Enghouse Releases Third Quarter Results

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Enghouse Releases Third Quarter Results

Canada NewsWire

MARKHAM, ON, Sept. 10, 2026

MARKHAM, ON, Sept. 10, 2026 /CNW/ -- Enghouse Systems Limited (TSX: ENGH) announces third quarter (unaudited) financial results for the period ended July 31, 2026. All figures are denominated in Canadian dollars unless otherwise indicated.

Third Quarter Financial Highlights:

  • Revenue was $117.6 million as compared to $125.6 million in Q3 2025 and for the nine-month period was $352.0 million compared to $374.4 million last year;
  • Recurring revenue, which includes SaaS and maintenance services, was $81.7 million compared to $87.8 million in Q3 2025, and represents 69.5% of total revenue. For the nine-month period, recurring revenue was $245.4 million compared to $261.9 million in the prior period, and represents 69.7% of total revenue;
  • Results from operating activities were $24.5 million compared to $27.3 million in Q3 2025 and for the nine-month period were $76.4 million compared to $83.3 million in the prior year;
  • Net income was $15.4 million compared to $17.2 million in Q3 2025. For the nine-month period, net income was $49.2 million compared to $52.5 million in the prior period;
  • Adjusted EBITDA was $30.8 million compared to $32.3 million in Q3 2025, while achieving a 26.2% margin. For the nine-month period, Adjusted EBITDA was $88.4 million compared to $93.9 million in the prior year;
  • Net cash provided by operating activities, excluding changes in working capital and income taxes paid, was $28.4 million compared to $30.9 million in Q3 2025 and was $88.5 million for the nine-month period compared to $94.2 million last year. Cash, cash equivalents and short-term investments were $267.8 million as at July 31, 2026.

During the quarter, Enghouse continued to operate in an environment shaped by evolving economic conditions, shifting trade dynamics, geopolitical developments and the ongoing impact of artificial intelligence on businesses worldwide. Against this backdrop, we remained focused on what we can control by executing our strategy, supporting our customers' critical operations, and enhancing our portfolio through targeted investments and innovation.

Revenue increased compared to the second quarter of fiscal 2026, reflecting improved business activity and the timing of certain transactions during the period. While some areas of the business continue to experience normal customer turnover and variability in software license and hardware demand, our recurring revenue streams remain a significant contributor to overall performance. The quarter reflects the benefits of our diversified portfolio, broad customer base, and disciplined approach to managing the business through uncertain market conditions.

As committed, we took steps to strengthen the Company's operating profile and long-term earnings potential. During the quarter, we implemented further actions to better align our cost structure with current activity levels and streamline operations across the Company, taking a $4.6 million restructuring charge. Operating expenses, excluding special charges, were $45.7 million compared to $49.9 million in the prior year, reflecting progress in our cost optimization efforts, with additional benefits expected to be realized in future periods.

Enghouse ended the quarter with $267.8 million in cash, cash equivalents, and short-term investments, and no external debt. During the third quarter we paid dividends of $16.9 million and completed share buybacks of $7.5 million. The Company's financial strength continues to provide significant strategic flexibility, allowing us to invest in our business, pursue acquisition opportunities, return capital to shareholders, and respond to changing market opportunities as they arise.

Quarterly dividends:
Today, the Board of Directors approved an eligible quarterly dividend of $0.31 per common share, payable on November 27, 2026, to shareholders of record at the close of business on November 13, 2026.

