NTG Clarity Networks (NCI) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered record revenue of CAD 19.7 million, up 68% year-over-year, marking the 16th consecutive quarter of last-12-months revenue growth and 10th consecutive record revenue quarter.

• Growth was led by offshore services (up 268%) and NTG Apps/NTGapps (up 151%), with 95% of revenue from Saudi Arabia.

• Gross profit rose 51% to CAD 6.7 million, with gross margin at 34% (down from 38%) due to upfront costs for new client engagements.

• Net income before taxes was CAD 3.2 million, up 56% from last year; after taxes, net income was CAD 2.1 million (11% of revenue), EPS at CAD 0.05.

• Strategic priorities included deepening customer relationships, expanding the client base, and increasing NTG Apps adoption.

Financial highlights

• Revenue reached CAD 19.7 million (Q1 2025), up from CAD 11.8 million (Q1 2024).

• Gross profit was CAD 6.7 million (Q1 2025) vs CAD 4.5 million (Q1 2024); gross margin was 34%, slightly below the typical 35%-40%.

• Net income was CAD 2.1 million (11% margin), down from CAD 2.4 million (20%) due to growth investments and a CAD 1.2 million income tax provision.

• Adjusted EBITDA was CAD 2.9 million (15% margin), below the 16%-20% target due to investments in G&A and sales.

• Operating cash flow was CAD 400,000; free cash flow was negative CAD 17,000 due to capital expenditures.

Outlook and guidance

• Full-year 2025 revenue guidance raised to CAD 78 million, targeting 40% year-over-year growth.

• Adjusted EBITDA margin forecasted at 16%-20% for 2025; margin expected to improve as growth investments scale.

• Operating expenses expected to taper off after Q1, with Q1 being the peak for investments in headcount and sales.

• Strategic priorities include expanding client integration, leveraging referrals, and increasing NTG Apps adoption.