Q3 2026 Enwave Corp Earnings Call Transcript
Key Points
- Q3 revenue increased 21% year-over-year to CAD3.33 million, with gross margin up 6 points to 25%.
- Base royalties grew 24% year-over-year to CAD536,000, and normalized base royalties (excluding a one-time adjustment) reached approximately CAD600,000, the highest ever in a quarter.
- Management expects royalties to approach CAD3 million in fiscal 2027, nearly double the CAD1.5 million collected three years ago.
- Signed three new licenses (Rhizome, Dry Hub of Egypt, University of Limerick) and two technology evaluation agreements (Swiss Cannabis Selection, General Mills), expanding global reach and commercial pipeline.
- Repeat order from Procesere for a second 120-kW REV machine validates the technology and business model, and the company is targeting over CAD1 million in expense reductions by fiscal 2028 to move toward sustainable profitability.
- Adjusted EBITDA remained negative at a loss of CAD93,000 in Q3, though improved from a CAD575,000 loss in the prior year.
- Royalty revenue was reduced by a one-time CAD62,000 adjustment due to an overpayment by MicroDried, indicating billing or calculation issues.
- Large-scale machine orders have been delayed, with one opportunity lost to a cheaper air-drying alternative, and others pushed into fiscal 2027.
- Cash position is tight at CAD2.5 million, with CAD1.9 million drawn on the credit facility and only CAD360,000 undrawn availability.
- Inventory increased 118% to CAD3 million, primarily due to a pre-built 100-kW machine that remains unsold, tying up capital and reflecting uncertain order timing.
Good morning and welcome to EnWave Corporation's third-quarter 2026 earnings conference call. My name is Melissa, and I will be your operator for today's call. Joining us for today's presentation are the company's President and CEO, Brent Charleton; and Nav Dhami, EnWave's CFO. (Operator Instructions)
Finally, I would like to remind everyone that this call will be made available for replay via a link in the Investor Relations section of the company's website at www.enwave.net.
Now, I'd like to turn the call over to EnWave's CEO, Mr. Brent Charlton. Please go ahead.
Thanks very much, and thanks again to everyone who have joined us today for EnWave Q3 fiscal 2026 quarterly conference call. Q3 was a much better quarter than the first two fiscal of 2026 quarters, given we recognize the revenue tied to the sale of a pre-built 120-kilowatt radiant energy vacuum machine to process here, our valued Mexican royalty
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