DATA Communications Management (DCM) investor relations material

Executive summary

• Revenues declined 5% year-over-year to $117.4 million, as expected, but adjusted EBITDA rose 2.7% to CAD 19.1 million, reflecting improved cost management and positive momentum toward quarter-end.

• Achieved record new business development, adding over 40 new clients and CAD 4 million in annualized revenue.

• Technology services grew 7.4% and technology hardware surged 64%, with combined tech-enabled revenues up 20% to CAD 10 million, now 8.5% of total revenues.

• SG&A expenses dropped 15.4% year-over-year, now 16.9% of revenues, supporting margin improvement.

• Free cash flow swung to +CAD 10.7 million from -CAD 7.4 million a year ago, driven by working capital improvements.

Financial highlights

• Revenue declined 5% year-over-year to $117.4 million, in line with expectations.

• Adjusted EBITDA was CAD 19.1 million, up 2.7% year-over-year, with a record 16.3% margin.

• Adjusted net income increased 11% to CAD 5.8 million; adjusted net margin at 4.9%.

• Free cash flow improved by over CAD 18 million year-over-year, reaching CAD 10.7 million.

• Net debt at quarter-end was $66.4 million, down 27% year-over-year and 14% sequentially.

Outlook and guidance

• Expecting continued positive revenue momentum and high revenue retention, with no material client losses.

• Focus remains on new business development, gross margin improvement, operational efficiencies, digital acceleration, and strong cash flow.

• Early signs of market stabilization and most business units returning to growth.

• Management anticipates continued external uncertainty due to trade policy, geopolitical unrest, and potential labor disruptions at Canada Post.