Call is being recorded on Monday, September 14th, 2026. I would now like to turn the conference over to Brian Campbell. Please go ahead. Good afternoon, everyone, and welcome to Evertz Technologies conference call for our fiscal 2027 first quarter ended July 31st, 2026, with Doug Moore, Evertz Chief Financial Officer, and myself, Brian Campbell. Please note that our financial press release and MD&A will be available on SEDAR and on the company's investor website. Doug and I will comment on the financial results and then open the call to your questions. Turning now to Evertz results. I will begin by providing a few highlights, and then Doug will provide additional detail. First off, sales for the first quarter totaled CAD 118.3 million, up 5.5%, including CAD 58.9 million in software and services revenue, which represents 49.8% of the total revenue. International revenue in the quarter was CAD 38.3 million, up CAD 4.6 million, or 17.5% from the prior year. Our sales base is well diversified, with the top 10 customers accounting for approximately 49% of sales during the quarter, with no one customer accounting for more than 10% of sales. In fact, we had 87 customer orders of over CAD 200,000. Gross margin in the quarter was CAD 69.3 million, or 58.6%, down from 61.4% in the prior year. Net earnings were CAD 8 million, resulting in fully diluted earnings per share of CAD 0.10 for the quarter. Investment in research and development totaled CAD 38.5 million. Evertz working capital was CAD 131.4 million, including cash of CAD 2.5 million as at July 31st, 2026. At the end of August, Evertz purchase order backlog was more than CAD 259 million, and shipments during the month of August were CAD 30 million. We attribute this strong financial performance and robust combined shipments and purchase order backlog to channel and video services proliferation, increasing global demand for high-quality video anywhere, anytime, the ongoing technical transition to IP, IT, and cloud-based architectures in the industry, and specifically to the growing adoption of Evertz IP-based software-defined video networking solutions, Evertz IT and cloud solutions, our immersive 4K, 8K ultra-high-definition solutions, our state-of-the-art DreamCatcher IP replay and live production with BRAVO Studio featuring the iconic Studer audio. Today, Evertz board of directors declared a regular quarterly dividend of CAD 0.205 per share, payable on or about October 1st. I will now hand over to Doug Moore, Evertz Chief Financial Officer, to cover our results in greater detail. All right. Thanks, Brian. Good afternoon, everyone. Starting with revenue. After a slower start in May of 2026, sales were up just over 5% to CAD 118.3 million in the first quarter of fiscal 2027, compared to the CAD 112 million in the first quarter of fiscal 2026. Hardware revenue declined slightly quarter-over-quarter from CAD 60.5 million to CAD 59.3 million. While software and services revenue increased 14% from CAD 51.6 million to CAD 58.9 million in the current quarter. Revenue from software and services represented approximately 50% of the total revenue in the quarter. Looking regionally, quarterly revenues in the U.S.-Canadian region were CAD 79.9 million, compared to CAD 79.5 million in the prior year. While quarterly revenues in the international region were CAD 38.3 million, an increase of CAD 4.6 million or 17% compared to CAD 32.7 million in the prior year. The international segment represented 32% of the total sales in the quarter. Gross margin for the quarter was CAD 58.6 million. That is compared to CAD 61.4 million in the prior year, and this quarter was within our target range. While down year-over-year, the gross margin, as I said, was within our target range. While our software and services revenue represented almost 50% of revenue, I will note there was an increase in international revenue that counterbalanced that a bit. Excuse me. It is also worth noting that at this time, we are not being materially impacted by additional tariff costs. Turning to selling and admin expenses. S&A was CAD 19.9 million in the first quarter. That is an increase of CAD 0.9 million from the same period last year, and selling and admin expenses as a percentage of revenue were approximately 16.8%, compared to 16.9% for the same period last year. Year-over-year, the increase in S&A expenses included around CAD 300,000 in additional trade show and travel costs as we have attended more trade shows in the quarter or year-over-year, particularly within the government and military sector. Sequentially, S&A is down about CAD 0.8 million from Q4. That is just as a reminder, the largest driver there is the non-reoccurrence of NAB that happened in April of the prior year. Research and development expenses were CAD 38.5 million in the first quarter. That represented a CAD 1.5 million increase over the same period last year. As a percentage of revenue, R&D expenses were 32.5%, compared to 33% in the prior year. The increase in R&D expenses was driven by salaries of around CAD 700,000 and also some patent-related professional fees for around CAD 300,000. Investment tax credits for the quarter were CAD 3.7 million. That is compared to credits of CAD 3.3 million in the prior year. Stock compensation expense, while it is up less than CAD 100,000 sequentially to CAD 2.4 million, it is up CAD 1.3 million year-over-year. That increase year-over-year is driven by the equity-based RSU and share options we issued in December of 2025 that are being recognized over the vesting period since issuance. Foreign exchange for the first quarter was a loss of CAD 500,000. That is compared to a foreign exchange gain of CAD 0.7 million in the first quarter last year. Now turning to liquidity of the company. Cash, net of bank indebtedness, as at July 31st, 2026, was CAD 2.5 million. That is a large decline compared to cash of CAD 19.1 million as at April 30th, 2026. That decrease is mostly driven