Quarterhill Announces Q2 2025 Financial Results

Executive Summary

• Quarterhill Inc. reported financial results for the three and six months ended June 30, 2025, showing a net loss of $6.8 million for Q2 (compared to a $3.0 million loss in Q2 2024) and a net loss of $15.2 million year-to-date.
• Revenue grew 4% year-over-year in Q2 to $43.1 million, driven by the safety and enforcement unit, though gross margins contracted significantly due to cost overruns on two tolling projects.
• The company announced a restructuring expected to yield $12 million in annualized savings, appointed new CFO and CTO, and secured a covenant waiver on its credit agreement following a breach at quarter-end.

Key Details

• Q2 2025 Financials:
  • Revenue: $43.1 million (vs. $41.5 million in Q2 2024).
  • Net Loss: ($6.8) million (vs. ($3.0) million in Q2 2024).
  • Adjusted EBITDA: ($2.7) million (vs. $1.7 million in Q2 2024).
  • Cash Used in Operations: ($4.6) million (vs. $0.8 million generated in Q2 2024).
  • Cash and Cash Equivalents: $22.7 million at June 30, 2025.
  • Revenue Backlog: $463 million at June 30, 2025.
• Year-to-Date (Six Months) Financials:
  • Revenue: $77.0 million (vs. $76.4 million in 2024).
  • Net Loss: ($15.2) million (vs. ($7.2) million in 2024).
  • Adjusted EBITDA: ($6.1) million (vs. $1.8 million in 2024).
  • Cash Used in Operations: ($8.2) million (vs. ($9.3) million in 2024).
• Margin and Expense Analysis:
  • Gross Profit: $6.3 million in Q2 (15% margin) vs. $8.5 million (21% margin) in Q2 2024.
  • Gross Profit YTD: $10.3 million (13% margin) vs. $14.9 million (19% margin) in 2024.
  • Decrease in gross margin attributed to cost overruns on two tolling projects.
  • Total Operating Expenses: $12.9 million in Q2 (vs. $10.8 million in Q2 2024), driven by recruitment, technical consulting, and facilities expenses.
  • The two renegotiated tolling contracts contributed $2.8 million to Q2 revenue and reduced Adjusted EBITDA by ($3.9) million in Q2.
• Corporate Actions and Governance:
  • Appointed David Charron as Chief Financial Officer.
  • Appointed Darren Learmonth as Chief Technology Officer (subsequent to quarter end).
  • Announced a restructuring on July 24, 2025, expected to result in annualized savings of approximately $12 million.
  • Long-term debt reclassified to current liabilities due to non-compliance with financial covenants at June 30, 2025.
  • Finalized an amendment to the credit agreement subsequent to quarter-end, providing additional financial flexibility and a covenant waiver until September 30, 2025.

Notable Quotes

• "Q2 revenue of $43.1 million grew 4% year-over-year, driven by continued strong performance from our safety and enforcement unit, which delivered solid growth and margins," said Chuck Myers, CEO at Quarterhill.
• "We are taking decisive action through a four-point plan to strengthen the business. One, our restructuring announced on July 24th will generate approximately $12 million in annualized savings starting in Q3 2025. Two, we've made meaningful progress on one of the tolling contracts previously disclosed as under renegotiation... Three, we continue to win and pursue higher-margin business while four, we're investing in our next-generation technology platform."
• "While our turnaround continues, we're making tangible progress and building a stronger, more resilient business... With new leadership in place at the board and management level, we're optimistic that executing our plan will drive top-line growth, margin expansion, positive cash flow and shareholder value creation."