Enghouse Releases Fourth Quarter and Year End Results

Dec 15 2025 22:00 GMT

MARKHAM, ON , Dec. 15, 2025 /CNW/ - Enghouse Systems Limited(TSX: ENGH) announces its fourth quarter (unaudited) and audited year-end financial results for the period ended October 31, 2025. All figures are denominated in Canadian dollars unless otherwise indicated.

Fourth Quarter and Annual Financial Highlights:

Revenue was $124.5 million as compared to $125.7 million in the fourth quarter last year and for the fiscal year was $498.9 million compared to $502.5 million last year;
Recurring revenue, which includes SaaS and maintenance services, was $86.1 million compared to $88.2 million in Q4 2024, and represents 69.2% of total revenue. For the fiscal year, recurring revenue was $348.0 million compared to $346.6 million in the prior year, as we continue to prioritize this revenue stream;
Results from operating activities were $31.0 million compared to $33.4 million in Q4 2024 and decreased in the fiscal year to $114.4 million from $133.8 million;
Net income was $21.1 million compared to $22.6 million in Q4 2024 and $73.7 million in the fiscal year compared to $81.3 million last year;
Adjusted EBITDA was $33.7 million compared to $35.6 million in Q4 2024, while achieving a 27.0% margin. Adjusted EBITDA was $127.6 million in the fiscal year compared to $143.8 million in the prior year, while achieving a 25.6% margin;
Net cash provided by operating activities, excluding changes in working capital and income taxes paid, was $35.3 million compared to $40.3 million in Q4 2024 and $129.5 million for the fiscal year compared to $151.8 million in the prior year. Cash, cash equivalents and short-term investments were $269.1 million as at October 31, 2025.

Fiscal 2025 unfolded amid significant economic, technological, and geopolitical shifts, including a rapidly evolving AI landscape and heightened global uncertainty from tariffs. Despite these conditions, Enghouse delivered steady performance and continued progress on strategic priorities. Revenue remained stable at $498.9 million, supported by a diversified portfolio and a recurring revenue base representing approximately 69% of total revenue, providing predictability and insulation from broader market volatility.

Throughout the year, the Company emphasized operational discipline and efficiency, advancing restructuring and cost-alignment initiatives to maintain profitability. These actions contributed to improving adjusted EBITDA in the fourth quarter and are expected to support further benefits in the coming year. Enghouse generated strong net cash provided by operating activities and maintained a robust financial position, closing the year with $269.1 million in cash and no external debt. Capital was deployed toward shareholder returns through dividends and share repurchases, as well as into three strategic acquisitions that expanded geographic reach and strengthened transportation product capabilities in communications and mobility solutions.

Subsequent to year-end, the Company acquired Sixbell Telco's telecommunications division, expanding its presence in the Latin American market. Sixbell Telco provides a comprehensive suite of software platforms that enable service providers to modernize and transform their networks.

Looking ahead to fiscal 2026, Enghouse remains focused on strengthening its recurring revenue base, advancing operational efficiency, and pursuing acquisitions in an environment that offers attractive opportunities. With a flexible solution portfolio, disciplined cost management and a strong cash position, the Company is well positioned to navigate ongoing volatility while delivering predictable performance and long-term shareholder value.

Quarterly dividends:
Today, the Board of Directors approved the Company's eligible quarterly dividend of $0.30 per common share payable on February 27, 2026 to shareholders of record at the close of business on February 13, 2026.

