Original News Release
Enghouse Releases Third Quarter Results
Enghouse Releases Third Quarter Results
Canada NewsWire
MARKHAM, ON, Sept. 4, 2025
MARKHAM, ON, Sept. 4, 2025 /CNW/ - Enghouse Systems Limited (TSX: ENGH) announces third quarter (unaudited) financial results for the period ended July 31, 2025. All figures are denominated in Canadian dollars unless otherwise indicated.
Third Quarter Financial Highlights:
Revenue was $125.6 million as compared to $130.5 million in Q3 2024 and for the nine-month period was $374.4 million compared to $376.8 million last year;
Recurring revenue, which includes SaaS and maintenance services, was $87.8 million compared to $88.8 million in Q3 2024, and represents 69.9% of total revenue. For the nine-month period, recurring revenue was $261.9 million compared to $258.4 million in the prior period, an increase of 1.4%, as we continue to prioritize this revenue stream;
Results from operating activities was $27.3 million compared to $34.3 million in Q3 2024 and decreased for the nine-month period to $83.3 million from $100.4 million in the comparable period;
Net income was $17.2 million compared to $20.6 million in Q3 2024 and $52.5 million year-to-date compared to $58.7 million last year;
Adjusted EBITDA was $32.3 million compared to $37.7 million in Q3 2024, while achieving a 25.7% margin. Year to date Adjusted EBITDA was $93.9 million compared to $108.2 million in the prior year;
Net cash provided by operating activities, excluding changes in working capital and income taxes paid, was $30.9 million compared to $37.4 million in Q3 2024 and $94.2 million year-to-date compared to $111.5 million in the comparable period. Cash, cash equivalents and short-term investments were $271.6 million as at July 31, 2025.
In the third quarter, despite ongoing macroeconomic uncertainty and a difficult market environment, Enghouse continues to deliver positive net income and cash flows provided by operating activities, supported by a large recurring revenue base, which accounted for 70% of total revenue.
During the quarter, Enghouse undertook strategic measures to align costs with revenues, including operational adjustments and acquisition restructuring efforts, resulting in special charges of approximately $3.0 million. These actions were taken to improve profitability given the current market conditions. Cost management measures are expected to continue to yield benefits in the future as they take full effect. The Company reported net income of $17.2 million after including these charges.
Enghouse maintains a strong balance sheet, closing the quarter with $271.6 million in cash, cash equivalents, and short-term investments, and no external debt. The Company remains well positioned to leverage these cash resources to take advantage of buying opportunities in this market that meet our acquisition criteria. Enghouse enters the final quarter of fiscal 2025 remaining focused on completing accretive acquisitions, maintaining profitability, generating positive cash flows provided by operating activities, and adapting to evolving market conditions to drive sustainable long-term growth.
Quarterly dividends:
Today, the Board of Directors approved an eligible quarterly dividend of $0.30 per common share, payable on November 28, 2025, to shareholders of record at the close of business on November 14, 2025.
