Vecima Reports Q1 Fiscal 2026 Results

Revenue of $71.1M; Gross Margin 42.1%; Adjusted EBITDA of $11.5M Gross Margin percentage increased 14.8% quarter-over-quarter Adjusted EBITDA increased 71% quarter-over-quarter CDS sales of $11.2M increased 55% year-over-year and 30% quarter-over-quarter Deepening engagement for Vecima's new vCMTS solution Company Website: https://vecima.com VICTORIA, British Columbia -- (Business Wire) Vecima Networks Inc. (TSX: VCM) today reported financial results for the three months ended September 30, 2025. FINANCIAL HIGHLIGHTS (Canadian dollars in millions except percentages, employees, and per share data) Q1 FY26 Q4 FY25 Q1 FY25 Revenue $71.1 $68.8 $81.9 Gross Margin 42.1% 27.3% 41.7% Net Income (Loss) $0.2 $(13.2) $2.1 Earnings (Loss) Per Share1 $0.01 $(0.54) $0.09 Adjusted Gross Margin2,3 43.9% 37.4% 42.3% Adjusted Earnings (Loss) Per Share1,2,4,5 $0.05 $(0.05) $0.12 Adjusted EBITDA2 $11.5 $6.7 $12.1 Employees 600 592 612 1) Based on weighted average number of shares outstanding. 2) Adjusted Gross Margin, Adjusted Earnings Per Share and Adjusted EBITDA do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures provided by other issuers. Starting in Q4 fiscal 2025, we have changed our definition and calculation of Adjusted EBITDA and Adjusted Earnings Per Share. For a reconciliation of Adjusted Earnings Per Share, investors should refer to Vecima’s Management’s Discussion and Analysis for the three months ended September 30, 2025. 3) Adjusted gross margin adds back the impact of a non-cash write-down of inventories to net realizable value of $1.2 million for the three months ended September 30, 2025, and $0.3 million for the three months ended September 30, 2024. 4) Adjusted earnings per share includes non-cash share-based compensation of $0.5 million or $0.02 per share for the three months ended September 30, 2025, and $0.5 million or $0.02 per share for the three months ended September 30, 2024. The non-cash share-based compensation primarily reflects certain performance-based vesting thresholds achieved under the Company’s Performance Share Unit Plan. 5) Adjusted earnings per share and Adjusted EBITDA include foreign exchange gain of $0.9 million or $0.04 per share for the three months ended September 30, 2025, and $0.5 million or $0.02 per share for the three months ended September 30, 2024. "We delivered another quarter of sequential quarterly revenue growth and paired it with significantly stronger gross margin performance as our fiscal 2026 year got off to a good start," said Sumit Kumar, Vecima’s President and Chief Executive Officer. "On the topline, Q1 sales of $71.1 million were up 3.4% compared to Q4 2025, over and above the 7.5% quarter-over-quarter increase we realized in Q4. Vecima's first quarter revenue included continued strong performance from our VBS segment and higher results from the CDS segment compared to Q4 fiscal 2025. Gross Margin and Adjusted EBITDA margin rose both year-over-year and quarter-over-quarter. The first quarter gross margin of 42.1% reflects a more favorable product mix and reduced exposure to foreign exchange volatility. This, together with disciplined cost control across our operations, resulted in strong Adjusted EBITDA of $11.5 million, a 71% increase versus Q4 fiscal 2025." "The first quarter also brought significant product achievements," added Mr. Kumar. "We made further progress commercializing our new vCMTS solutions. We continued to advance toward deployments with our lead customer, secured a second vCMTS customer win in Europe, and significantly increased vCMTS program engagements. We also benefited from continued strong uptake of our EN9000, the industry's only Generic Access Platform (GAP) Node, and saw ongoing strength in our Entra Optical platforms for fiber to the home. Additionally, we secured initial orders for our new EN3400 compact GAP node, and continued our roll out of innovative new products including the Entra Principal Core and Access Test Platform, and our new Entra Power Holdover Modules. We capped off these accomplishments with live demonstrations of multiple industry and world firsts at this year's SCTE Tech Expo, including the first-ever 50G-PON migration solution and dual downstream service group DOCSIS 4.0 technology." "In our CDS segment during the first quarter, we benefited from a greater volume of managed IPTV expansions, while also continuing to expand sales of our new Dynamic Ad Insertion (DAI) solutions." "Looking ahead, we see multiple Entra product and program launches in the VBS segment and growing demand for our IPTV and DAI solutions in the CDS segment generating an overall growth trend for the business. While we anticipate recent industry