Enghouse Systems (ENGH) investor relations material

Executive summary

• Q3 2026 revenue was $117.6 million (CAD 117.6 million), down 6.4% year-over-year but up sequentially from Q2, driven by improved software sales, favorable FX, and transaction timing.

• Adjusted EBITDA for Q3 2026 was $30.8 million (26.2% margin), down 4.5% year-over-year but up from Q2, reflecting profitability initiatives and cost discipline.

• Net income for Q3 2026 was $15.4 million, a 10.5% decrease year-over-year; nine-month net income was $49.2 million, down 6.4%.

• Recurring revenue accounted for 69.5% of total Q3 revenue, totaling $81.7 million.

• The business environment remains challenging due to economic caution, geopolitical tensions, and competitive pressures.

Financial highlights

• Operating expenses (excluding special charges) declined to $45.7 million in Q3, down 8.4% year-over-year.

• Operating cash flow before working capital and taxes was $28.4 million in Q3, down 7.9% year-over-year.

• Cash and equivalents at quarter-end were $267.8 million, with no external debt.

• Returned $16.9 million in dividends and $7.5 million in share repurchases during the quarter.

• SaaS and Maintenance revenue dropped 6.9% year-over-year in Q3 FY26.

Outlook and guidance

• Cost management and operational efficiency remain priorities to sustain profitability.

• Margins expected to remain in the mid-20% range due to ongoing market challenges and competitive pricing pressure.

• Restructuring benefits will phase in over coming quarters; further restructuring depends on market conditions.

• Focus remains on dual growth through internal initiatives and acquisitions, targeting companies with strong recurring revenue.

• No significant improvement in demand environment anticipated in the near term.