Enghouse Systems Limited
Financial Highlights
(unaudited, in thousands of Canadian dollars)
For the period ended July 31
Three months
Nine months
2025
2024
Var ($)
Var (%)
2025
2024
Var ($)
Var (%)
Revenue
$
125,577
$
130,501
(4,924)
(3.8)
$
374,396
$
376,803
(2,407)
(0.6)
Direct costs
45,409
45,836
(427)
(0.9)
135,857
130,619
5,238
4.0
Revenue, net of direct costs
$
80,168
$
84,665
(4,497)
(5.3)
$
238,539
$
246,184
(7,645)
(3.1)
As a % of revenue
63.8 %
64.9 %
63.7 %
65.3 %
Operating expenses
49,905
49,120
785
1.6
150,707
144,331
6,376
4.4
Special charges
3,008
1,243
1,765
142.0
4,500
1,440
3,060
212.5
Results from operating activities
$
27,255
$
34,302
(7,047)
(20.5)
$
83,332
$
100,413
(17,081)
(17.0)
As a % of revenue
21.7 %
26.3 %
22.3 %
26.6 %
Amortization of acquired software and customer relationships
(7,032)
(9,663)
2,631
27.2
(22,807)
(31,183)
8,376
26.9
Foreign exchange losses
(580)
(1,747)
1,167
66.8
(2,233)
(3,550)
1,317
37.1
Interest expense – lease obligations
(132)
(132)
-
0.0
(391)
(430)
39
9.1
Finance income
1,807
2,333
(526)
(22.5)
6,024
7,296
(1,272)
(17.4)
Finance expenses
(16)
(29)
13
44.8
(43)
(41)
( 2)
(4.9)
Other income
125
407
(282)
(69.3)
1,625
513
1,112
216.8
Income before income taxes
$
21,427
$
25,471
(4,044)
(15.9)
$
65,507
$
73,018
(7,511)
(10.3)
Provision for income taxes
4,254
4,891
(637)
(13.0)
12,969
14,331
(1,362)
(9.5)
Net Income for the period
$
17,173
$
20,580
(3,407)
(16.6)
$
52,538
$
58,687
(6,149)
(10.5)
Basic earnings per share
0.31
0.37
(0.06)
(16.2)
0.95
1.06
(0.11)
(10.4)
Diluted earnings per share
0.31
0.37
(0.06)
(16.2)
0.95
1.06
(0.11)
(10.4)
Net cash provided by operating activities
27,087
40,333
(13,246)
(32.8)
85,007
100,488
(15,481)
(15.4)
Net cash provided by operating activities excluding changes in working capital and income taxes paid
30,894
37,363
(6,469)
(17.3)
94,178
111,533
(17,355)
(15.6)
Adjusted EBITDA
Results from operating activities
27,255
34,302
(7,047)
(20.5)
83,332
100,413
(17,081)
(17.0)
Depreciation
594
647
(53)
8.2
1,894
1,692
202
(11.9)
Depreciation of right-of-use assets
1,393
1,530
(137)
9.0
4,201
4,606
(405)
8.8
Special charges
3,008
1,243
1,765
(142.0)
4,500
1,440
3,060
(212.5)
Adjusted EBITDA
$
32,250
$
37,722
(5,472)
(14.5)
$
93,927
$
108,151
(14,224)
(13.2)
Adjusted EBITDA margin
25.7 %
28.9 %
25.1 %
28.7 %
Adjusted EBITDA per diluted share
$
0.58
$
0.68
(0.10)
(14.7)
$
1.70
$
1.95
(0.25)
(12.8)
Condensed Consolidated Interim Statements of Financial Position
(in thousands of Canadian dollars)
(unaudited)
As at July 31,
2025
As at October 31,
2024
ASSETS
Current assets:
Cash and cash equivalents
$
271,481
$
274,240
Short-term investments
101
487
Accounts receivable
85,735
92,348
Prepaid expenses and other assets
17,069
16,100
374,386
383,175
Non-current assets:
Property and equipment
4,127
4,192
Right-of-use assets
10,888
11,473
Intangible assets
95,263
98,594
Goodwill
336,566
309,831
Deferred income tax assets
27,716
26,228
474,560
450,318
$
848,946
$
833,493
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities
$
72,096
$
70,087
Income tax payable
5,940
5,525
Dividends payable
16,526
14,397
Provisions
2,651
1,834
Deferred revenue
115,752
114,080
Lease obligations
5,243
5,344
218,208
211,267
Non-current liabilities:
Deferred income tax liabilities
12,565
10,500
Deferred revenue
7,962
8,094
Net employee defined-benefit obligation
2,463
2,081
Lease obligations
5,069
5,744
28,059
26,419
246,267
237,686
Shareholders' equity:
Share capital
117,603
118,217
Contributed surplus
10,739
9,764
Retained earnings
444,943
446,748
Accumulated other comprehensive income
29,394
21,078
602,679
595,807
$
848,946
$
833,493
Condensed Consolidated Interim Statements of Operations and Comprehensive Income
