1. Q1 2025 revenue decreased to $33.9 million from $34.9 million in Q1 2024. 2. Adjusted EBITDA was ($3.4 million) due to tolling contract renegotiations. 3. Secured a $40 million renewal contract for Alameda CTC I-580 Express Lanes. 4. Cash used in operations improved to ($3.6 million) from ($10.1 million) YoY. 5. Revenue backlog stood at $476 million as of March 31, 2025.
Revenue drop and negative EBITDA raise concerns but backlog is strong.
The article highlights financial struggles but potential for future growth.
Future contract negotiations and operational improvements could stabilize finances.
("Quarterhill" or the "Company") (TSX: QTRH) (OTCQX: QTRHF), a leading provider of tolling and enforcement solutions in the Intelligent Transportation System ("ITS") industry, announces its financial results for the three months ended March 31, 2025. All financial information in this press release is reported in United States ("US") dollars, unless otherwise indicated.
"Q1 2025 results reflect our ongoing business transformation," said Chuck Myers, CEO at Quarterhill. "While performance was impacted by our seasonally slow first quarter and the two tolling contracts that are in renegotiation, we continue to make meaningful progress on our turnaround strategy, positioning us for long-term success. Despite challenges, our project operations once again delivered strong revenue growth and margins. In addition, we remain actively engaged in renegotiating the two tolling contracts that negatively impacted our Adjusted EBITDA by $3.2 million this quarter, with the goal of securing a favorable outcome that would improve our financial performance in future quarters."
Mr. Myers continued: "Beyond our operational progress, we benefited from a WiLAN dividend payment received after the quarter ended, which contributes positively to our cash position and will be reflected in our Q2 2025 financials. We remain confident in our ability to drive revenue growth and margin improvement as we move past the first quarter and progress through 2025, particularly as our contract renegotiations conclude and our operational enhancements and technology investment take fuller effect."
Quarterhill's Management's Discussion and Analysis and Financial Statements for the three months ended March 31, 2025 are available at the Company's website and at its profile at SEDAR+.
Revenues for the three months ended March 31, 2025, were $33.9 million compared to $34.9 million in the same period last year. The decrease in Q1 2025 revenue was due primarily to the timing of revenues received from certain tolling contracts, and offset, in part, by revenue growth from the enforcement operations. The two tolling contracts that are being renegotiated contributed $3.6 million to revenue in Q1 2025.
Gross profit as a value and as a percentage of revenues may be subject to significant variance in each reporting period due to the nature and type of contract and service work performed and currency volatility. Gross profit for the three months ended March 31, 2025, was $3.9 million, or 12%, as compared to $6.4 million, or 18%, in the same period last year. The decrease in Q1 2025 was primarily due to cost overruns on two tolling projects, and offset, in part, by continued strong margin performance from the enforcement operations.
Total operating expenses are comprised of selling, general and administrative costs ("SG&A"), research and development ("R&D") costs, depreciation, amortization of intangible assets and other charges. Total operating expenses for the three months ended March 31, 2025, were $11.2 million compared to $10.5 million in the same period last year. The Q1 2025 increase is primarily due to recruitment, technical consulting and facilities expenses, which was offset in part by a decrease in amortization expense and other charges.
Adjusted EBITDA for the three months ended March 31, 2025, was ($3.4) million compared to $0.2 million in the same period last year. The Q1 2025 decrease in Adjusted EBITDA compared to Q1 2024 was due to the factors impacting revenue, gross margin and expenses, as previously described. The two tolling contracts that are being renegotiated resulted in a reduction to Adjusted EBITDA of ($3.2) million in Q1 2025.
Net loss for the three months ended March 31, 2025, was ($8.4) million, or ($0.07) per diluted share, compared to a net loss of ($4.2) million, or ($0.04) per diluted share, in the same period last year.
Cash used in continuing operations for the three months ended March 31, 2025, was ($3.6) million compared to ($10.1) million in the same period last year.
Quarterhill will host a conference call to discuss its financial results on Thursday, May 15, 2025, at 10:00 AM Eastern Time.
To instantly join the conference call by phone, please use the following URL to easily register and be connected into the conference call automatically: https://emportal.ink/3RrbzAs
Telephone replay will be available from May 15, 2025, until May 22, 2025, at: 1.888.660.6345 (Toll Free North America) or 1.289.819.1450.
Conference ID: 47107 and Replay Passcode: 47107#
This news release contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws regarding Quarterhill. Such forward-looking statements relate to future events, conditions or future financial performance of Quarterhill based on future economic conditions and courses of action. All statements other than statements of historical fact may be forward-looking statements.
Quarterhill is a leading provider of tolling and enforcement solutions in the Intelligent Transportation System (ITS) industry. Our goal is technology-driven global leadership in ITS, via organic growth of our tolling and enforcement businesses, and by continuing an acquisition-oriented investment strategy that capitalizes on attractive growth opportunities within ITS and its adjacent markets. Quarterhill is listed on the TSX under the symbol QTRH and on the OTCQX Best Market under the symbol QTRHF. For more information: www.quarterhill.com.