Enghouse Releases First Quarter Results

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Enghouse Releases First Quarter Results

Canada NewsWire

MARKHAM, ON, March 12, 2026

MARKHAM, ON, March 12, 2026 /CNW/ - Enghouse Systems Limited (TSX: ENGH) announces first quarter (unaudited) financial results for the period ended January 31, 2026. All figures are denominated in Canadian dollars unless otherwise indicated.

First Quarter Financial Highlights:

  • Revenue was $120.1 million as compared to $124.0 million in Q1 2025;
  • Recurring revenue, which includes SaaS and maintenance services, decreased by 3.8% to $84.6 million compared to $87.9 million in Q1 2025, and represents 70.4% of total revenue, as we continue to prioritize this revenue stream;
  • Results from operating activities were $28.3 million compared to $31.0 million in Q1 2025;
  • Net income was $17.5 million compared to $21.9 million in Q1 2025;
  • Adjusted EBITDA decreased to $31.1 million compared to $33.1 million, while achieving a 25.9% margin;
  • Net cash provided by operating activities, excluding changes in working capital and income taxes paid, was $31.4 million compared to $37.7 million in Q1 2025. Cash, cash equivalents and short-term investments were $260.2 million as at January 31, 2026.

Amid ongoing macroeconomic shifts, everchanging AI impact predictions and an increasingly unpredictable global environment, Enghouse continues to remain persistent in its core principles of disciplined execution, operational resilience and long-term value creation. The Company benefits from a substantial recurring revenue base, which consistently represents approximately 70% of total revenues and demonstrates stability and predictability across changing market conditions.

Throughout the quarter, the Company continued with its restructuring and alignment initiatives to support operational efficiency and profitability, positioning the business for scalable growth. Our Asset Management Group revenue increased over the prior year quarter as our expansion in that segment provides for a more diverse product suite. Combined with offering a balanced mix of on-premise and SaaS solutions, Enghouse is both well positioned and funded to capitalize on accretive opportunities that expand the Company's portfolio.

During the quarter, Enghouse completed the acquisition of Sixbell Telco ("Sixbell"), a provider of telecommunications and customer engagement software solutions in Latin America. Sixbell provides a comprehensive suite of software platforms that enable service providers to modernize and transform their networks. Its solutions span converged charging, intelligent routing, signaling management, and voice interaction solutions.

The Company generated positive net cash provided by operating activities during the quarter, while funding the Sixbell acquisition, returning $16.4 million to shareholders through dividends and repurchasing $5.1 million of its shares. As a result, Enghouse closed the quarter with $260.2 million in cash, cash equivalents and short-term investments, compared to $269.1 million at October 31, 2025, with no external debt financing.

With a robust balance sheet and consistent cash generation, Enghouse remains well-equipped to allocate capital in a disciplined manner, including dividends, share repurchases and strategic acquisitions that deepen vertical expertise and strengthen geographic presence. The Company remains focused on driving profitable growth, enhancing operational efficiency and delivering predictable performance and long-term shareholder value.

Quarterly dividends:          

Today, the Board of Directors approved a 3.3% increase in the Company's eligible quarterly dividend to $0.31 per common share, payable on May 29, 2026, to shareholders of record at the close of business on May 15, 2026. This represents the 18th consecutive year in which the Company increased its dividend.

Enghouse Systems Limited
Financial Highlights
(unaudited, in thousands of Canadian dollars)

 

For the periods ended January 31




Three months







2026


2025

Var ($) 

Var (%) 

 

Revenue






 

$    120,098

 

$    124,000

(3,902)

(3.1)













Direct costs







44,627


44,463

164

0.4

Revenue, net of direct costs






$

75,471

$

79,537

(4,066)

(5.1)

As a % of revenue







62.8 %


64.1 %















Operating expenses







46,390


48,457

(2,067)

(4.3)

Special charges







810


91

719

790.1

Results from operating activities






$

28,271

$

30,989

(2,718)

(8.8)

As a % of revenue







23.5 %


25.0 %















Amortization of acquired software and customer relationships







(6,621)


(8,479)

1,858

21.9

Foreign exchange (losses) gains







(1,044)


2,309

(3,353)

(145.2)

Interest expense – lease obligations







(128)


(128)

0

0.0

Finance income







1,548


2,304

(756)

(32.8)

Finance expenses







(74)


(3)

