DATA Communications Management (DCM) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue declined 5% year-over-year to $117.4 million, in line with expectations, but positive momentum was seen toward quarter-end.

• Over 40 new clients were added, contributing $4 million in annualized revenue.

• Technology-enabled services and hardware grew 20.4% to $10 million, now 8.5% of total revenues.

• Adjusted EBITDA reached a record $19.1 million, 16.3% of revenues, up from $18.6 million and 15.0% a year ago.

• Adjusted net income increased 11% to $5.8 million, with a margin of 4.9%.

Financial highlights

• Revenue for Q1 2026 was $117.4 million, down 5% from $123.7 million in Q1 2025.

• Gross profit was $33.1 million, with a margin of 28.2%, down from 29.3% in Q1 2025.

• SG&A expenses decreased by $3.7 million to $19.8 million, now 16.9% of revenues.

• Free cash flow improved to $10.7 million from negative $7.4 million a year ago.

• Adjusted EPS (basic) rose 22% to $0.11 from $0.09 year-over-year.

Outlook and guidance

• Early signs of market stabilization, with most business units returning to growth.

• Focus remains on new business development, gross margin improvement, operational efficiencies, digital acceleration, and strong cash flow.

• Management anticipates continued external uncertainty due to trade policy, geopolitical unrest, and potential labor disruptions at Canada Post.