Technology
Sapiens Reports Second Quarter 2024 Financial Results
Published
2 years agoon
By
ROCHELLE PARK, N.J., Aug. 1, 2024 /PRNewswire/ — Sapiens International Corporation, (NASDAQ: SPNS) (TASE: SPNS), a leading global provider of software solutions for the insurance industry, today announced its financial results for the second quarter ended June 30, 2024.
Summary Results for Second Quarter 2024 (USD in millions, except per share data)
GAAP
Non-GAAP
Q2 2024
Q2 2023
% Change
Q2 2024
Q2 2023
% Change
Revenue
$136.8
$128.3
6.6 %
$136.8
$128.4
6.6 %
Gross Profit
$60.1
$54.7
10.0 %
$62.5
$58.0
7.7 %
Gross Margin
43.9 %
42.6 %
130 bps
45.7 %
45.2 %
50 bps
Operating Income
$21.9
$19.6
11.5 %
$24.8
$23.4
6.1 %
Operating Margin
16.0 %
15.3 %
70 bps
18.2 %
18.2 %
0 bps
Net Income (*)
$18.6
$15.4
20.9 %
$21.0
$18.6
13.1 %
Diluted EPS
$0.33
$0.28
17.9 %
$0.37
$0.33
12.1 %
(*) Attributable to Sapiens’ shareholders
Roni Al-Dor, President and CEO of Sapiens, stated, “We are pleased to report that revenue reached $137 million this quarter, reflecting a 6.6% increase over the same period last year. This quarter non-GAAP demonstrated our strong execution capabilities, particularly with robust growth in North America and Europe. This quarter’s non-GAAP operating profit totaled $25 million, representing 18.2% of total revenue. Additionally, net income this quarter grew by 13%, and EPS per diluted share was $0.37 this quarter of 2024, up 12.1% from the second quarter of 2023″.
“We reiterate our 2024 guidance for non-GAAP revenues in a range of $550 million to $555 million and for non-GAAP operating margin in a range of 18.1%-18.5%,” concluded Mr. Al-Dor.
Quarterly Results Conference Call
Management will host a conference call and webcast on August 1, 2024, at 9:30 a.m. Eastern Time (4:30 p.m. in Israel) to review and discuss Sapiens’ results. Please call the following numbers (at least 10 minutes before the scheduled time) to participate:
North America (toll-free): 1-888-642-5032
International: 972-3-9180644
UK: 0-800-917-5108
The live webcast of the call can be viewed on Sapiens’ website at: https://veidan.activetrail.biz/sapiensq2-2024. A replay of the call will be available one business day following the completion of the event at the same link for 90 days.
Non-GAAP Financial Measures
This press release contains the following non-GAAP financial measures: non-GAAP revenue, ARR, non-GAAP gross profit, non-GAAP gross margin, non-GAAP operating income, non-GAAP operating margin, non-GAAP net income attributed to Sapiens shareholders, non-GAAP basic and diluted earnings per share, Adjusted EBITDA and Adjusted Free Cash-Flow.
Sapiens believes that these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to Sapiens’ financial condition and results of operations. The Company’s management uses these non-GAAP measures to compare the Company’s performance to that of prior periods for trend analyses, for purposes of determining executive and senior management incentive compensation and for budgeting and planning purposes. These measures are used in financial reports prepared for management and in quarterly financial reports presented to the Company’s board of directors. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating ongoing operating results and trends, and in comparing the Company’s financial measures with other software companies, many of which present similar non-GAAP financial measures to investors.
Non-GAAP financial measures consist of GAAP financial measures adjusted to exclude: Valuation adjustment on acquired deferred revenue, amortization of capitalized software development and other intangible assets, capitalization of software development, stock-based compensation, compensation related to acquisition and acquisition-related costs, restructuring and cost reduction costs, and tax adjustments related to non-GAAP adjustments.
Management of the Company does not consider these non-GAAP measures in isolation, or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations, as they reflect the exercise of judgment by management about which expenses and income are excluded or included in determining these non-GAAP financial measures.
To compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. Sapiens urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which it includes in press releases announcing quarterly financial results, including this press release, and not to rely on any single financial measure to evaluate the Company’s business.
Reconciliation tables of the most comparable GAAP financial measures to the non-GAAP financial measures used in this press release are included with the financial tables of this release.
The Company defines Annual Recurring Revenue (“ARR”) as the annualized value of our revenue from customer subscriptions, term licenses, maintenance, application maintenance, and cloud solutions, which may not be the same as the timing and amount of revenue recognized. The ARR run rate is equal to the product of (i) the sum of these revenues in our most recently completed fiscal quarter, multiplied by (ii) four.
The Company defines Adjusted EBITDA as net profit, adjusted to eliminate valuation adjustment on acquired deferred revenue, stock-based compensation expense, depreciation and amortization, capitalization of software development costs, compensation expenses related to acquisition and acquisition-related costs, restructuring and cost reduction costs, financial expense (income), provision for income taxes and other income (expenses). These amounts are often excluded by other companies as well, in order to help investors understand the operational performance of their business.