(in thousands of Canadian dollars, except per share amounts)
(unaudited)
Three months
Nine months
Periods ended July 31
2025
2024
2025
2024
Revenue
Software licenses
$ 17,290
$ 19,579
$ 51,956
$ 57,046
SaaS and maintenance services
87,753
88,812
261,874
258,383
Professional services
17,156
18,231
50,889
51,577
Hardware
3,378
3,879
9,677
9,797
125,577
130,501
374,396
376,803
Direct costs
Software licenses
640
1,689
2,079
3,104
Services
43,410
41,696
129,338
122,178
Hardware
1,359
2,451
4,440
5,337
45,409
45,836
135,857
130,619
Revenue, net of direct costs
80,168
84,665
238,539
246,184
Operating expenses
Selling, general and administrative
23,752
23,980
72,368
71,661
Research and development
24,166
22,963
72,244
66,372
Depreciation
594
647
1,894
1,692
Depreciation of right-of-use assets
1,393
1,530
4,201
4,606
Special charges
3,008
1,243
4,500
1,440
52,913
50,363
155,207
145,771
Results from operating activities
27,255
34,302
83,332
100,413
Amortization of acquired software and customer relationships
(7,032)
(9,663)
(22,807)
(31,183)
Foreign exchange losses
(580)
(1,747)
(2,233)
(3,550)
Interest expense – lease obligations
(132)
(132)
(391)
(430)
Finance income
1,807
2,333
6,024
7,296
Finance expenses
(16)
(29)
(43)
(41)
Other income
125
407
1,625
513
Income before income taxes
21,427
25,471
65,507
73,018
Provision for income taxes
4,254
4,891
12,969
14,331
Net income for the period
17,173
20,580
52,538
58,687
Item that may be subsequently reclassified to income:
Cumulative translation adjustment
1,928
5,929
8,316
7,367
Other comprehensive income
1,928
5,929
8,316
7,367
Comprehensive income
$ 19,101
$ 26,509
$ 60,854
$ 66,054
Earnings per share
Basic
$ 0.31
$ 0.37
$ 0.95
$ 1.06
Diluted
$ 0.31
$ 0.37
$ 0.95
$ 1.06
Condensed Consolidated Interim Statements of Cash Flows
(in thousands of Canadian dollars)
(unaudited)
Three months
Nine months
Periods ended July 31
2025
2024
2025
2024
OPERATING ACTIVITIES
Net income for the period
$ 17,173
$ 20,580
$ 52,538
$ 58,687
Adjustments for non-cash items
Depreciation
594
647
1,894
1,692
Depreciation of right-of-use assets
1,393
1,530
4,201
4,606
Interest expense – lease obligations
132
132
391
430
Amortization of acquired software and customer relationships
7,032
9,663
22,807
31,183
Stock-based compensation expense
425
298
960
1,076
Provision for income taxes
4,254
4,891
12,969
14,331
Finance expenses and other income
(109)
(378)
(1,582)
(472)
30,894
37,363
94,178
111,533
Changes in non-cash operating working capital
(700)
6,243
3,670
(246)
Income taxes paid
(3,107)
(3,273)
(12,841)
(10,799)
Net cash provided by operating activities
27,087
40,333
85,007
100,488
INVESTING ACTIVITIES
Net purchase of property and equipment
(372)
(683)
(1,179)
(1,461)
Acquisitions, net of cash acquired*
-
(30,854)
(33,399)
(43,448)
Recovery of purchase consideration for prior-year acquisition
-
-
-
171
Net cash used in investing activities
(372)
(31,537)
(34,578)
(44,738)
FINANCING ACTIVITIES
Issuance of share capital
-
1,412
-
6,095
Normal course issuer bid share repurchases
(1,579)
(1,759)
(7,529)
(2,906)
Repayment of lease obligations
(1,561)
(2,347)
(4,770)
(5,747)
Dividends paid
(16,547)
(14,398)
(45,284)
(38,742)
Net cash used in financing activities
(19,687)
(17,092)
(57,583)
(41,300)
Impact of foreign exchange on cash and cash equivalents
1,168
3,091
4,395
3,731
Increase (decrease) in cash and cash equivalents
8,196
(5,205)
(2,759)
18,181
Cash and cash equivalents - beginning of period
263,285
262,918
274,240
239,532
Cash and cash equivalents - end of period
$ 271,481
$ 257,713
$ 271,481
$ 257,713
*Acquisitions are net of cash acquired of $Nil and $9,287 for the three and nine months ended July 31, 2025, and $245 and $742 for the three and nine months ended July 31, 2024, respectively.
