Toronto, Ontario--(Newsfile Corp. - May 27, 2026) - NTG Clarity Networks Inc. (TSXV: NCI) (OTC Pink: NYWKF); NTG Clarity ("NTG" or the "Company") today reported its results for the first quarter ended March 31, 2026 (all figures in Canadian Dollars).
Q1 2026 Highlights
All comparisons below are to the quarter ended March 31, 2025, unless otherwise noted
- Revenue grew 8.1% year over year to $21.3 million, reflecting continued growth across the existing client base. Ramadan and Eid al-Fitr fell entirely within Q1 2026, reducing billable hours and deferring project activity during the final five weeks of the quarter.
- Gross Profit rose 4.4% year-over-year to $7.0 million, representing 33.0% of revenue, compared to $6.7 million and 34.2% in the prior year. The margin compression reflects reduced staff utilization during Ramadan, consistent with the Company's historical pattern in Ramadan-affected quarters.
- Net Income was $1.0 million, or 4.6% of revenue, compared to $2.1 million or 10.6% in the prior year. The prior year included a $595,000 foreign exchange gain. The current quarter includes a $668,000 non-recurring deferred tax recovery related to the conversion of the Company's Saudi branch to an LLC structure. Excluding these items in both periods, the year-over-year comparison is more closely aligned with the movement in operating results.
- Adjusted EBITDA was $0.8 million, or 3.6% of revenue, compared to $2.9 million, or 14.6%, in the prior year. Through 2025 the Company built a delivery and support base sized for materially higher revenue. In the first quarter that base operated at low utilization through the seasonally softest period of the year, which compressed margin. The cost base is largely fixed and already in place, and combined cost of sales, general and administrative and sales and marketing expenses were approximately flat sequentially. As revenue normalizes against that base through the balance of the year, the Company expects the operating leverage to convert into stronger margins.
- Operating Cash Flow was positive $43,000 for the quarter, reflecting lower working capital investment.
"Q1 2026 marked our twentieth consecutive quarter of trailing twelve-month revenue growth, against a backdrop of regional uncertainty and a Ramadan period that fell entirely within the quarter. Revenue of $21.3 million grew 8.1 percent year-over-year, and operating cash flow remained positive - holding the improvement delivered in Q4 2025 through a seasonally softer quarter," said Adam Zaghloul, Vice President of Strategy & Planning at NTG Clarity.
"We spent 2025 building a cost base for materially higher revenue, and Q1 ran that base through our seasonally softest quarter at low utilization. That is what compressed margin, not a change in the cost structure. The base is in place, our contracted backlog stands at $73 million, and as revenue normalizes through the year we expect that operating leverage to convert into stronger earnings."
Financial Outlook for 2026
Our 2026 guidance reflects a revenue floor and adjusted EBITDA margin supported by existing backlog expected to convert within 12 months, together with anticipated renewals based on historical trends.
- Revenue: Expected to be above $90 million
- Adjusted EBITDA Margin: 13 - 16%
Conference Call Details
On Thursday, May 28, 2026, at 9:00 AM ET, management will host a conference call webcast to discuss the Company's financial and operating results.
What: NTG Clarity Q1 2026 Earnings Call
When: Thursday, May 28, 2026, at 9:00 AM ET
Where: Live webcast can be accessed from the Events page of NTG's website:
https://ntgclarity.com/events/q1-2026-earnings-conference-call-ntg-clarity/
Management will be hosting a Q&A at the end of the call; however, to streamline the earnings conference call, we ask any questions to be emailed along with the asker's name and company, if applicable, by the end of the day Wednesday, May 27, 2026, to:
Adam Zaghloul, Vice President, Strategy & Planning
Email: adam@ntgclarity.com
Income Statement Highlights for the Quarter Ended March 31, 2026 and 2025
| March 31, 2026 | March 31, 2025 | |||||
| REVENUE | $ | 21,285,731 | $ | 19,699,129 | ||
| COST OF SALES | 14,256,212 | 12,966,584 | ||||
| GROSS PROFIT | $ | 7,029,519 | $ | 6,732,545 | ||
| SG&A | 6,404,629 | 3,987,221 | ||||
| (Gain) loss on foreign exchange | (25,794 | ) | (594,623 | ) | ||
| Other Expenses | 516,565 | 161,835 | ||||
| Exchange (gain) loss on translation | (348,034 | ) | (88,718 | ) | ||
| (Recovery) Provision for income taxes | (496,536 | ) | 1,172,168 | |||
| Comprehensive Income | $ | 978,689 | $ | 2,094,661 | ||
| per share (basic) | $ | 0.02 | $ | 0.05 | ||
| per share (fully diluted) | $ | 0.02 | $ | 0.04 | ||
Balance Sheet Highlights
| March 31, 2026 | December 31, 2025 | |||||
| Total Assets | $ | 46,398,475 | $ | 45,593,092 | ||
| Total Liabilities | $ | 17,923,189 | $ | 18,180,961 | ||
| Shareholder's Equity | $ | 28,475,287 | $ | 27,412,131 | ||
Non-GAAP Financial Measures
NTG references Adjusted EBITDA, which is a non-IFRS (non-GAAP) measure and Adjusted EBITDA margin, which is a non-GAAP ratio. Adjusted EBITDA means adjusted earnings before interest, taxes, depreciation and amortization. EBITDA is equal to net income (loss) before income taxes plus finance costs plus depreciation. Adjusted EBITDA is equal to EBITDA before other discretionary expenses and expenses outside of the control of NTG. In NTG's case these are other income, share-based payments, and expenses related to foreign exchange. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of total revenue.