The Company uses Adjusted EBITDA as a measurement of its operating performance, because it assists in comparing the operating performance on a consistent basis by removing the impact of certain non-cash and non-operating items. Adjusted EBITDA reflects an additional way of viewing aspects of the operations that the Company believes, when viewed with the GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting its business. The Company uses Adjusted Free Cash-Flow as a measurement of its operating performance, and reconciles cash-flow from operating activities to Adjusted Free Cash-Flow, while reducing the amounts for capitalization of software development costs and capital expenditures. The Company adds back cash payments made for former acquisitions in respect of future performance targets and retention criteria as determined upon acquisition date of the respective acquired company, which were included in the cash-flow from operating activities. We believe that Adjusted Free Cash-Flow is useful in evaluating our business, because Adjusted Free Cash-Flow reflects the cash surplus available to fund the expansion of our business.
About Sapiens
Sapiens International Corporation (NASDAQ and TASE: SPNS) empowers the financial sector, with a focus on insurance, to transform and become digital, innovative, and agile. With more than 40 years of industry expertise, Sapiens’ cloud-based SaaS insurance platform offers pre-integrated, low-code capabilities across core, data and digital domains to accelerate our customers’ digital transformation. Serving over 600 customers in more than 30 countries, Sapiens offers insurers across property and casualty, workers’ compensation, and life insurance markets the most comprehensive set of solutions, from core to complementary, including Reinsurance, Financial & Compliance, Data & Analytics, Digital, and Decision Management. For more information visit www.sapiens.com or follow us on LinkedIn.
Investor and Media Contact
Yaffa Cohen-Ifrah
Chief Marketing Officer and Head of Investor Relations, Sapiens
Yaffa.cohen-ifrah@sapiens.com
+1 917-533-4782
Investor Contacts
Brett Maas
Managing Partner, Hayden IR
+1 646-536-7331
Brett.Maas@HaydenIR.com
Kimberly Rogers
Managing Director, Hayden IR
+1 541-904-5075
kim@HaydenIR.com
Forward Looking Statements
Certain matters discussed in this press release are forward-looking statements within the meaning of Section 27A of the Securities Act, Section 21E of the Exchange Act and the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, and are based on our beliefs, assumptions and expectations, as well as information currently available to us. Such forward-looking statements may be identified by the use of the words “anticipate,” “believe,” “estimate,” “expect,” “may,” “will,” “plan” and similar expressions. Such statements reflect our current views with respect to future events and are subject to certain risks and uncertainties. There are important factors that could cause our actual results, levels of activity, performance or achievements to differ materially from the results, levels of activity, performance or achievements expressed or implied by the forward-looking statements, including, but not limited to: the degree of our success in our plans to leverage our global footprint to grow our sales; the degree of our success in integrating the companies that we have acquired through the implementation of our M&A growth strategy; the lengthy development cycles for our solutions, which may frustrate our ability to realize revenues and/or profits from our potential new solutions; our lengthy and complex sales cycles, which do not always result in the realization of revenues; the degree of our success in retaining our existing customers or competing effectively for greater market share; difficulties in successfully planning and managing changes in the size of our operations; the frequency of the long-term, large, complex projects that we perform that involve complex estimates of project costs and profit margins, which sometimes change mid-stream; the challenges and potential liability that heightened privacy laws and regulations pose to our business; occasional disputes with clients, which may adversely impact our results of operations and our reputation; various intellectual property issues related to our business; potential unanticipated product vulnerabilities or cybersecurity breaches of our or our customers’ systems; risks related to the insurance industry in which our clients operate; risks associated with our global sales and operations, such as changes in regulatory requirements, wide-spread viruses and epidemics like the recent novel coronavirus pandemic, which adversely affected our results of operations, or fluctuations in currency exchange rates; and risks related to our principal location in Israel and our status as a Cayman Islands company. While we believe such forward-looking statements are based on reasonable assumptions, should one or more of the underlying assumptions prove incorrect, or these risks or uncertainties materialize, our actual results may differ materially from those expressed or implied by the forward-looking statements. Please read the risks discussed under the heading “Risk Factors” in our most recent Annual Report on Form 20-F, which we filled with the SEC on March 31, 2022, in order to review conditions that we believe could cause actual results to differ materially from those contemplated by the forward-looking statements. You should not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that future results, levels of activity, performance and events and circumstances reflected in the forward-looking statements will be achieved or will occur. Except as required by law, we undertake no obligation to update publicly any forward-looking statements for any reason, to conform these statements to actual results or to changes in our expectations.