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

 

For the periods ended July 31

Three months


Nine months


2026


2025

Var ($)

Var (%)



2026


2025

Var ($)

Var (%)

Revenue

$

117,576

$

125,577

(8,001)

(6.4)


$

351,951

$

374,396

(22,445)

(6.0)















Direct costs


42,742


45,409

(2,667)

(5.9)



131,547


135,857

(4,310)

(3.2)

Revenue, net of direct costs

$

74,834

$

80,168

(5,334)

(6.7)


$

220,404

$

238,539

(18,135)

(7.6)

As a % of revenue


63.6 %


63.8 %





62.6 %


63.7 %

















Operating expenses


45,722


49,905

(4,183)

(8.4)



137,555


150,707

(13,152)

(8.7)

Special charges


4,645


3,008

1,637

54.4



6,482


4,500

1,982

44.0

Results from operating activities

$

24,467

$

27,255

(2,788)

(10.2)


$

76,367

$

83,332

(6,965)

(8.4)

As a % of revenue


20.8 %


21.7 %





21.7 %


22.3 %

















Amortization of acquired software and
customer relationships


(6,143)


(7,032)

889

12.6



(18,950)


(22,807)

3,857

16.9

Foreign exchange gains (losses)


333


(580)

913

157.4



569


(2,233)

2,802

125.5

Interest expense – lease obligations


(110)


(132)

22

16.7



(343)


(391)

48

12.3

Finance income


1,719


1,807

(88)

(4.9)



4,878


6,024

(1,146)

(19.0)

Finance expenses


(2)


(16)

14

87.5



(77)


(43)

(34)

(79.1)

Other (expenses) income


(415)


125

(540)

(432.0)



1,040


1,625

(585)

(36.0)

Income before income taxes

$

19,849

$

21,427

(1,578)

(7.4)


$

63,484

$

65,507

(2,023)

(3.1)

Provision for income taxes


4,472


4,254

218

5.1



14,319


12,969

1,350

10.4

Net Income for the period

$

15,377

$

17,173

(1,796)

(10.5)


$

49,165

$

52,538

(3,373)

(6.4)















Basic earnings per share


0.28


0.31

(0.03)

(9.7)



0.90


0.95

(0.05)

(5.3)

Diluted earnings per share


0.28


0.31

(0.03)

(9.7)



0.90


0.95

(0.05)

(5.3)















Net cash provided by operating activities   


22,475


27,087

(4,612)

(17.0)



74,828


85,007

(10,179)

(12.0)

Net cash provided by operating activities
excluding changes in working capital and
income taxes paid


28,443


30,894

(2,451)

(7.9)



88,539


94,178

(5,639)

(6.0)















Adjusted EBITDA














Results from operating activities


24,467


27,255

(2,788)

(10.2)



76,367


83,332

(6,965)

(8.4)















Depreciation


597


594

3

(0.5)



1,804


1,894

(90)

4.8

Depreciation of right-of-use assets


1,094


1,393

(299)

21.5



3,764


4,201

(437)

10.4

Special charges


4,645


3,008

1,637

(54.4)



6,482


4,500

1,982

(44.0)

Adjusted EBITDA

$

30,803

$

32,250

(1,447)

(4.5)


$

88,417

$

93,927

(5,510)

(5.9)















Adjusted EBITDA margin


26.2 %


25.7 %





25.1 %


25.1 %

















Adjusted EBITDA per diluted share

$

0.57

$

0.58

(0.01)

(1.7)


$

1.62

$

1.70

(0.08)

(4.7)

Enghouse Systems Limited

Condensed Consolidated Interim Statements of Financial Position

(in thousands of Canadian dollars)

(unaudited)


   As at July 31,
2026

As at October 31,
2025

ASSETS






Current assets:






   Cash and cash equivalents


$

267,786

$

269,061

   Short-term investments



23


25

   Accounts receivable



74,266


88,980

   Prepaid expenses and other assets



13,199


17,001




355,274


375,067

Non-current assets:






   Property and equipment



3,510


3,890

   Right-of-use assets



8,573


11,453

   Intangible assets



75,438


89,710

   Goodwill



344,454


341,593

   Deferred income tax assets



36,132


35,105




468,107


481,751



$

823,381

$

856,818







LIABILITIES AND SHAREHOLDERS' EQUITY                    






Current liabilities:






