Evertz Technologies (ET) Q1 2027 earnings summary

Executive summary

• Q1 FY2027 revenue rose 5.5% year-over-year to CAD 118.3 million, with software and services revenue at CAD 58.9 million, representing 49.8% of total revenue.

• International revenue increased 17.5% year-over-year to CAD 38.3 million, accounting for 32% of total sales.

• Gross margin was 58.6%, totaling CAD 69.3 million, down from 61.4% in the prior year.

• Net earnings were CAD 8 million, with fully diluted EPS of CAD 0.10, both down year-over-year.

• Purchase order backlog plus August shipments exceeded CAD 289 million, reflecting strong demand and momentum.

Financial highlights

• Hardware revenue declined slightly to CAD 59.3 million, while software and services revenue grew 14% year-over-year.

• S&A expenses were CAD 19.9 million, up CAD 0.9 million year-over-year, mainly due to increased trade show and travel costs.

• R&D expenses totaled CAD 38.5 million, up CAD 1.5 million year-over-year, driven by higher salaries and patent-related fees.

• Cash from operations was CAD 0.8 million, impacted by a CAD 16 million negative change in non-cash working capital and taxes.

• US and Canada revenue was CAD 79.9 million, up 1% year-over-year.

Outlook and guidance

• Management expects healthy gross margins to continue and does not forecast a decrease.

• No material impact from tariffs is expected in the near term, with mitigation strategies in place.

• Continued investment in R&D and expansion in government and defense sectors are expected to support growth.

• Order backlog at CAD 259 million as of August 31, 2026, indicates strong future demand.

• Shipments in August 2026 totaled CAD 30 million.