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
U.S. dollars in thousands (except per share amounts)
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenue
136,800
128,299
271,049
253,020
Cost of revenue
76,696
73,635
153,385
145,327
Gross profit
60,104
54,664
117,664
107,693
Operating expenses:
Research and development, net
16,809
15,746
33,330
31,363
Selling, marketing, general and administrative
21,412
19,297
41,929
37,816
Total operating expenses
38,221
35,043
75,259
69,179
Operating income
21,883
19,621
42,405
38,514
Financial and other expenses (income), net
(1,109)
562
(2,201)
1,759
Taxes on income
4,375
3,587
8,488
6,917
Net income
18,617
15,472
36,118
29,838
Attributable to non-controlling interest
–
69
141
239
Net income attributable to Sapiens’ shareholders
18,617
15,403
35,977
29,599
Basic earnings per share
0.33
0.28
0.65
0.54
Diluted earnings per share
0.33
0.28
0.64
0.53
Weighted average number of shares outstanding used to
compute basic earnings per share (in thousands)
55,797
55,196
55,771
55,176
Weighted average number of shares outstanding used to
compute diluted earnings per share (in thousands)
56,163
55,582
56,072
55,576
SAPIENS INTERNATIONAL CORPORATION N.V. AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP RESULTS
U.S. dollars in thousands (except per share amounts)
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
(unaudited)
(unaudited)
(unaudited)
(unaudited)
GAAP revenue
136,800
128,299
271,049
253,020
Valuation adjustment on acquired deferred revenue
–
55
–
110
Non-GAAP revenue
136,800
128,354
271,049
253,130
GAAP gross profit
60,104
54,664
117,664
107,693
Revenue adjustment
–
55
–
110
Amortization of capitalized software
1,569
1,425
3,114
2,856
Amortization of other intangible assets
808
1,848
2,587
3,696
Non-GAAP gross profit
62,481
57,992
123,365
114,355
GAAP operating income
21,883
19,621
42,405
38,514
Gross profit adjustments
2,377
3,328
5,701
6,662
Capitalization of software development
(1,823)
(1,679)
(3,540)
(3,337)
Amortization of other intangible assets
1,223
1,084
2,456
2,160
Stock-based compensation
811
1,059
1,583
1,922
Acquisition-related costs *)
365
4
494
10
Non-GAAP operating income
24,836
23,417
49,099
45,931
GAAP net income attributable to Sapiens’ shareholders
18,617
15,403
35,977
29,599
Operating income adjustments
2,953
3,796
6,694
7,417
Taxes on income
(529)
(589)
(1,209)
(1,153)
Non-GAAP net income attributable to Sapiens’ shareholders
21,041
18,610
41,462
35,863
(*) Acquisition-related costs pertain to charges on behalf of M&A agreements related to future performance targets and retention criteria, as well as completed or prospective third-party services, such as tax, accounting and legal rendered..
Adjusted EBITDA Calculation
U.S. dollars in thousands
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
GAAP operating profit
21,883
19,621
42,405
38,514
Non-GAAP adjustments:
Valuation adjustment on acquired deferred revenue
–
55
–
110
Amortization of capitalized software
1,569
1,425
3,114
2,856
Amortization of other intangible assets
2,031
2,932
5,043
5,856
Capitalization of software development
(1,823)
(1,679)
(3,540)
(3,337)
Stock-based compensation
811
1,059
1,583
1,922
Compensation related to acquisition and acquisition-related costs
365
4
494
10
Non-GAAP operating profit
24,836
23,417
49,099
45,931
Depreciation
1,095
976
2,192
2,031
Adjusted EBITDA
25,931
24,393
51,291
47,962
Summary of NON-GAAP Financial Information
U.S. dollars in thousands (except per share amounts)
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Revenues
136,800
134,249
130,914
130,760
128,354
Gross profit
62,481
60,884
59,370
59,260
57,992
Operating income
24,836
24,263
24,152
24,058
23,417
Adjusted EBITDA
25,931
25,360
25,267
24,777
24,393
Net income to Sapiens’ shareholders
21,041
20,421
20,081
19,080
18,610
Diluted earnings per share
0.37
0.36
0.36
0.34
0.33
Annual Recurring Revenue (“ARR”)
U.S. dollars in thousands
Three months ended
June 30,
2024
2023
168,593
150,417
Non-GAAP Revenues by Geographic Breakdown
U.S. dollars in thousands
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
North America
57,918
55,158
54,882
54,848
52,116
Europe
66,072
68,727
65,239
64,662
62,960
Rest of the World
12,810
10,364
10,793
11,250
13,278
Total
136,800
134,249
130,914
130,760
128,354
Non-GAAP Revenue breakdown
U.S. dollars in thousands
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
Software products and re-occurring post-production services (*)
98,044
82,559
192,285
164,401
Pre-production implementation services (**)
38,756
45,795
78,764
88,729
Total Revenues
136,800
128,354
271,049
253,130
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
Software products and re-occurring post-production services (*)
52,237
42,437
102,577
87,286
Pre-production implementation services (**)
10,244
15,555
20,788
27,069
Total Gross profit
62,481
57,992
123,365
114,355
Three months ended
Six months ended
June 30,
June 30,
2024
2023
2024
2023
Software products and re-occurring post-production services (*)
53.3 %
51.4 %
53.3 %
53.1 %
Pre-production implementation services (**)
26.4 %
34.0 %
26.4 %
30.5 %
Gross Margin
45.7 %
45.2 %
45.5 %
45.2 %
(*) Software products and re-occurring post-production services include
mainly subscription, term license, maintenance, application maintenance,
cloud solutions and post-production services. This revenue stream is a
mix of recurring and re-occurring in nature.
(**) Pre-production implementation services include mainly implementation
services before go-live, which are one-time in nature.
