Enghouse Systems (ENGH) Q1 2025 earnings summary

Executive summary

• Revenue grew 2.9% year-over-year to $124.0 million in Q1 FY25, with recurring revenue up 4.0% to $87.9 million, now 70.9% of total revenue.

• Net income increased 20.8% to $21.9 million ($0.40 per diluted share), up from $18.1 million ($0.33 per diluted share) year-over-year.

• Adjusted EBITDA was $33.1 million, down 4.7% year-over-year, with a margin of 26.7%.

• Cash and investments at quarter-end totaled $271.1 million, up 9.6% from Q1 FY24.

• Focus remains on profitability, positive cash flow, and maintaining a strong cash position with no external debt.

Financial highlights

• Cash flow from operating activities (excluding working capital changes) was $37.7 million, up from $35.6 million year-over-year.

• Operating expenses rose 4.9% to $48.5 million.

• Returned $14.4 million to shareholders via dividends and repurchased $6.0 million in shares.

• Dividend per share increased by 15.4% to $0.30, marking the 17th consecutive annual increase.

• Cash and investments represented 2.2x quarterly revenue at quarter-end.

Outlook and guidance

• Strategic direction remains focused on long-term profitability and sustainability, balancing SaaS and on-premise offerings.

• Continues to pursue organic growth and selective acquisitions, targeting companies with $5m–$50m revenue and strong recurring revenue.

• Expect improvement in profitability for recent acquisitions in future quarters.

• Annual dividend increased for the 17th consecutive year.

• Strong cash position supports continued acquisitions and shareholder returns.