consolidation among key cable operators is likely to shift some of the demand acceleration into early fiscal 2027, our confidence in delivering solid sales volumes, expanding margins, and strong adjusted EBITDA performance in fiscal 2026 remains high." "Having built the industry's broadest and deepest portfolio of interoperable cable and fiber access products, we now have multiple growth engines driving our future as global adoption of Distributed Access Architecture (DAA) continues to build. Our innovation and significant investments in both DAA and IPTV have laid the foundation for growth and increased profitability for many years to come," concluded Mr. Kumar. Financial and Corporate Achieved first quarter consolidated sales of $71.1 million, up 3.4% compared to $68.8 million in Q4 fiscal 2025 (Q1 fiscal 2025: $81.9 million). First quarter gross margin and adjusted gross margin increased to 42.1% and 43.9%, respectively, from 41.7% and 42.3%, respectively, in Q1 fiscal 2025 and 27.3% and 37.4%, respectively, in Q4 fiscal 2025. Generated strong adjusted EBITDA of $11.5 million, compared to $12.1 million in Q1 fiscal 2025. On a sequential quarterly basis, adjusted EBITDA increased 71% from $6.7 million in Q4 fiscal 2025. Net income per share of $0.01, compared to $0.09 in Q1 fiscal 2025 and up significantly from a loss per share of $(0.54) in Q4 fiscal 2025. Ended the first quarter in a strong financial position with working capital of $53.8 million at September 30, 2025, compared to $51.2 million at June 30, 2025. Our net debt position has decreased from a high of $92.0 million in Q3 fiscal 2024 to $60.7 million in Q1 fiscal 2026. Video and Broadband Solutions (VBS) First quarter Video and Broadband Solutions segment sales of $58.0 million, compared to $72.9 million in Q1 fiscal 2025 and on par with the $58.1 million generated in Q4 fiscal 2025. DAA (Entra Family) First quarter deployments of Entra DAA products generated revenue of $55.0 million, a decrease of 19% year-over-year from the near record in Q1 fiscal 2025 and slightly higher than the $54.6 million achieved in Q4 fiscal 2025. Total customer engagements increased to 140 MSOs worldwide at quarter-end, from 123 a year earlier, with customer engagements continuing to deepen. Sixty-eight of these customers have ordered Entra products as broader DAA deployment progresses. Vecima's new vCMTS solution significantly advanced in Q1 with the lead Tier 1 customer broadening trial activity while preparing to modernize and enhance its DOCSIS network using the Entra vCMTS. Engagement with additional customers expanded considerably during the quarter and included a second customer win in the European market. Vecima's vCMTS solution is part of the Entra Cloud platform which enables operators to transform their networks for next-generation broadband access, including DOCSIS 4.0. Dell'Oro Group forecasts the global market for vCMTS will be worth approximately $350 million annually by calendar 2028. Currently, Vecima is just one of three vendors worldwide offering a vCMTS solution. Continued strong demand for the EN9000, the industry's only GAP node, as it continues to gain broad adoption with customers, widely seeding broadband networks with a future-proof platform capable of being upgraded with multiple successive generations of DOCSIS or FTTH technology. Received first orders from a Tier 1 customer for the Entra EN3400, which builds on the success of the Entra EN9000 with a compact, standardized multi-services GAP node with a unique form factor optimized for enterprise and multi-dwelling unit (MDU) applications. The EN3400 offers both line-powered and AC-powered options, as well as an assortment of RPD are R-OLT options. Deliveries to the lead customer are expected to commence in Q2 fiscal 2026. Deployed our new Entra Power Holdover Modules (PHM) in the field with our lead Tier 1 customer. Entra PHMs provide reliable protection from power fluctuations to Vecima's cable and fiber access platforms in the field and are expected to provide a significant contribution to revenues in fiscal 2026. Continued growth in the Remote MACPHY category with a network expansion with a large US Tier 2 customer. Also achieved a new customer win for a shelf-based Remote MACPHY Device in the EMEA region, with revenue expected later in the fiscal year. Demand continued to increase for Vecima's industry-leading SF-4X remote optical line terminals for FTTH across key customers. Announced that Liberty Global, one of the world's leading converged video, broadband, and communications companies, is working with Vecima's Entra Access Test Platform to advance its network innovation strategy. Purpose-built to replicate production-scale environments