Adjusted Free Cash-Flow
U.S. dollars in thousands
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Cash-flow from operating activities
8,545
18,488
38,646
3,988
14,603
Increase in capitalized software development costs
(1,823)
(1,717)
(1,543)
(1,638)
(1,679)
Capital expenditures
(666)
(466)
(421)
(696)
(775)
Free cash-flow
6,056
16,305
36,682
1,654
12,149
Cash payments attributed to acquisition-related costs(*) (**)
134
751
221
–
–
Adjusted free cash-flow
6,190
17,056
36,903
1,654
12,149
(*) Included in cash-flow from operating activities
(**) Acquisition-related payments pertain to charges on behalf of M&A agreements related to future performance targets and retention criteria, as well as completed or prospective third-party services, such as tax, accounting and legal.
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
U.S. dollars in thousands
June 30,
December 31,
2024
2023
(unaudited)
(unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents
122,646
126,716
Short-term bank deposit
63,800
75,400
Trade receivables, net and unbilled receivables
102,101
90,273
Other receivables and prepaid expenses
20,258
22,514
Total current assets
308,805
314,903
LONG-TERM ASSETS
Property and equipment, net
12,065
12,661
Severance pay fund
3,360
3,605
Goodwill and intangible assets, net
307,231
317,352
Operating lease right-of-use assets
20,505
23,557
Other long-term assets
15,571
17,546
Total long-term assets
358,732
374,721
TOTAL ASSETS
667,537
689,624
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Trade payables
11,296
6,291
Current maturities of Series B Debentures
19,796
19,796
Accrued expenses and other liabilities
74,057
77,873
Current maturities of operating lease liabilities
5,705
6,623
Deferred revenue
31,928
38,541
Total current liabilities
142,782
149,124
LONG-TERM LIABILITIES
Series B Debentures, net of current maturities
19,768
39,543
Deferred tax liabilities
8,517
10,820
Other long-term liabilities
11,469
11,538
Long-term operating lease liabilities
17,816
21,084
Accrued severance pay
7,443
7,568
Total long-term liabilities
65,013
90,553
EQUITY
459,742
449,947
TOTAL LIABILITIES AND EQUITY
667,537
689,624
SAPIENS INTERNATIONAL CORPORATION N.V. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
U.S. dollars in thousands
For the six months ended June 30,
2024
2023
(unaudited)
(unaudited)
Cash flows from operating activities:
Net income
36,118
29,838
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization
10,349
10,743
Accretion of discount on Series B Debentures
22
32
Capital (gain) loss from sale of property and equipment
(9)
86
Stock-based compensation related to options issued to employees
1,583
1,922
Net changes in operating assets and liabilities, net of amount acquired:
Decrease (increase) in trade receivables, net and unbilled receivables
(12,723)
2,351
Increase (decrease) in deferred tax liabilities, net
(1,428)
45
Decrease (increase) in other operating assets
3,445
(390)
Increase (decrease) in trade payables
4,446
(1,014)
Decrease in other operating liabilities
(8,354)
(12,572)
Increase (decrease) in deferred revenues
(6,587)
5,284
Increase in accrued severance pay, net
171
466
Net cash provided by operating activities
27,033
36,791
Cash flows from investing activities:
Purchase of property and equipment
(1,146)
(1,439)
Proceeds from (investment in) deposits
12,136
(70,002)
Proceeds from sale of property and equipment
14
30
Payments for business acquisitions, net of cash acquired
(375)
–
Capitalized software development costs
(3,540)
(3,337)
Acquisition of intellectual property
–
(177)
Net cash provided by (used in) investing activities
7,089
(74,925)
Cash flows from financing activities:
Proceeds from employee stock options exercised
98
–
Distribution of dividend
(15,635)
(13,796)
Repayment of Series B Debenture
(19,796)
(19,796)
Acquisition of non-controlling interest
(4,131)
–
Dividend to non-controlling interest
–
(47)
Net cash used in financing activities
(39,464)
(33,639)
Effect of exchange rate changes on cash and cash equivalents
1,272
905
Decrease in cash and cash equivalents
(4,070)
(70,868)
Cash and cash equivalents at the beginning of period
126,716
160,285
Cash and cash equivalents at the end of period
122,646
89,417
Debentures Covenants
As of June 30, 2024, Sapiens was in compliance with all of its financial covenants under the indenture for the Series B Debentures, based on having achieved the following in its consolidated financial results:
Covenant 1
Target shareholders’ equity (excluding non-controlling interest): above $120 million.Actual shareholders’ equity (excluding non-controlling interest) equal to $459.7 million.
Covenant 2
Target ratio of net financial indebtedness to net capitalization (in each case, as defined under the indenture for the Company’s Series B Debentures) below 65%.Actual ratio of net financial indebtedness to net capitalization equal to (46.79)%.
Covenant 3
Target ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is below 5.5.Actual ratio of net financial indebtedness to EBITDA (accumulated calculation for the four last quarters) is equal to (1.45).
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SOURCE Sapiens International Corporation
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November 11, 2026By
Investor Conference Call on November 11, 2026 at 10:00 a.m. ET
TORONTO, Nov. 10, 2026 /CNW/ — Baylin Technologies Inc. (TSX: BYL) (OTCQB: BYLTF) (the “Company” or “Baylin”), a leading diversified global wireless technology company focused on cellular radio frequency products, custom antenna solutions, satellite communications products, and supporting services, today announced its financial results for the three and nine months ended September 30, 2026. All amounts are stated in Canadian dollars unless otherwise indicated.