(71)

(2366.7)

Other income







1,459


299

1,160

388.0

Income before income taxes






$

23,411

$

27,291

(3,880)

(14.2)

Provision for income taxes







5,911


5,387

524

9.7

Net income for the period






$

17,500

$

21,904

(4,404)

(20.1)













Basic earnings per share






$

0.32

$

0.40

(0.08)

(20.0)

Diluted earnings per share






$

0.32

$

0.40

(0.08)

(20.0)













Net cash provided by operating activities







20,791


21,249

(458)

(2.2)

Net cash provided by operating activities excluding changes in working
capital and income taxes paid  







31,407


37,741

(6,334)

(16.8)













Adjusted EBITDA












Results from operating activities







28,271


30,989

(2,718)

(8.8)













Depreciation







614


653

(39)

6.0

Depreciation of right-of-use assets







1,451


1,378

73

(5.3)

Special charges







810


91

719

(790.1)

Adjusted EBITDA






$

31,146

$

33,111

(1,965)

(5.9)













Adjusted EBITDA margin







25.9 %


26.7 %















Adjusted EBITDA per diluted share






$

0.57

$

0.60

( 0.03)

(5.0)

Enghouse Systems Limited

Condensed Consolidated Interim Statements of Financial Position

(in thousands of Canadian dollars)

(unaudited)


   As at January 31,
2026

As at October 31,
2025

ASSETS






Current assets:






   Cash and cash equivalents


$

260,190

$

269,061

   Short-term investments



22


25

   Accounts receivable



106,396


88,980

   Prepaid expenses and other assets



15,779


17,001




382,387


375,067

Non-current assets:






   Property and equipment



4,109


3,890

   Right-of-use assets



10,892


11,453

   Intangible assets



85,851


89,710

   Goodwill



338,520


341,593

   Deferred income tax assets



34,458


35,105




473,830


481,751



$

856,217

$

856,818







LIABILITIES AND SHAREHOLDERS' EQUITY  






Current liabilities:






   Accounts payable and accrued liabilities


$

67,984

$

76,167

   Income taxes payable



10,644


10,662

   Dividends payable



16,350


16,426

   Provisions



1,861


2,013

   Deferred revenue



126,647


108,268

   Lease obligations



4,288


5,197




227,774


218,733

Non-current liabilities:






   Deferred income tax liabilities



14,114


13,439

   Deferred revenue



5,866


6,791

   Net employee defined benefit obligation



2,408


2,442

   Lease obligations



6,213


5,944




28,601


28,616




256,375


247,349

 

Shareholders' equity






   Share capital



116,347


116,894

   Contributed surplus



11,688


11,110

   Retained earnings



439,769


443,134

   Accumulated other comprehensive income



32,038


38,331




599,842


609,469



$

856,217

$

856,818

Enghouse Systems Limited

Condensed Consolidated Interim Statements of Operations and Comprehensive Income

(in thousands of Canadian dollars, except per share amounts)



(unaudited)                                            



Three months

Periods ended January 31




2026

2025







Revenue

     Software licenses




 

$  16,859

$  17,781

     SaaS and maintenance services




84,553

87,932

     Professional services




16,096

16,108

     Hardware




2,590

2,179





120,098

124,000

Direct costs






     Software licenses




646

736

     Services




42,659

42,497

     Hardware




1,322

1,230





44,627

44,463

Revenue, net of direct costs




75,471

79,537







Operating expenses






     Selling, general and administrative




22,395

23,636

     Research and development




21,930

22,790

     Depreciation




614

653

     Depreciation of right-of-use assets




1,451

1,378

     Special charges




810

91





47,200

48,548







Results from operating activities




28,271

30,989







Amortization of acquired software and customer relationships   




(6,621)

(8,479)

Foreign exchange (losses) gains




(1,044)

2,309

Interest expense – lease obligations




(128)

(128)

Finance income




1,548

2,304

Finance expenses




(74)

(3)

Other income




1,459

299

Income before income taxes




23,411

27,291







Provision for income taxes




5,911

5,387






Net income for the period




$  17,500

$  21,904

 

Items that may be subsequently reclassified to income:





Cumulative translation adjustment




(6,293)

9,571







Other comprehensive (loss) income




(6,293)

