Enghouse Systems (ENGH) investor relations material

Executive summary

• Q2 2026 revenue was $114.3 million, down 8.4% year-over-year, with YTD revenue at $234.4 million, down 5.8%.

• Net income for Q2 rose 21% to $16.3 million, and adjusted EBITDA was $26.5 million (23.2% margin), down 7.3% year-over-year.

• Recurring revenue comprised 69.3% of Q2 total, reflecting a shift toward SaaS and maintenance services.

• Cost discipline and operational efficiency drove a 13.5% reduction in operating expenses year-over-year.

• Cash and investments at period end totaled $269.7 million, with no external debt.

Financial highlights

• SaaS and Maintenance revenue dropped 8.1% year-over-year in Q2 FY26 to $79.2 million, with recurring revenue stable as a proportion of total.

• Net cash from operating activities (excluding working capital and taxes) increased 12.3% to $28.7 million in Q2.

• Basic and diluted EPS for Q2 were $0.30, up from $0.24 year-over-year.

• Dividend per share increased 15.4% year-over-year to $0.30 for Q2 FY26.

• Cash spent on acquisitions in Q2 FY26 was $1.5 million, a 94.4% decrease year-over-year.

Outlook and guidance

• Management expects further benefits from cost alignment initiatives as they annualize.

• Focus remains on maintaining margins, cash generation, and flexibility for investments and acquisitions.

• Acquisition strategy targets companies with $5 million–$50 million revenue, strong recurring revenue, and high barriers to entry.

• Market caution and customer hesitancy are expected to persist, especially among SMBs.

• Strong liquidity and a diversified business model position the company to navigate ongoing uncertainty.