THIRD QUARTER SUMMARY
Revenue of $35.3 million compared to $16.8 million in the third quarter of 2025, an increase of 110.7%. The increase was primarily due to the inclusion of a full quarter of revenue from the Kaelus business line.Gross profit of $12.2 million compared to $7.3 million in the third quarter of 2025, due mainly to the inclusion of gross profit from the Kaelus business line.Gross margin of 34.6% compared to 43.4% in the third quarter of 2025 was largely attributed to product mix within the period combined with inflationary pressures, increased operating costs and the ongoing impact of global economic and geopolitical uncertainty.Adjusted EBITDA* of $0.7 million compared to $0.6 million in the third quarter of 2025 was impacted by the same factors as gross margin.Net loss of $0.7 million compared to $1.1 million in the third quarter of 2025, due primarily to an operating loss of $0.8 million. On a per share basis, a net loss of $0.00 per share in the third quarter of 2026 compared to a net loss of $0.01 per share in the third quarter of 2025.Net debt* of $12.7 million at September 30, 2026 compared to $12.4 million at December 31, 2025.Backlog* of $50.9 million at September 30, 2026 compared to $20.4 million at December 31, 2025. The increase was mainly due to the inclusion of backlog from the Kaelus business line and strong new order intake from the Satcom business line.
* This is a non-IFRS measure. See notes in “Selected Financial Information”.
RECENT DEVELOPMENTS
Term Facility
On May 15, 2026, the Company entered into an agreement (the “Credit Agreement”) with Luis LP (the “Lender”), an entity established by SAF Group, a Calgary-based private credit lender, pursuant to which the Lender established a non-revolving term credit facility (the “Term Facility”) in favour of the Company for up to $30.9 million.
Following September 30, 2026, the Company failed to meet the minimum Lender-defined EBITDA covenant applicable to the second and third quarters of 2026 combined period. On November 10, 2026, the Company and the Lender entered into the First Amending Agreement, under which the Lender waived the Company’s failure to meet the minimum Lender-defined EBITDA covenant for the second and third quarters of 2026 combined, subject to the terms and conditions of the First Amending Agreement. The waiver does not apply to any other Default or Event of Default or to any future covenant tests, including the fourth quarter of 2026 tests, which remain in place. The principal terms of the First Amending Agreement can be found in the Company’s management’s discussion and analysis (the “MD&A”) for the three and nine months ended September 30, 2026.
Pursuant to the terms of the Credit Agreement, the Company is prohibited from making the Kaelus deferred purchase price payments of approximately $10.6 million due November 15, 2026 and $2.7 million due December 15, 2026 when due and the Company is uncertain whether it will be allowed to make the final instalment of $7.3 million due March 27, 2027 (collectively the “Kaelus Payments”). Interest on a portion of the Kaelus Payments accrues at 5% per annum from closing until paid. The Company is evaluating alternatives to address these obligations.
The Kaelus Payments are presented in Canadian dollars based on the September 30, 2026 exchange rate. As previously disclosed, the Kaelus Payments are payable in Swedish Krona (SEK), and the actual Canadian dollar equivalent of the final payments will vary based on the exchange rate in effect on the applicable payment dates.
If a guaranteed Kaelus Payment is not made when due, the former Kaelus shareholders may make written demand under the guarantee against 2385796 Ontario Inc., a corporation controlled by Mr. Royer.
SELECTED FINANCIAL INFORMATION
The table below discloses selected financial information for the periods indicated.
(in $000’s except per share amounts)
Three Months Ended September 30,
Nine Months Ended September 30,
2026
2025
Change
Change
2026
2025
Change
Change
$
$
$
%
$
$
$
%
Profit and Loss
Revenue
35,300
16,754
18,546
> 100.0%
73,383
58,076
15,307
26.4 %
Gross profit
12,230
7,274
4,956
68.1 %
29,273
25,682
3,591
14.0 %
Gross margin
34.6 %
43.4 %
(8.8 pp)
(20.3 %)
39.9 %
44.2 %
(4.3 pp)
(9.7 %)
Net loss
(742)
(1,100)
358
(32.5 %)
(6,249)
(2,142)
(4,107)
> 100.0%
Basic and diluted net loss per share
($0.00)
($0.01)
$0.01
(100.0 %)
($0.03)
($0.01)
($0.02)
> 100.0%
EBITDA(1)
263
249
14
5.6 %
(371)
2,060
(2,431)
N/A
Adjusted EBITDA(2)
703
586
117
20.0 %
3,805
4,695
(890)
(19.0 %)
As at
As at
As at
As at
September
30, 2026
September
30, 2025
Change
Change
September
30, 2026
December
31, 2025
Change
Change
$
$
$
%
$
$
$
%
Balance Sheet and Other
Current assets
75,520
33,399
42,121
> 100.0%
75,520
39,413
36,107
91.6 %
Total assets
114,512
44,243
70,269
> 100.0%
114,512
45,377
69,135
> 100.0%
Current liabilities
92,484
38,433
54,051
> 100.0%
92,484
50,582
41,902
82.8 %
Total liabilities
99,612
54,098
45,514
84.1 %
99,612
57,026
42,586
74.7 %
Net debt(3)
12,695
11,364
1,331
11.7 %
12,695
12,395
300
2.4 %
Backlog(4)
50,874
22,645
28,229
> 100.0%
50,874
20,404
30,470
> 100.0%
Notes:
(1)
See “Non-IFRS Measures”. “EBITDA” refers to net income (loss) plus income tax expense (recovery), interest and other finance expense (income), investment income, fair value adjustments, depreciation and amortization.
