VerticalScope Announces Second Quarter 2025 Financial Results

Executive Summary

• VerticalScope Holdings Inc. reported financial results for the second quarter ended June 30, 2025, showing a decline in revenue and net income compared to the prior year period.
• The company reported $14.5 million in revenue, a 13% decrease year-over-year, driven by a decline in Monthly Active Users (MAUs) which impacted programmatic advertising.
• Despite lower top-line growth, the company maintained strong cash generation with Free Cash Flow of $3.7 million and an Adjusted EBITDA margin of 30%, while investing in AI and traffic diversification.

Key Details

• Revenue: $14.5 million for Q2 2025, a 13% decrease from $16.7 million in Q2 2024.
• Monthly Active Users (MAUs): Platform served 90 million MAUs in Q2 2025.
• Average Revenue Per User (ARPU): Increased 17% year-over-year, supported by a 41% increase in e-commerce revenue.
• Adjusted EBITDA: $4.3 million for Q2 2025, down 39% from $7.1 million in Q2 2024, representing a 30% margin (down from 42% in Q2 2024).
• Operating Cash Flow: Increased 4% to $6.4 million for Q2 2025.
• Free Cash Flow: $3.7 million for Q2 2025, reflecting an 87% conversion rate of Adjusted EBITDA.
• Net Loss: $1.8 million for Q2 2025, compared to net income of $0.4 million in Q2 2024. The loss was primarily due to lower revenue and $1.6 million in one-time personnel and acquisition costs, partially offset by an income tax recovery.
• Balance Sheet/Liquidity: Available liquidity was $64.1 million, comprised of $8.1 million in unrestricted cash and $56.0 million of undrawn revolver capacity.
• Six-Month Results (H1 2025):
  • Revenue: $28.1 million (down from $31.4 million in H1 2024).
  • Adjusted EBITDA: $7.9 million (down from $12.3 million in H1 2024).
  • Free Cash Flow: $6.9 million (down from $11.7 million in H1 2024).
  • Net Loss: $4.2 million (compared to a net loss of $0.6 million in H1 2024).
• Capital Allocation: The company repurchased share capital for cancellation totaling $1.8 million in Q2 2025.
• Acquisitions: Cash used for acquisitions was $4.0 million in Q2 2025 and $9.5 million in H1 2025.
• Conference Call: Management will host a conference call and webcast on August 13, 2025, at 7 a.m. ET.

Notable Quotes

• Chris Goodridge, CEO: “In Q2, our platform served 90 million MAUs and generated $14.5 million in revenue... The real story this quarter is the speed at which we’ve reshaped our teams and sharpened our focus to position the Company for long-term growth. Our profitable model and strong cash generation give us the firepower to invest decisively in high-impact initiatives, from expanding direct traffic to accelerating AI-powered innovation.”
• Vince Bellissimo, CFO: “Q2 demonstrated our ability to execute effectively while delivering a healthy Free Cash Flow conversion of 87% and a 30% Adjusted EBITDA margin... we continue to invest strategically in key initiatives that drive long-term value creation for our shareholders as we move into the second half of the year.”