Adjusted EBITDA and Adjusted EBITDA margin are not recognized measures under IFRS. Management believes that in addition to net income (loss), Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental measures as they provide an indication of the results generated by the Company's primary business activities prior to consideration of how those activities are financed, amortized, or how the results are taxed and consolidated in various jurisdictions and currencies as well as the cash generated by the Company's primary business activities without consideration of the timing of the monetization of non-cash working capital items.
Readers should be cautioned, however, that Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of the Company's performance. The Company's method of calculating Adjusted EBITDA and Adjusted EBITDA margin may differ from other organizations and, accordingly, Adjusted EBITDA and Adjusted EBITDA margin may not be comparable to measures used by other organizations.
The non-IFRS measures referenced in this release reconcile to the IFRS measures reported in the Consolidated Financial Statements as follows, unless reconciled elsewhere:
| For the three months ended | ||||||
| Adjusted EBITDA | March 31, 2026 | March 31, 2025 | ||||
| Net Income (Margin) | $ | 978,689 (5%) | $ | 2,094,661 (11%) | ||
| Add back: | ||||||
| (Gain) loss on foreign exchange | (25,794 | ) | (594,623 | ) | ||
| Depreciation | 205,343 | 182,231 | ||||
| Amortization | 132,183 | 132,183 | ||||
| Interest, net | 52,962 | 60,095 | ||||
| Taxes | (496,536 | ) | 1,172,168 | |||
| Foreign Taxes | 13,102 | 13,709 | ||||
| Other income | (72,239 | ) | (94,200 | ) | ||
| Share-based payment | 40,117 | 0 | ||||
| Loss on joint venture | 277,280 | 0 | ||||
| Loss on disposal of assets | 0 | 0 | ||||
| Exchange (gain) arising on translation of foreign operations | (348,034 | ) | (88,718 | ) | ||
| Adjusted EBITDA (Margin) | $ | 757,073 (4%) | $ | 2,877,506 (15%) | ||
About NTG Clarity Networks Inc.
NTG Clarity Networks' vision is to be a global leader in digital transformation solutions. As a Canadian company established in 1992, NTG Clarity has delivered software, networking, and IT solutions to large enterprises including financial institutions and network service providers. More than 1,400 IT and network professionals provide design, engineering, implementation, software development and security expertise to the industry's leading enterprises.
For Further Information:
Adam Zaghloul, Vice President, Strategy & Planning
NTG Clarity Networks Inc.
Ph: 905-305-1325
Fax: 905-752-0469
Email: adam@ntgclarity.com
Forward Looking Information
Certain statements in this release, other than statements of historical fact, are forward looking information that involve various risks and uncertainties. Forward looking information includes, but is not limited to, statements with respect to: financial guidance including anticipated revenue and adjusted EBITDA margin; anticipated activity levels and operating results; projections based on current backlog; corporate strategies; customer demand and competitive conditions in the markets in which the Company operates.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: future demand for the Company's products and services; the results of research and development activities; access to capital; intellectual property protection; general business, economic, competitive, political and social uncertainties; delays in obtaining governmental approvals; failure to obtain regulatory approvals; reliance on key personnel; stock market volatility; fluctuations in interest rates and exchange rates; and the impact of new laws and regulatory requirements. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about estimated annual revenue and adjusted EBITDA margin, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraph. The actual financial results of the Company may vary from the amounts set out herein and such variation may be material. NTG and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about the Company's anticipated future business operations on an annual basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/299081
Source: NTG Clarity Networks Inc.