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

For the period ended October 31	Three months (Unaudited)						Twelve months
For the period ended October 31		2025		2024	Var ($)	Var (%)		2025		2024	Var ($)	Var (%)
Revenue	$	124,482	$	125,702	(1,220)	(1.0)	$	498,878	$	502,505	(3,627)	(0.7)

Direct costs		45,728		44,967	761	1.7		181,585		175,586	5,999	3.4
Revenue, net of direct costs	$	78,754	$	80,735	(1,981)	(2.5)	$	317,293	$	326,919	(9,626)	(2.9)
As a % of revenue		63.3 %		64.2 %				63.6 %		65.1 %

Operating expenses		47,160		47,133	27	0.1		197,867		191,464	6,403	3.3
Special charges		572		169	403	238.5		5,072		1,609	3,463	215.2
Results from operating activities	$	31,022	$	33,433	(2,411)	(7.2)	$	114,354	$	133,846	(19,492)	(14.6)
As a % of revenue		24.9 %		26.6 %				22.9 %		26.6 %

Amortization of acquired software and customer relationships		(6,685)		(9,322)	2,637	28.3		(29,492)		(40,505)	11,013	27.2
Foreign exchange (losses) gains		(145)		1,870	(2,015)	107.8		(2,378)		(1,680)	(698)	(41.5)
Interest expense – lease obligations		(114)		(126)	12	9.5		(505)		(556)	51	9.2
Finance income		2,017		2,825	(808)	(28.6)		8,041		10,121	(2,080)	(20.6)
Finance expenses		(55)		(8)	(47)	(587.5)		(98)		(49)	(49)	(100.0)
Other (expense) income		(8)		(424)	416	98.1		1,617		89	1,528	1716.9
Income before income taxes	$	26,032	$	28,248	(2,216)	(7.8)	$	91,539	$	101,266	(9,727)	(9.6)
Provision for income taxes		4,904		5,607	(703)	(12.5)		17,873		19,938	(2,065)	(10.4)
Net Income for the period	$	21,128	$	22,641	(1,513)	(6.7)	$	73,666	$	81,328	(7,662)	(9.4)

Basic earnings per share		0.38		0.41	(0.03)	(7.3)		1.34		1.47	(0.13)	(8.8)
Diluted earnings per share		0.38		0.41	(0.03)	(7.3)		1.34		1.47	(0.13)	(8.8)

Net cash provided by operating activities		19,627		31,583	(11,956)	(37.9)		104,634		132,071	(27,437)	(20.8)
Net cash provided by operating activities excluding changes in working capital and income taxes paid		35,325		40,270	(4,945)	(12.3)		129,503		151,803	(22,300)	(14.7)

Adjusted EBITDA
Results from operating activities		31,022		33,433	(2,411)	(7.2)		114,354		133,846	(19,492)	(14.6)

Depreciation		624		655	(31)	(4.7)		2,518		2,347	171	7.3
Depreciation of right-of-use assets		1,443		1,375	68	4.9		5,644		5,981	(337)	(5.6)
Special charges		572		169	403	238.5		5,072		1,609	3,463	215.2
Adjusted EBITDA	$	33,661	$	35,632	(1,971)	(5.5)	$	127,588	$	143,783	(16,195)	(11.3)

Adjusted EBITDA margin		27.0 %		28.3 %				25.6 %		28.6 %

Adjusted EBITDA per diluted share	$	0.61	$	0.64	( 0.03)	(4.7)	$	2.31	$	2.60	( 0.29)	(11.2)

Enghouse Systems Limited

Consolidated Statements of Financial Position
(in thousands of Canadian dollars)	As at October 31, 2025		As at October 31, 2024
ASSETS
Current assets:
Cash and cash equivalents	$	269,061	$	274,240
Short-term investments		25		487
Accounts receivable		88,980		92,348
Prepaid expenses and other assets		17,001		16,100
		375,067		383,175
Non-current assets:
Property and equipment		3,890		4,192
Right-of-use assets		11,453		11,473
Intangible assets		89,710		98,594
Goodwill		341,593		309,831
Deferred income tax assets		35,105		26,228
		481,751		450,318
	$	856,818	$	833,493

