Quarterhill (QTRH) Q2 2025 earnings summary

Executive summary

• Q2 revenue reached $43.1 million, up 4% year-over-year, driven by growth in the safety and enforcement business, partially offset by tolling contract timing.

• Net loss widened to ($6.8) million from ($3.0) million in Q2 2024; adjusted EBITDA was negative $2.7 million, impacted by two problematic tolling contracts.

• Major restructuring reduced headcount by 15% (100 positions), expected to save $12 million annually starting Q3.

• Leadership changes include new CFO and CTO with significant technology and operational experience.

Financial highlights

• Gross margin in Q2 was 15%, down from 21% a year ago, mainly due to losses on two tolling contracts.

• Adjusted EBITDA for Q2 was negative $2.7 million, compared to positive $1.7 million last year.

• Cash at quarter end was $22.7 million, down from $31.9 million at year end; cash used in operations was ($4.6) million.

• Backlog stood at $463 million, with a large portion in higher-margin contracted maintenance revenue.

Outlook and guidance

• Management expects restructuring and operational improvements to drive sustainable profitability, margin expansion, and positive cash flow.

• Cash burn is expected to moderate, with positive cash from operations anticipated in the second half of 2025.

• Double-digit EBITDA margin targeted for 2026, supported by a strong order backlog and cost reductions.

• Progress made on renegotiating tolling contracts, with mediation expected to begin by end of July.