Quarterhill (QTRH) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $33.9 million, reflecting ongoing business transformation, seasonally slow performance, and negative impact from two legacy tolling contracts under renegotiation.

• Adjusted EBITDA was negative $3.4 million, compared to $0.2 million in Q1 2024, mainly due to $3.2 million impact from two tolling contracts.

• Net loss widened to $8.4 million, or $0.07 per diluted share, from $4.2 million, or $0.04 per share, year-over-year.

• Strategic initiatives advanced, including new technology architecture, leadership onboarding, and expansion into new markets.

• Contracted revenue backlog at quarter-end was $476 million, providing strong visibility for future periods.

Financial highlights

• Q1 revenue was $33.9 million, down $1 million year-over-year due to project timing and seasonal factors.

• Gross margin was 12%, down from 18-20% in Q1 last year, mainly due to poor margins on two tolling projects.

• Adjusted EBITDA was negative $3.4 million in Q1 2025 vs. positive $0.2 million in Q1 2024; excluding the two contracts, adjusted EBITDA would have been negative $0.2 million.

• Cash and cash equivalents at quarter-end were $26.1 million, down from $31.9 million at year-end 2024.

• Adjusted working capital stood at $59.8 million at March 31, 2025.

Outlook and guidance

• Focus remains on revenue growth, margin improvement, and positive cash flow as contract renegotiations are resolved.

• Expectation for adjusted EBITDA growth in 2025, driven by steady enforcement unit results and improved tolling performance.

• Backlog includes a large portion of higher-margin contracted maintenance revenue, expected to drive better margins in 2025 and beyond.

• Active sales pipeline of $2 billion, with $575 million weighted as high-probability opportunities.

• A $3.2 million dividend from WiLAN received after quarter-end will positively impact Q2 2025 cash position.