Q1 2025 Quarterhill Inc Earnings Call Transcript
Key Points
- Quarterhill Inc (QTRHF) reported a significant new contract in Q1 with ACTC valued at USD40 million, with options to extend an additional 4 years at USD15 million.
- The company's safety and enforcement unit continues to perform well, delivering solid top-line growth and strong margins in Q1.
- Quarterhill Inc (QTRHF) has a contracted revenue backlog of USD476 million, providing good visibility into future revenue.
- The company is making progress in its transition to a more software-focused business, which is expected to drive higher margins and create recurring revenue streams.
- Quarterhill Inc (QTRHF) received a USD3.2 million dividend from its 10% ownership in WiLAN, which will positively contribute to its cash position in Q2 2025.
- Q1 revenue was USD33.9 million, down USD1 million from the same quarter last year, primarily due to the timing of revenue from ongoing projects.
- Adjusted EBITDA for Q1 was negative USD3.4 million, significantly impacted by two legacy tolling contracts that are currently in renegotiation.
- Gross margin percentage decreased to 12% in Q1 from 20% in the same quarter last year, primarily due to poor margins on the two noted tolling projects.
- The company is facing challenges with two tolling contracts that negatively impacted adjusted EBITDA by USD3.2 million in Q1 2025.
- Quarterhill Inc (QTRHF) ended the quarter with cash and cash equivalents of USD26.1 million, down from USD31.9 million at the end of 2024.
Good morning and welcome to Quarterhills Q1 2025 financial results conference call. On this morning's call, we have Chuck Myers, CEO, and Morgan Demke, interim Chief Financial Officer. At this time, all participants are in a listen-only mode. Following management's presentation, we will conduct a question-and-answer session during which analysts are invited to ask questions. To ask a question, please press the star one on your touchstone phone to register. Should you require any assistance during the call, please press 0. Earlier this morning, Quarter Hill issued a new release announcing its financial results for the quarter ended March 31, 2025. This news release, along with the company's MD&A and financial statements are available on Quarter Hill's website and on Sedar plus. Certain matters discussed during today's conference call or answers that may be given to questions could constitute forward-looking statements. Actual results could differ materially from those anticipated. Risk factors that could affect results are detailed in the company's annual information form and other public filings that
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