DATA Communications Management (DCM) Q2 2025 earnings summary

Executive summary

• Q2 2025 revenue declined 9.5% year-over-year to $113.8 million, primarily due to client budget reductions, delayed orders, and market uncertainty, including Canadian labor disruptions and trade policy issues.

• Adjusted EBITDA was $16.6 million, nearly flat year-over-year, with margin improving to 14.6% from 13.4% due to strong cost management and lower SG&A expenses.

• Net income for Q2 2025 was $3.7 million, down from $4.1 million and $5.5 million in prior years.

• No material client losses; top enterprise clients remain stable, and new business development is robust with 45 new logos and CAD 9 million in annualized revenue added in the first half.

• All financial guidance has been withdrawn due to ongoing external uncertainties.

Financial highlights

• Q2 2025 revenue was $113.8 million, down 9.5% year-over-year; gross profit margin was 26.8%, slightly down from 27.3% last year.

• Adjusted EBITDA was $16.6 million, down 1.9% year-over-year, with margin at 14.6% versus 13.4% last year.

• SG&A expenses were $19.9 million, a reduction from $22.5 million in Q2 2024.

• Net debt reduced by 40% since the Moore Canada acquisition, now at $87.5 million.

• Free cash flow for H1 2025 was negative $0.6 million, compared to $7.8 million in 2024.

Outlook and guidance

• All financial guidance has been withdrawn due to uncertainty around trade policies, tariffs, economic direction, and Canada Post labor issues.

• Management expects to realize new business opportunities as market conditions improve and remains focused on margin improvement and capital investment returns.

• M&A activity is increasing, with a robust pipeline and strong capitalization to pursue opportunities.

• Priorities for 2025 include profitable organic growth, return on capital investments, gross margin improvement, and operational agility.