and streamline testing workflows, the Entra Access Test Platform leverages last year's acquisition of Falcon V and our expanding R&D capabilities across Europe to accelerate DAA deployments by ensuring customers can fully test new software in a multi-core, multi-vendor environment. Demonstrated multiple industry firsts at the 2025 SCTE Tech Expo, further entrenching Vecima's technology leadership in the global cable and fiber access market. Unveiled the industry's first-ever 50G-PON migration solution, enabling simultaneous operation of 10G-EPON and 50G ITU PON on the same optical port for maximum investment protection and simplified next-gen PON migration. Demonstrated the Entra EXS1610 All-PON Platform and vPON Manager, delivering scalable, open, and vendor-agnostic PON deployments through our Open Network Ecosystem (ONE). Showcased further advances in DOCSIS 4.0 technology, including live demonstration of the cloud-native Entra vCMTS powering the world's first Dual Downstream Service Group DOCSIS 4.0 Remote PHY device, the Entra ERM422. Commercial Video (Terrace Family) Commercial Video product sales were in line with expectations and included first quarter sales of $2.9 million (Q1 fiscal 2025: $4.5 million; Q4 fiscal 2025: $3.4 million). These results reflect the continued transition to next-generation platforms, together with some of Vecima’s newer DAA-driven Commercial Video solutions now being accounted for as part of Entra family sales. TerraceIQ Commercial Video solution continued to gain traction with customers in the Americas. Content Delivery and Storage (CDS) The Content Delivery and Storage segment grew first quarter sales to $11.2 million, up 55% from $7.2 million in Q1 fiscal 2025 and an increase of 30% from $8.6 million in Q4 fiscal 2025. Achieved strong first quarter CDS gross margin performance of 60.7%, on par with Q1 fiscal 2025 results and significantly higher than the 51.6% generated in Q4 fiscal 2025. Undertook managed IPTV expansions with multiple customers during the quarter, contributing to segment growth. Continued to expand Targeted Dynamic Ad Insertion (DAI) solutions, kicking off implementation with a key customer, while also securing Phase 2 orders. Introduced DAI Ingest Manager, streamlining the management of ad files across linear ad replacement, targeted and programmatic DAI, and programmer addressable DAI. Continued progress and development of the standards-driven MediaScale Open CDN platform. Blue Stream Fiber, Florida's fastest-growing fiber-optic telecommunication provider, announced its deployment of Vecima's KeyFrame Media Optimization Solution to enhance video quality streaming experience for its Blue Stream Fiber TV service. Telematics The Telematics segment grew first quarter sales to $1.9 million, an increase of 10% from $1.7 million in Q1 fiscal 2025, and 9% lower than the $2.1 million achieved in Q4 fiscal 2025. Completed the implementation of a large moveable asset customer with over 1,300 vehicles, adding significantly to the total subscriber count, with a total of 21,760 vehicles now being monitored. Added 14 new customers for the NERO asset tracking platform during the fourth quarter, adding 224 new subscriptions and bringing total asset tags under management to over 103,000. Achieved strong segment gross margin percentage of 67.6%. Trade and Tariffs Trade actions had a negligible impact on the 84% of Vecima's sales made to the US in Q1 fiscal 2026. The Company's manufacturing is predominantly domiciled in Canada, exempting that portion of its production from tariff actions under the United States-Mexico-Canada Agreement (USMCA). While renegotiation of the USMCA could, in an unlikely case, result in the introduction of new tariffs affecting Vecima's products, the Company is one of the few competitors in the industry that fully "owns" its manufacturing process. This provides significant flexibility to adapt quickly to changing macroeconomic conditions, including the ability to rapidly transition manufacturing to different countries as Vecima has demonstrated in the past. CONFERENCE CALL A conference call and live audio webcast will be held today, Thursday, November 13, 2026 at 1 p.m. ET to discuss the Company’s first quarter results. Vecima’s unaudited interim consolidated financial statements and management’s discussion and analysis for the three months ended September 30, 2025 are available under the Company’s profile at www.sedarplus.ca, and at https://vecima.com/investor-relations/financial-reports/. To participate in the Q1FY26 teleconference, dial 1-833-752-3965 or 1-647-849-3105. The webcast will be available in real time at https://event.choruscall.com/mediaframe/webcast.html?webcastid=SLwCUm2c