   Accounts payable and accrued liabilities


$

57,496

$

76,167

   Income taxes payable



6,195


10,662

   Dividends payable



16,709


16,426

   Provisions



5,179


2,013

   Deferred revenue



111,469


108,268

   Lease obligations



4,015


5,197




201,063


218,733

Non-current liabilities:






   Deferred income tax liabilities



13,003


13,439

   Deferred revenue



4,753


6,791

   Net employee defined-benefit obligation



2,450


2,442

   Lease obligations



4,009


5,944




24,215


28,616




225,278


247,349

 

Shareholders' equity:






   Share capital



115,071


116,894

   Contributed surplus



12,304


11,110

   Retained earnings



429,576


443,134

   Accumulated other comprehensive income



41,152


38,331




598,103


609,469



$

823,381

$

856,818

Enghouse Systems Limited

Condensed Consolidated Interim Statements of Operations and Comprehensive Income

(in thousands of Canadian dollars, except per share amounts)



(unaudited)                                            


Three months

Nine months

Periods ended July 31


2026

2025

2026

2025







Revenue

     Software licenses


 

$  17,349

$  17,290

 

$  49,267

$  51,956

     SaaS and maintenance services


81,675

87,753

245,399

261,874

     Professional services


16,427

17,156

48,942

50,889

     Hardware


2,125

3,378

8,343

9,677



117,576

125,577

351,951

374,396

Direct costs






     Software licenses


671

640

1,778

2,079

     Services


40,942

43,410

125,613

129,338

     Hardware


1,129

1,359

4,156

4,440



42,742

45,409

131,547

135,857

Revenue, net of direct costs


74,834

80,168

220,404

238,539







Operating expenses






     Selling, general and administrative


22,468

23,752

65,854

72,368

     Research and development


21,563

24,166

66,133

72,244

     Depreciation


597

594

1,804

1,894

     Depreciation of right-of-use assets


1,094

1,393

3,764

4,201

     Special charges


4,645

3,008

6,482

4,500



50,367

52,913

144,037

155,207







Results from operating activities


24,467

27,255

76,367

83,332







Amortization of acquired software and customer relationships          


(6,143)

(7,032)

(18,950)

(22,807)

Foreign exchange gains (losses)


333

(580)

569

(2,233)

Interest expense – lease obligations


(110)

(132)

(343)

(391)

Finance income


1,719

1,807

4,878

6,024

Finance expenses


(2)

(16)

(77)

(43)

Other (expenses) income


(415)

125

1,040

1,625

Income before income taxes


19,849

21,427

63,484

65,507







Provision for income taxes


4,472

4,254

14,319

12,969






Net income for the period


15,377

17,173

49,165

52,538

 

Item that may be subsequently reclassified to income:





Cumulative translation adjustment


10,200

1,928

2,821

8,316







Other comprehensive income


10,200

1,928

2,821

8,316







Comprehensive income


$  25,577

$    19,101

$  51,986

$  60,854

Earnings per share






Basic


$      0.28

$      0.31

$      0.90

$      0.95

Diluted


$      0.28

$      0.31

$      0.90

$      0.95

Enghouse Systems Limited

Condensed Consolidated Interim Statements of Cash Flows

(in thousands of Canadian dollars)

(unaudited)


 

Three months

 

Nine months

Periods ended July 31


2026

2025

2026

2025

 

OPERATING ACTIVITIES






Net income for the period


$    15,377

$    17,173

$    49,165

$    52,538

 

Adjustments for non-cash items











   Depreciation


597

594

1,804

1,894

   Depreciation of right-of-use assets


1,094

1,393

3,764

4,201

   Interest expense – lease obligations


110

132

343

391

   Amortization of acquired software and customer relationships  


6,143

7,032

18,950

22,807

   Stock-based compensation expense


233

425

1,157

960

   Provision for income taxes


4,472

4,254

14,319

12,969

   Finance expenses and other (income) expenses


417

(109)