by a sharp increase in raw materials inventory that we ended up bringing in during the quarter. Working capital was CAD 215.1 million as at July 31st, 2026, compared to CAD 200.2 million at the end of April 30th, 2026. Looking at cash flows for the quarter, the company generated cash from operations of CAD 0.8 million, which is net of a CAD 16 million negative change in non-cash working capital and current taxes. If the effects of the change in non-cash working capital and current taxes were excluded from the calculation, the company generated CAD 16.8 million in cash from operations during the quarter, compared to CAD 16.8 million in the first quarter of fiscal 2026. As noted, the use of cash was driven by a large increase in raw materials inventory. We brought in approximately CAD 20 million of raw materials in the quarter, largely consisting of memory storage and servers, driven by some of the supply chain increased lead times. The company used cash of CAD 2.1 million for investing activities. That was principally driven by the acquisition of capital assets of CAD 1.8 million and business acquisitions of CAD 0.3 million. During the quarter, we acquired a small AV integrator in the Ottawa region for CAD 300,000. The company used cash in financing activities of CAD 16.8 million, which was principally driven by dividends paid of CAD 15.5 million. Finally, looking at our share capital position as at July 31st, shares outstanding were approximately 75.7 million and options and share-based RSUs outstanding were approximately 4 million. Weighted average shares outstanding were 75.6 million and weighted average fully diluted shares were 77.6 for the period ending July 31st. That concludes the review of our financial results and position for the first quarter. I would like to remind you that some of the statements presented today are forward-looking, subject to a number of risks and uncertainties, and we refer you to the risk factors described in the annual information form and the official reports filed with the Canadian Securities Administrators. Brian Campbell, back to you. Thank you, Doug Moore. Ludy, we are now ready to open the call to questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. To withdraw your question, please press star followed by the number two. With that, our first question comes from the line of Thanos Moschopoulos with BMO Capital Markets. Please go ahead. Hi, good afternoon. From a supply chain perspective, you mentioned greater investment in inventory for some of the components. To date, are you able to manage supply constraints or is it having any impact in terms of delayed orders or shipments or anything like that? Have you been able to pass through the pricing increases on the component costs, or how's that dynamic been influencing your margins? Thanks. Yeah, sure. I'll address that. On the supply chain, that's really chewed up a big chunk of our cash as the lead times are being pushed out largely, with this AI demand. During the quarter, we would have had some delays in server receipts and that, but as of today, we're not impacted by. We're not having part shortages or any kind of constraints in that regard. It's just really it's taken, like I said, we've built up a lot of stock and memory and storage servers just to make sure we can deliver when we need to, and that's taken a lot of our cash out. On the cost side, that's not a straightforward answer, I guess I would say. It's a case-by-case basis on how you pass on costs. It's not a direct line, but it's not affecting our margins at the moment. We're still within our target range. We're getting healthy margins, and we don't forecast a decrease at this time. On tariffs, you mentioned no real impact to date. Do you expect that to remain the case? Is that a function of just being able to migrate your manufacturing to your U.S. operations, or is it that there isn't a lot within your scope that's impacted by the new U.S. tariffs? The scope is a big factor. There's multiple different methods. We can build in the States, as you know. We can shift things around. But it's not materially impacting us. Okay. Finally, any update in terms of your opportunity within government and defense and how the pipeline there has been progressing over the past quarter? On the sales side, I could say, it's lumpy in general, and the quarter is between 5% to 6% of revenue. I don't know if Brian Campbell wants to add more color, but we did have some strong order intake in August from government sales, but, I can't specifically quantify it. I don't know if there's additional color you want to add, Brian Campbell. I would reiterate the strong order intake. We've been very active, both domestically, in Canada, trying to increase our presence and position, being a made-in-Canada solution, not just a Canadian goods for classification purposes. But with our campus in Burlington, our manufacturing operations, and our over 600 engineers and staff domiciled in Canada, we feel that we've got a very compelling solution to provide to Canadian government. And historically, we have had a very good position within the U.S. government and defense community and at times NATO as well. All right. I'll pass it on. Thank you. Your next question comes from the line of Paul Treiber with RBC Capital Markets. Please go ahead. Well, thanks, and good afternoon. Just a question just on the backlog, sequentially, it was quite a large rise there. Was that concentrated in a few large contracts, or was it fairly broad-based? And what's the underlying demand trend that you're seeing in regards to backlog? I can comment on the backlog composition. It's a pretty relatively broad-based increase. There's no specific contracts material of press releasing on their own. But there is some contracts in the CAD 5 million to CAD 10 million size, but that's not totally atypical. So it's a bit relatively broad-based. And then, sorry, there was a second part there. Oh, no. Just