16.6) $ 52,538 $ 58,687 (6,149) (10.5) Basic earnings per share 0.31 0.37 (0.06) (16.2) 0.95 1.06 (0.11) (10.4) Diluted earnings per share 0.31 0.37 (0.06) (16.2) 0.95 1.06 (0.11) (10.4) Net cash provided by operating activities 27,087 40,333 (13,246) (32.8) 85,007 100,488 (15,481) (15.4) Net cash provided by operating activities excluding changes in working capital and income taxes paid 30,894 37,363 (6,469) (17.3) 94,178 111,533 (17,355) (15.6) Adjusted EBITDA Results from operating activities 27,255 34,302 (7,047) (20.5) 83,332 100,413 (17,081) (17.0) Depreciation 594 647 (53) 8.2 1,894 1,692 202 (11.9) Depreciation of right-of-use assets 1,393 1,530 (137) 9.0 4,201 4,606 (405) 8.8 Special charges 3,008 1,243 1,765 (142.0) 4,500 1,440 3,060 (212.5) Adjusted EBITDA $ 32,250 $ 37,722 (5,472) (14.5) $ 93,927 $ 108,151 (14,224) (13.2) Adjusted EBITDA margin 25.7 % 28.9 % 25.1 % 28.7 % Adjusted EBITDA per diluted share $ 0.58 $ 0.68 (0.10) (14.7) $ 1.70 $ 1.95 (0.25) (12.8) Condensed Consolidated Interim Statements of Financial Position (in thousands of Canadian dollars) (unaudited) As at July 31, 2025 As at October 31, 2024 ASSETS Current assets: Cash and cash equivalents $ 271,481 $ 274,240 Short-term investments 101 487 Accounts receivable 85,735 92,348 Prepaid expenses and other assets 17,069 16,100 374,386 383,175 Non-current assets: Property and equipment 4,127 4,192 Right-of-use assets 10,888 11,473 Intangible assets 95,263 98,594 Goodwill 336,566 309,831 Deferred income tax assets 27,716 26,228 474,560 450,318 $ 848,946 $ 833,493 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable and accrued liabilities $ 72,096 $ 70,087 Income tax payable 5,940 5,525 Dividends payable 16,526 14,397 Provisions 2,651 1,834 Deferred revenue 115,752 114,080 Lease obligations 5,243 5,344 218,208 211,267 Non-current liabilities: Deferred income tax liabilities 12,565 10,500 Deferred revenue 7,962 8,094 Net employee defined-benefit obligation 2,463 2,081 Lease obligations 5,069 5,744 28,059 26,419 246,267 237,686 Shareholders' equity: Share capital 117,603 118,217 Contributed surplus 10,739 9,764 Retained earnings 444,943 446,748 Accumulated other comprehensive income 29,394 21,078 602,679 595,807 $ 848,946 $ 833,493 Condensed Consolidated Interim Statements of Operations and Comprehensive Income (in thousands of Canadian dollars, except per share amounts) (unaudited) Three months Nine months Periods ended July 31 2025 2024 2025 2024 Revenue Software licenses $  17,290 $  19,579 $  51,956 $  57,046 SaaS and maintenance services 87,753 88,812 261,874 258,383 Professional services 17,156 18,231 50,889 51,577 Hardware 3,378 3,879 9,677 9,797 125,577 130,501 374,396 376,803 Direct costs Software licenses 640 1,689 2,079 3,104 Services 43,410 41,696 129,338 122,178 Hardware 1,359 2,451 4,440 5,337 45,409 45,836 135,857 130,619 Revenue, net of direct costs 80,168 84,665 238,539 246,184 Operating expenses Selling, general and administrative 23,752 23,980 72,368 71,661 Research and development 24,166 22,963 72,244 66,372 Depreciation 594 647 1,894 1,692 Depreciation of right-of-use assets 1,393 1,530 4,201 4,606 Special charges 3,008 1,243 4,500 1,440 52,913 50,363 155,207 145,771 Results from operating activities 27,255 34,302 83,332 100,413 Amortization of acquired software and customer relationships (7,032) (9,663) (22,807) (31,183) Foreign exchange losses (580) (1,747) (2,233) (3,550) Interest expense – lease obligations (132) (132) (391) (430) Finance income 1,807 2,333 6,024 7,296 Finance expenses (16) (29) (43) (41) Other income 125 407 1,625 513 Income before income taxes 21,427 25,471 65,507 73,018 Provision for income taxes 4,254 4,891 12,969 14,331 Net income for the period 17,173 20,580 52,538 58,687 Item that may be subsequently reclassified to income: Cumulative translation adjustment 1,928 5,929 8,316 7,367 Other comprehensive income 1,928 5,929 8,316 7,367 Comprehensive income $  19,101 $    26,509 $  60,854 $  66,054 Earnings per share Basic $      0.31 $      0.37 $      0.95 $      1.06 Diluted $      0.31 $      0.37 $      0.95 $      1.06 Condensed Consolidated Interim Statements of Cash Flows (in thousands of Canadian dollars) (unaudited) Three months Nine months Periods ended July 31 2025 2024 2025 2024 OPERATING ACTIVITIES Net income for the period $    17,173 $    20,580 $    52,538 $    58,687 Adjustments for non-cash items Depreciation 594 647 1,894 1,692 Depreciation of right-of-use assets 1,393 1,530 4,201 4,606 Interest expense – lease obligations 132 132 391 430 Amortization of acquired software and customer relationships 7,032 9,663 22,807 31,183 Stock-based compensation expense 425 298 960 1,076 Provision for income taxes 4,254 4,891 12,969 14,331 Finance expenses and other income (109) (378) (1,582) (472) 