Enghouse Systems (ENGH) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue was $124.8 million, down 0.8% year-over-year, with year-to-date revenue up 1% to $248.8 million.

• Recurring revenue increased 1.4% to $86.2 million, now 69.1% of total revenue; six-month recurring revenue up 2.7%.

• Adjusted EBITDA for Q2 was $28.6 million (22.9% margin), down from $35.7 million (28.4% margin) in Q2 2024; YTD Adjusted EBITDA fell 12.4% to $61.7 million.

• Net income for Q2 was $13.5 million ($0.24 per diluted share), down from $20 million ($0.36 per share) last year; YTD net income was $35.4 million, down 7.2%.

• The company remains focused on operational efficiency, disciplined execution, and integrating recent acquisitions amid macroeconomic uncertainty.

Financial highlights

• Operating cash flow before working capital and tax was $25.5 million for Q2; YTD $63.3 million.

• Ended the quarter with $263.5 million in cash, cash equivalents, and short-term investments, with no external debt.

• Returned $14.3 million to shareholders via dividends and invested $26.8 million in acquisitions during the quarter; YTD $33.4 million spent on acquisitions and $28.7 million on dividends.

• Dividend per share increased 18.2% year-over-year to $0.26 for Q2 FY25; board approved a quarterly dividend of $0.30 per share, payable August 29, 2025.

Outlook and guidance

• Management expects recent acquisitions to contribute more to revenue and operating income in the next quarter.

• Cost optimization and resource alignment are underway to support margin expansion and long-term growth.

• The company continues a dual growth strategy of organic expansion and acquisitions, targeting $5 million–$50 million revenue companies with strong recurring revenue.

• Focus on mission-critical, high-barrier solutions and cash-on-cash payback within 5–7 years.

• Demand-side hesitancy and delayed capital investment decisions from customers persist.