and will be archived on the Vecima website at https://vecima.com/investor-relations/earnings-call-archive/. About Vecima Networks Vecima Networks Inc. (TSX: VCM) is leading the global evolution to the multi-gigabit, content-rich networks of the future. Our talented people deliver future-ready software, services, and integrated platforms that power broadband and video streaming networks, monitor and manage transportation, and transform experiences in homes, businesses, and everywhere people connect. We help our customers evolve their networks with cloud-based solutions that deliver ground-breaking speed, superior video quality, and exciting new services to their subscribers. There is power in connectivity – it enables people, businesses, and communities to grow and thrive. Learn more at www.vecima.com. Adjusted EBITDA and Adjusted Earnings (Loss) Per Share Adjusted EBITDA and Adjusted Earnings (Loss) Per Share do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures provided by other issuers. Accordingly, investors are cautioned that Adjusted EBITDA or Adjusted Earnings Per Share should not be construed as an alternative to net income, determined in accordance with IFRS, as an indicator of the Company’s financial performance or as a measure of its liquidity and cash flows. For a reconciliation of Adjusted EBITDA or Adjusted Earnings (Loss) Per Share, investors should refer to Vecima’s Management’s Discussion and Analysis for the first quarter of fiscal 2026. Forward-Looking Statements This news release contains “forward-looking information” within the meaning of applicable securities laws. Forward-looking information is generally identifiable by use of the words “believes”, “may”, “plans”, “will”, “anticipates”, “intends”, “could”, “estimates”, “expects”, “forecasts”, “projects” and similar expressions, and the negative of such expressions. Forward-looking information in this news release includes the following statements: Looking ahead, we see multiple Entra product and program launches in the VBS segment and growing demand for our IPTV and DAI solutions in the CDS segment generating an overall growth trend for the business; while we anticipate recent industry consolidation among key cable operators is likely to shift some of the demand acceleration into early fiscal 2027, our confidence in delivering solid sales volumes, expanding margins, and strong adjusted EBITDA performance in fiscal 2026 remains high; having built the industry's broadest and deepest portfolio of interoperable cable and fiber access products, we now have multiple growth engines driving our future as global adoption of Distributed Access Architecture (DAA) continues to build; our innovation and significant investments in both DAA and IPTV have laid the foundation for growth and increased profitability for many years to come. A more complete discussion of the risks and uncertainties facing Vecima is disclosed under the heading “Risk Factors” in the Company’s Annual Information Form dated September 25, 2025, as well as the Company’s continuous disclosure filings with Canadian securities regulatory authorities available at www.sedarplus.ca. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Vecima disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law. VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Financial Position (unaudited - in thousands of Canadian dollars) As at September 30, 2025 June 30, 2025 Assets     Current assets     Cash and cash equivalents $ 8,566 $ 3,441 Accounts receivable   20,069   23,916 Income tax receivable   292   1,690 Inventories   107,835   110,631 Prepaid expenses and other current assets   6,949   6,685 Contract assets   2,668   1,159 Total current assets   146,379   147,522 Non-current assets     Property, plant and equipment   11,074   10,935 Right-of-use assets   4,460   4,824 Goodwill   17,721   16,934 Intangible assets   103,871   101,610 Investment tax credits   22,356   22,157 Deferred tax assets   29,214   27,656 Other long-term assets   435   431 Total assets $ 335,510 $ 332,069 Liabilities and shareholders’ equity     Current liabilities     Revolving line of credit $ 31,748 $ 33,938 Accounts payable and accrued liabilities   36,360   37,694 Provisions   845   874 Deferred revenue   10,890   15,226 Current portion of financial liability   426   290 Current portion of long-term debt   11,006   8,336 Dividends payable   1,337   – Total current liabilities   92,612   96,358 Non-current liabilities     Provisions   498   460 Deferred revenue   1,770   1,755 Long-term debt   26,515   19,927 Total liabilities   121,395   118,500 Shareholders’ equity     Share capital   24,152   24,152 Reserves   6,483   5,966 Retained earnings   180,724   