EnWave (ENW) Q3 2026 earnings summary

Executive summary

• Q3 2026 revenue rose 21% year-over-year to CAD 3.33 million, driven by a large-scale REV machine sale and strong royalty growth, particularly from BranchOut Food Inc. and MicroDried.

• Gross margin improved to 25% from 19% in Q3 2025, reflecting lower fabrication costs.

• Adjusted EBITDA loss narrowed to CAD 93,000 in Q3 2026, a significant improvement from a loss of CAD 575,000 in Q3 2025.

• Net loss from continuing operations decreased 60% year-over-year to CAD 465,000 for Q3 2026.

• Strategic focus remains on converting the commercial pipeline into equipment sales, expanding the installed base, increasing recurring royalties, and building relationships with large food companies.

Financial highlights

• Q3 2026 revenue was CAD 3.33 million, up 21% year-over-year from CAD 2.7 million in Q3 2025.

• Gross margin for Q3 2026 was 25%, up six points year-over-year; year-to-date gross margin was 30%.

• Base royalties in Q3 2026 were CAD 536,000, up 24% year-over-year, despite a one-time CAD 62,000 adjustment; normalized base royalties would have been about CAD 600,000.

• SG&A expenses, including R&D, were CAD 1.2 million, down 15% year-over-year.

• Cash and cash equivalents at quarter-end were CAD 2.5 million, with net working capital surplus of CAD 7.1 million.

Outlook and guidance

• Royalties are expected to reach CAD 3 million in fiscal 2027, double the amount collected three years ago.

• Several large-scale machine sales are in the pipeline, with decisions expected in the next few quarters.

• Expense base targeted to be reduced to about CAD 3.5 million, aiming for royalties to cover operating costs by 2027 and exceed them by 2028.

• Anticipated product launches with blue-chip CPG companies in both pet and human food sectors, primarily in North America, with some activity in Europe.

• Management highlights ongoing growth strategy through royalty-bearing licenses and technology expansion.