30,894 37,363 94,178 111,533 Changes in non-cash operating working capital (700) 6,243 3,670 (246) Income taxes paid (3,107) (3,273) (12,841) (10,799) Net cash provided by operating activities 27,087 40,333 85,007 100,488 INVESTING ACTIVITIES Net purchase of property and equipment (372) (683) (1,179) (1,461) Acquisitions, net of cash acquired* - (30,854) (33,399) (43,448) Recovery of purchase consideration for prior-year acquisition - - - 171 Net cash used in investing activities (372) (31,537) (34,578) (44,738) FINANCING ACTIVITIES Issuance of share capital - 1,412 - 6,095 Normal course issuer bid share repurchases (1,579) (1,759) (7,529) (2,906) Repayment of lease obligations (1,561) (2,347) (4,770) (5,747) Dividends paid (16,547) (14,398) (45,284) (38,742) Net cash used in financing activities (19,687) (17,092) (57,583) (41,300) Impact of foreign exchange on cash and cash equivalents 1,168 3,091 4,395 3,731 In crease (decrease) in cash and cash equivalents 8,196 (5,205) (2,759) 18,181 Cash and cash equivalents - beginning of period 263,285 262,918 274,240 239,532 Cash and cash equivalents - end of period $  271,481 $  257,713 $  271,481 $  257,713 *Acquisitions are net of cash acquired of $Nil and $9,287 for the three and nine months ended July 31, 2025, and $245 and $742 for the three and nine months ended July 31, 2024, respectively. Enghouse Systems Limited Segment Reporting Information (in thousands of Canadian dollars) Three months ended July 31 2025 2024 IMG AMG Total IMG AMG Total Revenue $ 69,625 $ 55,952 $ 125,577 $ 77,522 $ 52,979 $ 130,501 Direct costs (24,822) (20,587) (45,409) (27,981) (17,855) (45,836) Revenue, net of direct costs 44,803 35,365 80,168 49,541 35,124 84,665 Operating expenses excluding special charges (22,230) (14,259) (36,489) (21,257) (14,190) (35,447) Depreciation (356) (238) (594) (389) (258) (647) Depreciation of right-of-use assets (865) (528) (1,393) (997) (533) (1,530) Segment profit $ 21,352 $ 20,340 $ 41,692 $ 26,898 $ 20,143 $ 47,041 Special charges (3,008) (1,243) Corporate and shared service expenses (11,429) (11,496) Results from operating activities $ 27,255 $ 34,302 Nine months ended July 31 2025 2024 IMG AMG Total IMG AMG Total Revenue $ 216,964 $ 157,432 $ 374,396 $ 234,189 $ 142,614 $ 376,803 Direct costs (76,346) (59,511) (135,857) (79,960) (50,659) (130,619) Revenue, net of direct costs 140,618 97,921 238,539 154,229 91,955 246,184 Operating expenses excluding special charges (68,833) (41,194) (110,027) (66,166) (37,637) (103,803) Depreciation (1,151) (743) (1,894) (1,158) (534) (1,692) Depreciation of right-of-use assets (2,701) (1,500) (4,201) (2,930) (1,676) (4,606) Segment profit $ 67,933 $ 54,484 $ 122,417 $ 83,975 $ 52,108 $ 136,083 Special charges (4,500) (1,440) Corporate and shared service expenses (34,585) (34,230) Results from operating activities $ 83,332 $ 100,413 About Enghouse Enghouse is a Canadian publicly traded company (TSX: ENGH) that provides a wide range of mission-critical vertically focused enterprise software solutions. Our core technologies are used for contact centers, video communications, virtual healthcare, education, telecommunications networks, IPTV, public safety and transit. The Company's two-pronged growth strategy to grow earnings focuses on both organic growth and acquisitions, which, to date, have been funded only through net cash provided by operating activities as the Company has no outstanding external debt financing. The Company is organized around two business segments, the Interactive Management Group ("IMG") and the Asset Management Group ("AMG") due to their unique customer segments and technology offerings. Further information about Enghouse may be obtained from the Company's website at www.enghouse.com . Conference Call and Webcast A conference call to discuss the results will be held on Friday, September 5, 2025 at 8:45 a.m. EST . To participate, please call +1-289-514-5100 or North American Toll-Free +1-800-717-1738. Confirmation code: 05742. A webcast is also available at: https://www.enghouse.com/investors.php . **** The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA as a measure of operating performance. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is calculated based on results from operating activities adjusted for depreciation of property and equipment and right-of-use assets, and special charges for acquisition related restructuring costs. Management uses Adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, foreign exchange gains and losses, other income and restructuring costs primarily related to acquisitions. SOURCE Enghouse Systems Limited View original content: http://www.newswire.ca/en/releases/archive/September2025/04/c1859.html

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