9,571







Comprehensive income




$  11,207

$  31,475

Earnings per share






Basic




$      0.32

$      0.40

Diluted




$      0.32

$      0.40

Enghouse Systems Limited

Condensed Consolidated Interim Statements of Cash Flows

(in thousands of Canadian dollars)

(unaudited)



 

Three months

Periods ended January 31




2026

2025

 

OPERATING ACTIVITIES






Net income for the period




$    17,500

$    21,904


Adjustments for non-cash items











   Depreciation




614

653

   Depreciation of right-of-use assets




1,451

1,378

   Interest expense – lease obligations




128

128

   Amortization of acquired software and customer relationships  




6,621

8,479

   Stock-based compensation expense




567

108

   Provision for income taxes




5,911

5,387

   Finance expenses and other (income)




(1,385)

(296)





31,407

37,741







Changes in non-cash operating working capital




(3,911)

(11,891)

Income taxes paid




(6,705)

(4,601)

Net cash provided by operating activities




20,791

21,249







INVESTING ACTIVITIES






Purchase of property and equipment, net




(824)

(404)

Acquisitions, net of cash acquired*




(5,524)

(6,586)







Proceeds from sale of intangible asset




701

-

Net cash used in investing activities




(5,647)

(6,990)







FINANCING ACTIVITIES






Normal course issuer bid share repurchases




(5,051)

(5,950)

Repayment of lease obligations




(1,589)

(1,374)

Dividends paid




(16,426)

(14,397)

Net cash used in financing activities




(23,066)

(21,721)

 

Impact of foreign exchange on cash and cash equivalents




(949)

3,526







Decrease in cash and cash equivalents




(8,871)

(3,936)

Cash and cash equivalents ─ beginning of period




269,061

274,240

Cash and cash equivalents ─ end of period




$  260,190

$  270,304

*Acquisitions are net of cash acquired of $83 for the three months ended January 31, 2026 and $2,620 for the three months ended January 31, 2025.

Enghouse Systems Limited
Segment Reporting Information
(in thousands of Canadian dollars)

Three months ended January 31


2026 (Unaudited)


2025 (Unaudited)

IMG 

AMG 

Total 

IMG 

AMG 

Total 

Revenue

$

67,296

$

52,802

$

120,098

$

73,221

$

50,779

$

124,000

Direct costs


(22,798)


(21,829)


(44,627)


(25,713)


(18,750)


(44,463)

Revenue, net of direct costs


44,498


30,973


75,471


47,508


32,029


79,537

Operating expenses excluding special charges  


(21,511)


(12,695)


(34,206)


(22,602)


(11,978)


(34,580)

Depreciation


(326)


(288)


(614)


(402)


(251)


(653)

Depreciation of right-of-use assets


(926)


(525)


(1,451)


(909)


(469)


(1,378)

Segment profit

$

21,735

$

17,465

$

39,200

$

23,595

$

19,331

$

42,926

Special charges






(810)






(91)

Corporate and shared service expenses






(10,119)






(11,846)

Results from operating activities





$

28,271





$

30,989

About Enghouse

Enghouse Systems Limited is a Canadian publicly traded company (TSX: ENGH) that provides mission-critical vertically focused enterprise software solutions. Our core technologies are used for contact centers, video communications, virtual healthcare, education, telecommunications networks, IPTV, public safety and transit. The Company's two-pronged strategy to grow earnings focuses on both organic growth and acquisitions, which, to date, have been funded through net cash provided by operating activities as the Company has no external debt financing. The Company is organized around two business segments, the Interactive Management Group ("IMG") and the Asset Management Group ("AMG") due to their unique customer segments and technology offerings. Further information about Enghouse may be obtained from the Company's website at  www.enghouse.com. 

Conference Call and Webcast

A conference call to discuss the results will be held on Friday, March 13, 2026 at 8:45 a.m. EST. To participate, please call Local
+1-289-514-5100 or North American Toll-Free 1-800-717-1738. Confirmation code: 85248. A webcast is also available at: https://www.enghouse.com/investors.php. 

****

The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA, Adjusted EBITDA margin and Adjusted EBITDA per diluted share as measures of operating performance. Therefore, these collective Adjusted EBITDA measures may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is calculated based on results from operating activities adjusted for depreciation of property and equipment and right-of-use assets and special charges for acquisition related restructuring costs. Management uses Adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, foreign exchange gains and losses, other income and restructuring costs.

SOURCE Enghouse Systems Limited