(2)
See “Non-IFRS Measures”. “Adjusted EBITDA” refers to EBITDA adjusted for the impact of certain items, including asset impairment charges, expenses from mergers and acquisitions, costs of reorganization of a business, gain or loss on the sale of a business, including related expenses, legal costs incurred from significant non-operating activities, severance and executive recruitment costs, and share-based compensation.
(3)
See “Non-IFRS Measures”. “Net debt” refers to total bank indebtedness less cash and cash equivalents.
(4)
See “Non-IFRS Measures”. “Backlog” refers to the value of unfulfilled purchase orders placed by customers.
A copy of the Company’s unaudited interim condensed consolidated financial statements for the three and nine months ended September 30, 2026 and corresponding management’s discussion and analysis (the “MD&A”) are available under the Company’s profile on SEDAR+ at www.sedarplus.ca.
OUTLOOK
Corporate
In the third quarter of 2026, the Company continued to advance its strategy of building a diversified global RF technology platform following the acquisition of Kaelus in May 2026. The quarterly sequential revenue increase in the third quarter reflected the contribution from the first full quarter of the Kaelus business line, combined with improvements from the Satcom business line. These gains were tempered by the decline in revenue in the Wireless Infrastructure business line as a result of North American wireless carriers redirecting capital spending to fibre assets in support of data centre buildouts. The Company generated positive Adjusted EBITDA of $0.7 million in the third quarter of 2026, its eleventh consecutive quarter of positive Adjusted EBITDA.
The macroeconomic environment remains challenging, given the ongoing geopolitical tensions and continuing uncertainty. Continued disruptions to the oil supply in the Middle East kept the oil and fuel prices elevated, with broader impacts on transportation, logistics and other production costs across multiple industries. In addition, the Company is facing higher manufacturing costs amid industry-wide price spikes affecting a wide range of electronic components, including memory chips and other critical components.
Despite these challenges and uncertainties, we remain committed to our core principles: clear market-driven strategies, cost containment, prioritizing research and product development, and focusing on revenue growth and margin improvement. Management continues to monitor component pricing and supply chain conditions closely and is focused on mitigating the impact through procurement optimization, cost control initiatives and operational efficiencies.
Based on our current assessment for the fourth quarter of 2026, we expect (i) the Kaelus business line will continue to generate solid revenue, with margins improving relative to recent periods; (ii) the Custom Antenna Solutions business line will experience a gradual recovery in order intake, although customer purchasing activity may continue to be affected by macroeconomic conditions; (iii) sales volumes in the Wireless Infrastructure business line will remain below historical levels due to continued project delays and reduced carrier spending, particularly in the United States; and, (iv) the Satcom business line will deliver improved revenue performance compared to earlier periods.
These operating expectations are subject to ongoing financing and liquidity constraints. Although the First Amending Agreement improved the Company’s short-term liquidity, the terms of the Credit Agreement prohibit the Company from making the Kaelus Payments due in November and December 2026. The Company also remains subject to future financial covenant tests, which it may not satisfy. Management is working constructively with its Lender to negotiate amendments to its credit arrangements intended to address these challenges and support the Company’s ongoing liquidity requirements.
Kaelus Business Line
For the third quarter of 2026, Kaelus delivered strong revenue and Adjusted EBITDA in its first full quarter of consolidated operations, significantly bolstering the Company’s consolidated results. Based on current customer order volumes, ongoing sales velocity and efforts on improving margins, management believes that Kaelus will continue to produce healthy results. Looking ahead, management remains focused on integrating Kaelus into the broader organization, pursuing cross-selling opportunities across the combined customer portfolios of the Kaelus and Wireless Infrastructure business lines, as well as diversifying Kaelus’ customer base to drive further growth in 2027.
Custom Antenna Solutions Business Line
Custom Antenna Solutions delivered softer financial results in the third quarter of 2026 compared to the prior year period. The business line is being impacted by customer order delays due to market volatility and macroeconomic uncertainty. In addition, the business line faced higher production costs resulting from industry-wide price spikes across a wide range of electronic components, which placed additional pressure on gross margins. Despite these challenges, we expect Custom Antenna Solutions revenue in the fourth quarter of 2026 to be comparable to the third quarter, and full-year 2026 revenue to be similar to 2025. The number of active bids for new projects remains at a solid level.
Wireless Infrastructure Business Line
Wireless Infrastructure experienced challenging market conditions in the third quarter of 2026, primarily reflecting capital expenditure delays by North American carriers. Looking ahead, management will continue to leverage the competitive advantages of its multibeam and small cell antenna technologies to pursue new opportunities and drive further sales with wireless carriers and third-party network operators in domestic and international markets. Based on our current assessment, we anticipate Wireless Infrastructure’s performance in revenue, gross profit and Adjusted EBITDA for the full year 2026 will be softer than its very strong 2025 results. We expect carriers to resume infrastructure spending in 2027, which we anticipate will support a recovery in backlog and sales volume for the business line.
