Evertz Technologies posted revenue of CAD 118.3 million for the fiscal first quarter ended July 31, 2026, a 5.5% increase from CAD 112 million a year earlier, but reported diluted earnings per share of CAD 0.10 — nearly 30% below the Wall Street consensus estimate of CAD 0.1433.
The Burlington, Ontario-based manufacturer of broadcast and media infrastructure saw software and services revenue climb 14% to CAD 58.9 million, accounting for 49.8% of total sales, up from CAD 51.6 million in the prior-year period. Hardware revenue slipped slightly to CAD 59.3 million from CAD 60.5 million.
Gross margin came in at 58.6% of revenue, or CAD 69.3 million, down from 61.4% a year ago. Chief Financial Officer Doug Moore said the company expects gross margin to remain in a target range of 58% to 61% going forward.
Research and development expenses totaled CAD 38.5 million, or 32.5% of revenue, including CAD 700,000 in additional salaries and CAD 300,000 in patent-related professional fees. Selling, general and administrative costs were CAD 19.9 million, or 16.8% of revenue, roughly flat year-over-year and down about CAD 0.8 million sequentially.
Net earnings for the quarter were CAD 8 million. The company recorded a CAD 500,000 foreign exchange loss compared to a CAD 0.7 million gain in the prior year, and investment tax credits rose to CAD 3.7 million from CAD 3.3 million.
Perhaps most notably, cash and bank indebtedness dropped sharply to CAD 2.5 million at quarter-end from CAD 19.1 million at the end of April. Cash from operations was just CAD 0.8 million after a CAD 16 million negative swing in non-cash working capital and current taxes; excluding those changes, operational cash generation was CAD 16.8 million. Nearly all of the financing outflow was driven by CAD 15.5 million in dividends paid.
International revenue climbed 17.5% to CAD 38.3 million, up CAD 4.6 million from CAD 32.7 million, now representing 32% of total sales. U.S.-Canadian regional revenue was essentially flat at CAD 79.9 million versus CAD 79.5 million a year ago.
Backlog provided a bright spot. CEO Brian Campbell said purchase orders at the end of August exceeded CAD 259 million, including individual contracts in the CAD 5 million to CAD 10 million range, and combined with CAD 30 million in August shipments, the company pointed to more than CAD 289 million in forward visibility. There were 87 customer orders exceeding CAD 200,000, with the top 10 customers accounting for roughly 49% of sales and no single customer exceeding 10%.
Moore noted that supply chain lead times for AI-driven demand on memory, storage and server components had been extended during the quarter, but said the company was not currently experiencing part shortages or constraints. On tariffs, Moore added that Evertz was not being materially impacted, as most products are protected under USMCA and current tariff codes do not align with duties being applied to the company's products.
The board declared a regular quarterly dividend of CAD 0.205 per share, maintaining a payout streak of 20 consecutive years and a dividend yield of 6.33%. Shares were unchanged at CAD $14.85 in after-hours trading, some 23.1% above their 52-week low of $12 and 31.0% below their 52-week high of $21.5.
Evertz has approximately 75.7 million shares outstanding, with another 4 million in options and RSUs. Weighted-average fully diluted shares were 77.6 million.
Government and defense revenue accounted for approximately 5% to 6% of the quarter's total.
The earnings call took place on September 14, 2026, with participation from analysts including Thanos Moschopoulos of BMO Capital Markets and Paul Treiber of RBC Capital Markets.
