MARKHAM, ON, Sept. 4, 2025 /CNW/ – Enghouse Systems Limited (TSX:ENGH) announces third quarter (unaudited) financial results for the period ended July 31, 2025. All figures are denominated in Canadian dollars unless otherwise indicated.
Third Quarter Financial Highlights:
- Revenue was $125.6 million as compared to $130.5 million in Q3 2024 and for the nine-month period was $374.4 million compared to $376.8 million last year;
- Recurring revenue, which includes SaaS and maintenance services, was $87.8 million compared to $88.8 million in Q3 2024, and represents 69.9% of total revenue. For the nine-month period, recurring revenue was $261.9 million compared to $258.4 million in the prior period, an increase of 1.4%, as we continue to prioritize this revenue stream;
- Results from operating activities was $27.3 million compared to $34.3 million in Q3 2024 and decreased for the nine-month period to $83.3 million from $100.4 million in the comparable period;
- Net income was $17.2 million compared to $20.6 million in Q3 2024 and $52.5 million year-to-date compared to $58.7 million last year;
- Adjusted EBITDA was $32.3 million compared to $37.7 million in Q3 2024, while achieving a 25.7% margin. Year to date Adjusted EBITDA was $93.9 million compared to $108.2 million in the prior year;
- Net cash provided by operating activities, excluding changes in working capital and income taxes paid, was $30.9 million compared to $37.4 million in Q3 2024 and $94.2 million year-to-date compared to $111.5 million in the comparable period. Cash, cash equivalents and short-term investments were $271.6 million as at July 31, 2025.
In the third quarter, despite ongoing macroeconomic uncertainty and a difficult market environment, Enghouse continues to deliver positive net income and cash flows provided by operating activities, supported by a large recurring revenue base, which accounted for 70% of total revenue.
During the quarter, Enghouse undertook strategic measures to align costs with revenues, including operational adjustments and acquisition restructuring efforts, resulting in special charges of approximately $3.0 million. These actions were taken to improve profitability given the current market conditions. Cost management measures are expected to continue to yield benefits in the future as they take full effect. The Company reported net income of $17.2 million after including these charges.
Enghouse maintains a strong balance sheet, closing the quarter with $271.6 million in cash, cash equivalents, and short-term investments, and no external debt. The Company remains well positioned to leverage these cash resources to take advantage of buying opportunities in this market that meet our acquisition criteria. Enghouse enters the final quarter of fiscal 2025 remaining focused on completing accretive acquisitions, maintaining profitability, generating positive cash flows provided by operating activities, and adapting to evolving market conditions to drive sustainable long-term growth.
Quarterly dividends:
Today, the Board of Directors approved an eligible quarterly dividend of $0.30 per common share, payable on November 28, 2025, to shareholders of record at the close of business on November 14, 2025.
Enghouse Systems Limited
Financial Highlights
(unaudited, in thousands of Canadian dollars)
|
For the period ended July 31 |
Three months |
Nine months |
|||||||||||
|
2025 |
2024 |
Var ($) |
Var (%) |
2025 |
2024 |
Var ($) |
Var (%) |
||||||
|
Revenue |
$ |
125,577 |
$ |
130,501 |
(4,924) |
(3.8) |
$ |
374,396 |
$ |
376,803 |
(2,407) |
(0.6) |
|
|
Direct costs |
45,409 |
45,836 |
(427) |
(0.9) |
135,857 |
130,619 |
5,238 |
4.0 |
|||||
|
Revenue, net of direct costs |
$ |
80,168 |
$ |
84,665 |
(4,497) |
(5.3) |
$ |
238,539 |
$ |
246,184 |
(7,645) |
(3.1) |
|
|
As a % of revenue |
63.8 % |
64.9 % |
63.7 % |
65.3 % |
|||||||||
|
Operating expenses |
49,905 |
49,120 |
785 |
1.6 |
150,707 |
144,331 |
6,376 |
4.4 |
|||||
|
Special charges |
3,008 |
1,243 |
1,765 |
142.0 |
4,500 |
1,440 |
3,060 |
212.5 |
|||||
|
Results from operating activities |
$ |
27,255 |
$ |
34,302 |
(7,047) |
(20.5) |
$ |
83,332 |
$ |
100,413 |
(17,081) |
(17.0) |
|
|
As a % of revenue |
21.7 % |
26.3 % |
22.3 % |
26.6 % |
|||||||||
|
Amortization of acquired software and customer relationships |
(7,032) |
(9,663) |
2,631 |
27.2 |
(22,807) |
(31,183) |
8,376 |
26.9 |
|||||
|
Foreign exchange losses |
(580) |
(1,747) |
1,167 |
66.8 |
(2,233) |
(3,550) |
1,317 |
37.1 |
|||||
|
Interest expense – lease obligations |
(132) |
(132) |
– |
0.0 |
(391) |
(430) |
39 |
9.1 |
|||||
|
Finance income |
1,807 |
2,333 |
(526) |
(22.5) |
6,024 |
7,296 |
(1,272) |
(17.4) |
|||||
|
Finance expenses |
(16) |
(29) |
13 |
44.8 |
(43) |
(41) |
( 2) |
(4.9) |
|||||
|
Other income |
125 |
407 |
(282) |
(69.3) |
1,625 |
513 |
1,112 |
216.8 |
|||||
|
Income before income taxes |
$ |
21,427 |
$ |
25,471 |
(4,044) |
(15.9) |
$ |
65,507 |
$ |
73,018 |
(7,511) |
(10.3) |
|
|
Provision for income taxes |
4,254 |
4,891 |
(637) |
(13.0) |
12,969 |
14,331 |
(1,362) |
(9.5) |
|||||
|
Net Income for the period |
$ |
17,173 |
$ |
20,580 |
(3,407) |
(16.6) |
$ |
52,538 |
$ |
58,687 |
(6,149) |
(10.5) |
|
|
Basic earnings per share |
0.31 |
0.37 |
(0.06) |
(16.2) |
0.95 |
1.06 |
(0.11) |
(10.4) |
|||||
|
Diluted earnings per share |
0.31 |
0.37 |
(0.06) |
(16.2) |
0.95 |
1.06 |
(0.11) |
(10.4) |
|||||
|
Net cash provided by operating activities |
27,087 |
40,333 |
(13,246) |
(32.8) |
85,007 |
100,488 |
(15,481) |
(15.4) |
|||||
|
Net cash provided by operating activities excluding changes in working capital and income taxes paid |
30,894 |
37,363 |
(6,469) |
(17.3) |
94,178 |
111,533 |
(17,355) |
(15.6) |
|||||
|
Adjusted EBITDA |
|||||||||||||
|
Results from operating activities |
27,255 |
34,302 |
(7,047) |
(20.5) |
83,332 |
100,413 |
(17,081) |
(17.0) |
|||||
|
Depreciation |
594 |
647 |
(53) |
8.2 |
1,894 |
||||||||