(963)

(1,582)



28,443

30,894

88,539

94,178







Changes in non-cash operating working capital


133

(700)

7,472

3,670

Income taxes paid


(6,101)

(3,107)

(21,183)

(12,841)

Net cash provided by operating activities


22,475

27,087

74,828

85,007







INVESTING ACTIVITIES






Purchase of property and equipment, net


(250)

(372)

(1,374)

(1,179)

Acquisitions, net of cash acquired*


-

-

(5,524)

(33,399)

Payment of purchase consideration for prior-year acquisitions


(2,188)

-

(3,677)

-

Proceeds from sale of intangible assets


-

-

701

-

Net cash used in investing activities


(2,438)

( 372)

(9,874)

(34,578)







FINANCING ACTIVITIES






Normal course issuer bid share repurchases


(7,511)

(1,579)

(14,595)

(7,529)

Repayment of lease obligations


(1,120)

(1,561)

(3,984)

(4,770)

Dividends paid


(16,855)

(16,547)

(49,631)

(45,284)

Net cash used in financing activities


(25,486)

(19,687)

(68,210)

(57,583)

 

Impact of foreign exchange on cash and cash equivalents


3,535

1,168

1,981

 

4,395







(Decrease) increase in cash and cash equivalents


(1,914)

8,196

(1,275)

(2,759)

Cash and cash equivalents - beginning of period


269,700

263,285

269,061

274,240

Cash and cash equivalents - end of period


$  267,786

$  271,481

$  267,786

$  271,481

*Acquisitions are net of cash acquired of $Nil and $83 for the three and nine months ended July 31, 2026, respectively, and $Nil and $9,287 for the three and nine months ended July 31, 2025, respectively.

Enghouse Systems Limited

Segment Reporting Information
(in thousands of Canadian dollars)
(unaudited)

Three months ended July 31


2026


2025

IMG

AMG

Total

IMG

AMG

Total

Revenue

$

64,610

$

52,966

$

117,576

$

69,625

$

55,952

$

125,577

Direct costs


(22,053)


(20,689)


(42,742)


(24,822)


(20,587)


(45,409)

Revenue, net of direct costs


42,557


32,277


74,834


44,803


35,365


80,168

Operating expenses excluding special charges         


(20,105)


(13,032)


(33,137)


(22,230)


(14,259)


(36,489)

Depreciation


(340)


(257)


(597)


(356)


(238)


(594)

Depreciation of right-of-use assets


(592)


(502)


(1,094)


(865)


(528)


(1,393)

Segment profit

$

21,520

$

18,486

$

40,006

$

21,352

$

20,340

$

41,692

Special charges






(4,645)






(3,008)

Corporate and shared service expenses






(10,894)






(11,429)

Results from operating activities





$

24,467





$

27,255

 

Nine months ended July 31


2026


2025

IMG

AMG

Total

IMG

AMG

Total

Revenue

$

194,745

$

157,206

$

351,951

$

216,964

$

157,432

$

374,396

Direct costs


(67,362)


(64,185)


(131,547)


(76,346)


(59,511)


(135,857)

Revenue, net of direct costs


127,383


93,021


220,404


140,618


97,921


238,539

Operating expenses excluding special charges    


(62,443)


(39,353)


(101,796)


(68,833)


(41,194)


(110,027)

Depreciation


(980)


(824)


(1,804)


(1,151)


(743)


(1,894)

Depreciation of right-of-use assets


(2,219)


(1,545)


(3,764)


(2,701)


(1,500)


(4,201)

Segment profit

$

61,741

$

51,299

$

113,040

$

67,933

$

54,484

$

122,417

Special charges






(6,482)






(4,500)

Corporate and shared service expenses






(30,191)






(34,585)

Results from operating activities





$

76,367





$

83,332

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 Friday, September 11, 2026 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: 94138. 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