Quarterhill (QTRH) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue was $33.9 million, down from $34.9 million in Q1 2024, mainly due to timing of tolling contract revenues and seasonally slow performance, with negative impact from two legacy tolling contracts under renegotiation.

• Adjusted EBITDA was negative $3.4 million, a decline from $0.2 million in Q1 2024, impacted by $3.2 million from two tolling contracts under renegotiation.

• Net loss widened to $8.4 million, or $0.07 per diluted share, compared to $4.2 million, or $0.04 per share, in Q1 2024.

• Revenue backlog stood at $476 million as of March 31, 2025, providing strong visibility for future periods.

• Cash used in operations improved to $3.6 million from $10.1 million in Q1 2024; cash and equivalents were $26.1 million at quarter-end.

Financial highlights

• Q1 revenue was $33.9 million, down $1 million year-over-year due to project timing and seasonal factors.

• Gross margin was 12% in Q1 2025, down from 18-20% in Q1 2024, mainly due to poor margins on two tolling projects.

• Adjusted EBITDA was negative $3.4 million, compared to positive $0.2 million in Q1 last year; excluding the two contracts, adjusted EBITDA would have been negative $0.2 million.

• Operating expenses rose to $11.2 million from $10.5 million, driven by higher recruitment, consulting, and facilities costs.

• Adjusted working capital stood at $59.8 million at March 31, 2025.

Outlook and guidance

• Focus remains on revenue growth, margin improvement, and positive cash flow as contract renegotiations are resolved.

• Expectation for adjusted EBITDA growth in 2025, driven by steady enforcement unit results and improved tolling performance.

• Backlog includes a large portion of higher-margin contracted maintenance revenue, expected to drive better margins in 2025 and beyond.

• A $3.2 million dividend from WiLAN received after quarter-end will benefit Q2 2025 cash position.

• Forward-looking statements caution that actual results may differ due to various risks and assumptions.