181,857 Accumulated other comprehensive income   2,756   1,594 Total shareholders’ equity   214,115   213,569 Total liabilities and shareholders’ equity $ 335,510 $ 332,069   VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Comprehensive Income (unaudited - in thousands of Canadian dollars, except per share amounts) Three months ended September 30, 2025 2024 Sales $ 71,074   $ 81,905   Cost of sales:     Cost of product and services   39,998     47,385   Write-down of inventory to net realizable value   1,171     349   Total cost of sales   41,169     47,734   Gross profit   29,905     34,171   Operating expenses     Research and development   12,132     11,624   Sales and marketing   8,807     9,442   General and administrative   6,557     7,720   Share-based compensation   517     546   Other expense (income)   (14 )   293   Total operating expenses   27,999     29,625   Operating income   1,906     4,546   Finance expense   (2,901 )   (2,373 ) Foreign exchange gain   889     508   Income (loss) before income taxes   (106 )   2,681   Income tax expense (recovery)   (310 )   536   Net income $ 204   $ 2,145   Other comprehensive income (loss)     Item that may be subsequently reclassified to net income     Exchange differences on translation of foreign operations $ 1,162   $ (912 ) Comprehensive income $ 1,366   $ 1,233   Net income per share     Basic $ 0.01   $ 0.09   Diluted $ 0.01   $ 0.09   Weighted average number of common shares     Shares outstanding – basic   24,314,594     24,311,637   Shares outstanding – diluted   24,315,495     24,381,964     VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Changes in Equity (unaudited - in thousands of Canadian dollars) Share capital Reserves   Retained earnings   Accumulated other comprehensive income (loss)   Total   Balance as at June 30, 2024 $ 24,117 $ 4,120   $ 204,968   $ 1,755   $ 234,960   Net income   –   –     2,145     –     2,145   Other comprehensive loss   –   –     –     (912 )   (912 ) Dividends   –   –     (1,337 )   –     (1,337 ) Shares issued by exercising options   12   (3 )   –     –     9   Share-based payment expense   –   546     –     –     546   Balance as at September 30, 2024 $ 24,129 $ 4,663   $ 205,776   $ 843   $ 235,411   Balance as at June 30, 2025 $ 24,152 $ 5,966   $ 181,857   $ 1,594   $ 213,569   Net income   –   –     204     –     204   Other comprehensive income   –   –     –     1,162     1,162   Dividends   –   –     (1,337 )   –     (1,337 ) Share-based payment expense   –   517     –     –     517   Balance as at September 30, 2025 $ 24,152 $ 6,483   $ 180,724   $ 2,756   $ 214,115     VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Cash Flows (unaudited - in thousands of Canadian dollars) Three months ended September 30, 2025 2024 OPERATING ACTIVITIES     Net income $ 204   $ 2,145   Adjustments for non-cash items:     Loss on sale of property, plant and equipment   12     20   Depreciation and amortization   6,908     5,570   Share-based compensation   517     546   Warrant expense   132     106   Write-down of inventory to net realizable value   1,113     512   Income tax expense   1,507     1,940   Deferred income tax recovery   (1,817 )   (1,404 ) Interest expense   2,907     2,400   Interest income   (6 )   (27 ) Net change in working capital   (1,749 )   15,653   Decrease (increase) in other long-term assets   (4 )   76   Increase in provisions   9     107   Increase in investment tax credits   (36 )   (49 ) Income tax paid   (3 )   (587 ) Interest received   6     27   Interest paid   (2,938 )   (2,587 ) Cash provided by operating activities   6,762     24,448   INVESTING ACTIVITIES     Capital expenditures, net   (844 )   (988 ) Proceeds from sale of property, plant and equipment   –     –   Deferred development costs   (7,172 )   (6,676 ) Cash used in investing activities   (8,016 )   (7,664 ) FINANCING ACTIVITIES     Net repayments from revolving line of credit   (2,190 )   (15,767 ) Principal repayments of lease liabilities   (417 )   (237 ) Repayment of short and long-term debt   (420 )   (454 ) Proceeds from short and long-term debt   10,000     –   Issuance of shares through exercised options   –     9   Cash provided by (used in) financing activities   6,973     (16,449 ) Net increase (decrease) in cash and cash equivalents   5,719     335   Effect of change in exchange rates on cash   (594 )   (251 ) Cash and cash equivalents, beginning of period   3,441     2,136   Cash and cash equivalents, end of period $ 8,566   $ 2,220     View source version on businesswire.com: https://www.businesswire.com/news/home/20251113406841/en/ Contacts: Vecima Networks Investor Relations - 250-881-1982 [email protected] Source: Vecima Networks Inc.