Evertz Technologies (ET) Q2 2025 earnings summary

Executive summary

• Q2 FY2025 sales reached CAD 125.3 million (USD 125.3 million), up 12.2% sequentially but down from CAD 130.7 million year-over-year, with strong North American performance and robust recurring software revenue growth.

• Net earnings for the quarter were CAD 15.9 million, a 64.1% sequential increase but down from CAD 22.3 million year-over-year, with EPS of CAD 0.21.

• US/Canada revenue rose 28% year-over-year to CAD 94.8 million, while international revenue declined to CAD 30.4 million.

• Recurring software and services revenue reached CAD 54.8 million, up 23.7% year-over-year.

• Board declared a quarterly dividend increase to CAD 0.20 per share, reflecting confidence in business prospects.

Financial highlights

• Q2 revenue of CAD 125.3 million, down 4% year-over-year; six-month revenue of CAD 236.9 million, down 7.7% year-over-year.

• Gross margin for Q2 was CAD 74.3 million (59.3%), compared to 59.7% last year.

• Cash as of October 31 was CAD 61.7 million; working capital was CAD 199.8 million.

• Earnings from operations were CAD 21.4 million, up 69.7% sequentially.

• Fully diluted EPS was CAD 0.21, down from CAD 0.29 in the same quarter last year.

Outlook and guidance

• Backlog plus November shipments exceeded CAD 348 million, up CAD 12 million sequentially, supporting expectations for sequential revenue growth.

• Purchase order backlog exceeded CAD 298 million at the end of November 2024.

• Majority of backlog expected to convert within the next 12 months.

• Continued emphasis on growing recurring software and services revenue alongside strong hardware pipeline.

• Management notes forward-looking statements are subject to significant risks and uncertainties.