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	76,167	$	70,087
Income tax payable		10,662		5,525
Dividends payable		16,426		14,397
Provisions		2,013		1,834
Deferred revenue		108,268		114,080
Lease obligations		5,197		5,344
		218,733		211,267
Non-current liabilities:
Deferred income tax liabilities		13,439		10,500
Deferred revenue		6,791		8,094
Net employee defined benefit obligation		2,442		2,081
Lease obligations		5,944		5,744
		28,616		26,419
		247,349		237,686
Shareholders' equity
Share capital		116,894		118,217
Contributed surplus		11,110		9,764
Retained earnings		443,134		446,748
Accumulated other comprehensive income		38,331		21,078
		609,469		595,807
	$	856,818	$	833,493

Enghouse Systems Limited

Consolidated Statement of Operations and Comprehensive Income
(in thousands of Canadian dollars, except per share amounts)
	Three months		Twelve months
Periods ended October 31	2025 (Unaudited)	2024 (Unaudited)	2025	2024
Revenue
Software licenses	$ 15,480	$ 15,860	$ 67,436	$ 72,906
SaaS and maintenance services	86,121	88,196	347,995	346,579
Professional services	17,349	18,469	68,238	70,046
Hardware	5,532	3,177	15,209	12,974
	124,482	125,702	498,878	502,505
Direct costs
Software licenses	673	397	2,752	3,501
Services	43,019	43,043	172,357	165,221
Hardware	2,036	1,527	6,476	6,864
	45,728	44,967	181,585	175,586
Revenue, net of direct costs	78,754	80,735	317,293	326,919

Operating expenses
Selling, general and administrative	21,267	22,642	93,635	94,303
Research and development	23,826	22,461	96,070	88,833
Depreciation	624	655	2,518	2,347
Depreciation of right-of-use assets	1,443	1,375	5,644	5,981
Special charges	572	169	5,072	1,609
	47,732	47,302	202,939	193,073

Results from operating activities	31,022	33,433	114,354	133,846

Amortization of acquired software and customer relationships	(6,685)	(9,322)	(29,492)	(40,505)
Foreign exchange (losses) gains	(145)	1,870	(2,378)	(1,680)
Interest expense – lease obligations	(114)	(126)	(505)	(556)
Finance income	2,017	2,825	8,041	10,121
Finance expenses	(55)	(8)	(98)	(49)
Other (expense) income	(8)	(424)	1,617	89
Income before income taxes	26,032	28,248	91,539	101,266

Provision for income taxes	4,904	5,607	17,873	19,938

Net income for the period	$ 21,128	$ 22,641	$ 73,666	$ 81,328
Items that may be subsequently reclassified to income:
Cumulative translation adjustment	8,938	2,882	17,253	10,249

Other comprehensive income	8,938	2,882	17,253	10,249

Comprehensive income	$ 30,066	$ 25,523	$ 90,919	$ 91,577
Earnings per share
Basic	$ 0.38	$ 0.41	$ 1.34	$ 1.47
Diluted	$ 0.38	$ 0.41	$ 1.34	$ 1.47

Enghouse Systems Limited

Consolidated Statements of Cash Flows
(in thousands of Canadian dollars)	Three months		Twelve months
Periods ended October 31	2025 (Unaudited)	2024 (Unaudited)	2025	2024
OPERATING ACTIVITIES
Net income for the period	$ 21,128	$ 22,641	$ 73,666	$ 81,328
Adjustments for non-cash items
Adjustments for non-cash items
Depreciation	624	655	2,518	2,347
Depreciation of right-of-use assets	1,443	1,375	5,644	5,981
Interest expense – lease obligations	114	126	505	556
Amortization of acquired software and customer relationships	6,685	9,322	29,492	40,505
Stock-based compensation expense	364	112	1,324	1,188
Provision for income taxes	4,904	5,607	17,873	19,938
Finance expenses and other (income) expense	63	432	(1,519)	(40)
	35,325	40,270	129,503	151,803

Changes in non-cash operating working capital	(10,031)	(7,674)	(6,361)	(7,920)
Income taxes paid	(5,667)	(1,013)	(18,508)	(11,812)
Net cash provided by operating activities	19,627	31,583	104,634	132,071