Enghouse Systems Limited
Segment Reporting Information
(in thousands of Canadian dollars)
Three months ended July 31
2025
2024
IMG
AMG
Total
IMG
AMG
Total
Revenue
$
69,625
$
55,952
$
125,577
$
77,522
$
52,979
$
130,501
Direct costs
(24,822)
(20,587)
(45,409)
(27,981)
(17,855)
(45,836)
Revenue, net of direct costs
44,803
35,365
80,168
49,541
35,124
84,665
Operating expenses excluding special charges
(22,230)
(14,259)
(36,489)
(21,257)
(14,190)
(35,447)
Depreciation
(356)
(238)
(594)
(389)
(258)
(647)
Depreciation of right-of-use assets
(865)
(528)
(1,393)
(997)
(533)
(1,530)
Segment profit
$
21,352
$
20,340
$
41,692
$
26,898
$
20,143
$
47,041
Special charges
(3,008)
(1,243)
Corporate and shared service expenses
(11,429)
(11,496)
Results from operating activities
$
27,255
$
34,302
Nine months ended July 31
2025
2024
IMG
AMG
Total
IMG
AMG
Total
Revenue
$
216,964
$
157,432
$
374,396
$
234,189
$
142,614
$
376,803
Direct costs
(76,346)
(59,511)
(135,857)
(79,960)
(50,659)
(130,619)
Revenue, net of direct costs
140,618
97,921
238,539
154,229
91,955
246,184
Operating expenses excluding special charges
(68,833)
(41,194)
(110,027)
(66,166)
(37,637)
(103,803)
Depreciation
(1,151)
(743)
(1,894)
(1,158)
(534)
(1,692)
Depreciation of right-of-use assets
(2,701)
(1,500)
(4,201)
(2,930)
(1,676)
(4,606)
Segment profit
$
67,933
$
54,484
$
122,417
$
83,975
$
52,108
$
136,083
Special charges
(4,500)
(1,440)
Corporate and shared service expenses
(34,585)
(34,230)
Results from operating activities
$
83,332
$
100,413
About Enghouse
Enghouse is a Canadian publicly traded company (TSX: ENGH) that provides a wide range of mission-critical vertically focused enterprise software solutions. Our core technologies are used for contact centers, video communications, virtual healthcare, education, telecommunications networks, IPTV, public safety and transit. The Company's two-pronged growth strategy to grow earnings focuses on both organic growth and acquisitions, which, to date, have been funded only through net cash provided by operating activities as the Company has no outstanding external debt financing. The Company is organized around two business segments, the Interactive Management Group ("IMG") and the Asset Management Group ("AMG") due to their unique customer segments and technology offerings. Further information about Enghouse may be obtained from the Company's website at www.enghouse.com.
Conference Call and Webcast
A conference call to discuss the results will be held on Friday, September 5, 2025 at 8:45 a.m. EST. To participate, please call
+1-289-514-5100 or North American Toll-Free +1-800-717-1738. Confirmation code: 05742. A webcast is also available at: https://www.enghouse.com/investors.php.
****
The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA as a measure of operating performance. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is calculated based on results from operating activities adjusted for depreciation of property and equipment and right-of-use assets, and special charges for acquisition related restructuring costs. Management uses Adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, foreign exchange gains and losses, other income and restructuring costs primarily related to acquisitions.
SOURCE Enghouse Systems Limited
View original content: http://www.newswire.ca/en/releases/archive/September2025/04/c1859.html
Contact:
For further information please contact: Sam Anidjar, Vice President, Corporate Development, (905) 946-3200, [email protected]
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