Satcom Business Line
Satcom recorded a significant increase in its backlog in the latter part of the second quarter of 2026 and early in the third quarter, primarily driven by multi-million-dollar purchase orders for the Genesis amplifiers across high-power broadcast, government and defence satellite applications. Although Satcom’s top line result in the third quarter of 2026 was weaker than the prior year period, Adjusted EBITDA was comparable and also demonstrated sequential improvement compared to the second quarter of 2026. With this backlog in hand, our outlook for the fourth quarter is more favourable as customers continue to transition from legacy lower-margin products to the new Genesis products manufactured in the United States. This shift in product mix coupled with increased sales volume is expected to improve margins, but we still anticipate that Satcom will end 2026 with lower revenue, gross profit and Adjusted EBITDA compared to 2025.
Satcom is generally not subject to US tariffs. See “Tariffs” below.
Tariffs
The Company continues to take proactive steps to monitor and mitigate the effect of US tariffs across all its business lines.
Wireless Infrastructure’s products are manufactured in our facility in China or third-party facilities in Vietnam. The actual margin impact of tariffs on Wireless Infrastructure has been mitigated to a level much lower than the applicable tariff due to a number of measures taken by the Company. This has allowed Wireless Infrastructure to be compliant with current tariff regime while protecting margins.
Custom Antenna Solutions is currently not directly affected by US tariffs on China. Although Custom Antenna Solutions’ products are manufactured in our facility in China or third-party facilities in Vietnam, they are shipped from there to contract manufacturers elsewhere in Asia for embedding in their final products.
Satcom’s products are manufactured in Canada, and a significant proportion (between 40% and 50% annually) is delivered to its customers in the United States. Satcom’s products are compliant with the Canada–United States–Mexico Agreement (“CUSMA”) and are therefore exempt from general tariffs applicable to non-qualifying Canadian goods. Following the initial joint review held on July 1, 2026, the United States declined to extend CUSMA for a new 16-year term in its current form, triggering annual joint reviews among the three countries. CUSMA remains in force. While the tariff treatment for qualifying Satcom products remains unchanged at this time, the ongoing annual joint reviews introduce medium-term trade policy uncertainty that could impact North American tariff structures in the future.
Since completion of the acquisition of Kaelus, the Company has been working to harmonize its tariff mitigation strategy across the Kaelus business line in order to minimize the impact of tariffs on its products shipped to US customers. Kaelus manufactures through its company-owned facility in China as well as through the use of contract manufacturers in China, Vietnam, and India. US sales represent approximately 20% of Kaelus’ total historical revenue.
KAELUS ACQUISITION – PRO FORMA FORECAST
The Company is withdrawing its financial outlook for fiscal 2026, most recently provided on August 5, 2026, including the forecast for combined revenue, gross profit, gross margin and Adjusted EBITDA. Investors should no longer rely on the August 5, 2026 financial outlook.
The August 5, 2026, financial outlook was based on management’s then-current expectations and assumptions regarding customer demand, order patterns and deployment activity across the Company’s businesses. Since that time, the timing of anticipated capital spending and network deployments by certain customers has changed, resulting in the deferral of certain expected customer orders and reduced visibility regarding the timing of future demand. As a result, management no longer believes it has a sufficient basis to support the financial outlook previously provided for fiscal 2026.
Accordingly, the Company is withdrawing its fiscal 2026 financial outlook, is not providing replacement quantitative guidance at this time. The Company will continue to provide disclosure concerning its historical financial results, business and operations and, where appropriate, other forward-looking information in accordance with applicable Canadian securities laws.
INVESTOR CONFERENCE CALL
Baylin will hold a conference call on Wednesday, November 11, 2026 at 10:00 a.m. (ET) to discuss its financial results for the three and nine months ended September 30, 2026. The conference call will be hosted by Leighton Carroll, Chief Executive Officer, and Cliff Gary, Chief Financial Officer. All interested parties are invited to participate using the dial-in details provided below.
Date:
November 11, 2026
Time:
10:00 a.m. (ET)
Dial-in Number:
(+1) 888-699-1199 or (+1) 416-945-7677
Conference ID#:
17616
Rapid Connect:
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/3P7r42x
Webcast:
This call is also on webcast and can be accessed at: https://app.webinar.net/Ka91P23nGMd
FORWARD-LOOKING INFORMATION AND STATEMENTS
This press release includes forward-looking information and forward-looking statements (together, “forward-looking statements”) within the meaning of applicable securities laws. Forward-looking statements are not statements of historical fact. Rather, forward-looking statements are disclosure regarding the conditions, developments, events or financial performance that we expect or anticipate may or will occur in the future including, among other things, information or statements concerning our objectives and strategies to achieve those objectives, statements with respect to management’s beliefs, estimates, intentions and plans, and statements concerning anticipated future circumstances, events, expectations, operations, performance or results. Forward-looking statements can be identified generally by the use of forward-looking terminology, such as “anticipate”, “believe”, “could”, “should”, “would”, “estimate”, “expect”, “forecast”, “indicate”, “intend”, “likely”, “may”, “outlook”, “plan”, “potential”, “project”, “seek”, “target”, “trend” or “will” or the negative or other variations of these words or other comparable words or phrases and is intended to identify forward-looking statements, although not all forward-looking statements contain these words.