INVESTING ACTIVITIES
Purchase of property and equipment, net	(300)	(516)	(1,479)	(1,977)
Acquisitions, net of cash acquired*	-	-	(33,399)	(43,448)
Proceeds from sale of short-term investments	75	-	75	-
Recovery of purchase consideration for prior-year acquisitions	-	-	-	171
Net cash used in investing activities	( 225)	( 516)	(34,803)	(45,254)

FINANCING ACTIVITIES
Issuance of share capital	-	2,990	-	9,085
Normal course issuer bid share repurchases	(7,213)	(3,088)	(14,742)	(5,994)
Repayment of lease obligations	(1,304)	(1,283)	(6,074)	(7,030)
Dividends paid	(16,526)	(14,397)	(61,810)	(53,139)
Net cash used in financing activities	(25,043)	(15,778)	(82,626)	(57,078)
Impact of foreign exchange on cash and cash equivalents	3,221	1,238	7,616	4,969

(Decrease) increase in cash and cash equivalents	(2,420)	16,527	(5,179)	34,708
Cash and cash equivalents - beginning of period	271,481	257,713	274,240	239,532
Cash and cash equivalents - end of period	$ 269,061	$ 274,240	$ 269,061	$ 274,240

* Acquisitions are net of cash acquired of nil and $9,287 for the quarter and year ended October 31, 2025, respectively and nil and $742 for the quarter and year ended October 31, 2024, respectively.

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

For the period ended October 31, 2025		Three months (Unaudited)							Twelve months
For the period ended October 31, 2025		IMG		AMG		Total			IMG	AMG		Total
Revenue	$		68,795	$	55,687	$	124,482	$	285,760	$	213,118	$	498,878
Direct costs			(23,787)		(21,941)		(45,728)		(100,133)		(81,452)		(181,585)
Revenue, net of direct costs			45,008		33,746		78,754		185,627		131,666		317,293
Operating expenses excluding special charges			(21,232)		(14,432)		(35,664)		(90,066)		(55,625)		(145,691)
Depreciation			(290)		(334)		(624)		(1,441)		(1,077)		(2,518)
Depreciation of right-of-use assets			(867)		(576)		(1,443)		(3,568)		(2,076)		(5,644)
Segment profit	$		22,619	$	18,404	$	41,023	$	90,552	$	72,888	$	163,440
Special charges							(572)						(5,072)
Corporate and shared service expenses							(9,429)						(44,014)
Results from operating activities						$	31,022					$	114,354

For the period ended October 31, 2024		Three months (Unaudited)							Twelve months
For the period ended October 31, 2024		IMG		AMG		Total			IMG	AMG		Total
Revenue	$		74,731	$	50,971	$	125,702	$	308,920	$	193,585	$	502,505
Direct costs			(25,900)		(19,067)		(44,967)		(102,390)		(73,196)		(175,586)
Revenue, net of direct costs			48,831		31,904		80,735		206,530		120,389		326,919
Operating expenses excluding special charges			(21,235)		(13,071)		(34,306)		(90,871)		(47,238)		(138,109)
Depreciation			(416)		(239)		(655)		(1,574)		(773)		(2,347)
Depreciation of right-of-use assets			(940)		(435)		(1,375)		(3,870)		(2,111)		(5,981)
Segment profit	$		26,240	$	18,159	$	44,399	$	110,215	$	70,267	$	180,482
Special charges							(169)						(1,609)
Corporate and shared service expenses							(10,797)						(45,027)
Results from operating activities						$	33,433					$	133,846

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 Tuesday, December 16, 2025 at 8:45 a.m. EST. To participate, please call +1-289-514-5100 or North American Toll-Free +1-800-717-1738. Confirmation code: 17364 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

Company Announcements

Enghouse Releases Fourth Quarter and Year End Results