NTG Clarity Networks (NCI) Q3 2025 earnings summary

Executive summary

• Achieved 18 consecutive quarters of last 12 months' revenue growth, with Q3 2025 revenue at CAD 20.9 million (USD 20.87 million), up 42% year-over-year, driven by increased accounts, higher service levels, and digital transformation demand.

• Rolling 12-month revenue reached CAD 77 million, on track for full-year guidance of CAD 78 million.

• Net income was CAD 1.9 million (9% of revenue), down from CAD 2.1 million (14%) due to tax accruals and the start of tax payments in 2025.

• Adjusted EBITDA was CAD 2.4 million (12% margin), down from CAD 3.2 million (22%) last year, reflecting investments in new hires for future contracts.

• Strategic priorities include deepening client engagements, expanding the customer base, and growing the NTG Apps software line.

Financial highlights

• Offshore services revenue grew 82% year-over-year; NTG Apps revenue up 685% for the quarter.

• Gross margin at 35%, at the low end of historical range due to revenue mix and pricing incentives; gross profit up 32%.

• Operating expenses rose to 24% of revenue (from 17% last year), mainly due to G&A and strategic hiring; SG&A expenses increased to $4.92 million from $2.45 million year-over-year.

• Net income per share (basic and diluted): $0.04 in Q3 2025, down from $0.05 in Q3 2024.

• Free cash flow was negative $4.12 million in Q3 2025, compared to positive $0.29 million in Q3 2024.

Outlook and guidance

• Reaffirmed full-year 2025 revenue guidance of CAD 78 million (USD 78 million), representing 40% year-over-year growth.

• Adjusted EBITDA margin guidance revised to 12%-16% (from 16%-20%) due to delayed contract closings and pre-hiring.

• Management expects Q4 cash flow to improve as AR is collected.

• Long-term target to return to 20% adjusted EBITDA margin as new contracts are signed and resources are fully utilized.

• Strategic focus on expanding client relationships, winning new customers, and increasing adoption of NTG Apps.