Forward-looking statements in this press release and the MD&A referenced herein include statements concerning the outlook for our business generally and each of our business lines in particular, including our expectation for future financial performance, the effect of the macroeconomic environment, higher interest rates, timing of and potential impacts from US tariffs, and other disruptions to our business and financial performance. Forward-looking statements are based on certain assumptions and estimates made by us in light of experience and perception of historical trends, current conditions, anticipated future developments, including projected growth in the sales of passive and active radio frequency and satellite communications products, and supporting services, and other factors that we believe are appropriate and reasonable in the circumstances, but there can be no assurance that such assumptions and estimates will prove to be correct.
Forward-looking statements in this press release and the MD&A referenced herein include statements regarding the Company’s expected covenant compliance, available liquidity, ability to continue funding operations and meet obligations, treatment or restructuring of the Kaelus deferred purchase price, discussions with the Lender and former Kaelus shareholders, and the timing and consequences of any demand under the guarantee. These statements assume, among other things, continued Lender support, forecast operating performance and identified financing availability. Actual results may differ materially if the Company fails to satisfy future covenants, cannot obtain additional liquidity or accommodations, is required to make payments sooner than anticipated, or a former Kaelus shareholder makes demand under the guarantee.
Many factors could cause our actual results, level of activity, performance or achievements or future events or developments to differ materially from those expressed or implied by the forward-looking statements, including the risk factors discussed in the Company’s most recent Annual Information Form, which is available under the Company’s profile on SEDAR+ at www.sedarplus.ca. All the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors in this press release. There can be no assurance that the actual results or developments will be realized or, even if substantially realized, will have the expected consequences to, or effects on, the Company. Unless required by applicable securities law, the Company does not intend and does not assume any obligation to update any forward-looking statements.
NON-IFRS MEASURES
This press release includes a number of measures that are not recognized under International Financial Reporting Standards (“IFRS”), do not have any standardized meaning under IFRS and as such may not be comparable to similar measures presented by other companies. Management believes that these measures provide useful information to analysts, investors and other interested parties regarding the Company’s financial condition and results of operation as they provide additional key metrics of the Company’s performance. While management believes that non-IFRS measures provide useful supplemental information, they are not intended to represent, and should not be considered as alternatives to, net income (loss), cash flows generated by operating, investing or financing activities, or other financial statement data presented in accordance with IFRS. For further information, see “Non-IFRS Measures” on page 3 of the MD&A.
ABOUT BAYLIN
Baylin is a leading diversified global wireless technology company focused on cellular radio frequency products, custom antenna solutions, satellite communications products, and supporting services.
For further information, please visit www.baylintech.com.
SOURCE Baylin Technologies Inc.
Technology
JOAM INNOTECH Accelerates Global Expansion with Integrated Protection PCB Technology
Published
52 minutes agoon
November 11, 2026By
SEOUL, South Korea, Nov. 11, 2026 /PRNewswire/ — JOAM INNOTECH Co., Ltd. (CEO Byung-hyun Lee), a Korean company specializing in electrical safety, has announced that it has developed a printed circuit board (PCB) module that combines overvoltage, overcurrent and earth-leakage protection in a single unit. The company now plans to use this technology to expand into the global electrical safety market.
JOAM INNOTECH develops and manufactures PCBs for earth-leakage circuit breakers. Drawing on its experience in mass-producing overcurrent protection PCBs, the company is focused on advancing electrical safety technology. Its latest development, an integrated protection module that combines overvoltage, instantaneous overcurrent and earth-leakage detection on a single PCB, strengthens its product competitiveness.
The new module is designed to detect abnormal conditions in the power system, such as sustained high voltage, overcurrent or earth leakage, and trigger the breaker’s trip mechanism in response. Unlike conventional protection methods that only suppress momentary voltage surges, the module has enhanced overvoltage detection that lets it respond when abnormally high voltage is supplied continuously.
Another key advantage is that the module works with existing compact earth-leakage circuit breaker designs. It was designed around standard PCB dimensions, mounting methods and trip coil connections, so manufacturers can add it without external protection devices or major mechanical redesigns. Circuit breaker and power strip manufacturers can expand protection features and set their products apart while keeping their existing product designs.
JOAM INNOTECH is taking a phased approach to development and commercialization. The company has been mass-producing and supplying overcurrent protection PCBs since late 2024, building up its manufacturing capabilities. In April 2026, it filed a Korean patent application for its overvoltage protection technology, and in May it built prototypes of the integrated protection module and ran initial performance tests. Next, the company plans to run application tests in finished products, verify reliability and set mass-production inspection standards to prepare for commercialization.
“We developed this integrated protection PCB module to add overvoltage protection while keeping the structural advantages of existing compact earth-leakage circuit breakers,” said a JOAM INNOTECH spokesperson. “We will keep advancing the technology and verifying its reliability to strengthen our competitiveness, and we aim to create new business opportunities in the global electrical safety market as well as in Korea.”
JOAM INNOTECH CO., LTD
John B. H. Lee
LBH0917@gmail.com
View original content:https://www.prnewswire.com/apac/news-releases/joam-innotech-accelerates-global-expansion-with-integrated-protection-pcb-technology-302935767.html
SOURCE JOAM INNOTECH CO., LTD
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