on the breadth which you discussed. Shifting to revenue, with international being much stronger than U.S., what was driving international in the quarter? And then conversely, like in terms of the U.S. or North America, were there any factors that were potentially weighing on demand, that you haven't seen in previous quarters? No, we are very project-centric. So there was a few projects that were completed internationally. So, in particular, we had a few in Europe. That's just the lumpiness of the nature. As it relates to Canadian U.S. demand, there's no specific factors to drive an offsetting decrease or anything like that. It's just really more the lumpiness- Okay of where the projects occurred. Okay, and then just lastly, just with more and more of your software incorporating some AI features, how are you looking to manage AI-related costs that get embedded into software? Do you anticipate lower margins on products with AI, or is it relatively negligible? Yeah, I think it's the latter, so relatively negligible. We don't change, I guess, the margin profile, whether they're AI embedded or not. Yeah, that's probably the best way to answer that. Okay. Thank you. I'll pass on. All right, thank you. Your next question comes from the line of Robert Young with Canaccord Genuity. First question from me would be on the quarter-over-quarter dip in the software and services line. I think last year it was the same type of dip quarter-over-quarter. Is there some seasonality there to understand? I understand it's up year-over-year, but what would be the driver of the quarterly, the sequential drop? The only really seasonality we would have in the sense of software and services is more towards Q3 when there's a lot of annual license renewals for calendar year-ends. But even then, certain customers are over various periods. Some of that's just driven by volumes, so it's not so much a seasonality as it is volume driven, I guess. But yeah, other than, like I said, other than the annual renewals of licenses, there's nothing specific to point to for seasonality. Okay. What was the driver of the year-over-year growth then in software and services? Sure. It's project-based. There is a few projects that would've been completed. There's a general baseline if you look at our MD&A in the last eight quarters where there's, I guess, a general baseline, I'll call it, but there is as projects get completed, sign-offs like SAT sign-off acceptances, then basically they get recognized into revenue. If, for example, there's a project in Europe that got signed off, it would go into revenue, international revenue. Right. Over the last eight quarters, as you note, the data in the MD&A shows that you have a steadily increasing mix of software. Maybe if you could just talk at a high level what the growth in the percentage of revenue coming from software as a service, what is the driver of that? That is a long-term trend of our business model having more We are still very hardware-centric, of course. But having software solutions that used to be solely hardware, now there is software solutions. We have more service level agreements than we had in the past. It is just the long-term trend we have had in our business model. If that is- Yeah. Yeah. The previous question about the growth and the backlog, first time we have seen that. Is the software and services line the driver behind that? Is it long duration programs or? It is actually, the current increase, the 9%, is actually hardware. It is more hardware driven than it is actually software. Basically hardware contracts came in. Everything has got a mix, but they are hardware centric is what I would say. There are some of those contracts that we brought in were also government related, which generally are more hardware centric. Okay. Then last question from me, just to push you a little harder on this mitigation of tariffs. In the past you have said that you were protected under the NAFTA CUSMA, and it seems as though that is no longer a protection. I am curious if you could just get into maybe a little more detail around how you are mitigating. Are you able to service all of your U.S. demand out of your U.S. manufacturing? I guess I was kind of anticipating a higher level of U.S. revenue crowding in in front of this increase in tariffs, which we did not see. I am just trying to get a better understanding of how you are mitigating and why there was not any Impact early buying to avoid it. We are not, the U.S. office is largely, not everything is being produced out of there. To put it is more government related projects we will say is the focus. The majority of our products are currently being protected by the USMCA. The tariff, there is various codes that have been applied to products, and the majority of our stuff is not being impacted at the moment. But it is a volatile situation, but at the moment it is not. Is that your assessment or is that an assessment of the, like if you've not been assessed tariffs to date on, and it's because the codes related to the way you file don't line up with the codes provided in the schedule? Yeah. Sorry, it's not that there's no impact of tariffs. There's been some marginal costs over the past year or so, right? But the majority of our stuff is not assessed with tariffs. Okay. And that's having no real expected impact on your margin structure or it's not a headwind to growth in the U.S. market? Not materially, no. Okay. Thank you. I'll pass the line. Thank you. I'm showing no further questions at this time. I would like to turn us back to Brian Campbell for closing remarks. Thank you. I'd like to thank the participants for their questions and to add that we are pleased with the company's performance during Q1 of fiscal 2027, which saw sales rise 5.5% to CAD 118.3 million, including CAD 58.9 million in software and services revenue, solid gross margins of 58.6% for the quarter, along with continued investments in R&D, which totaled CAD 38.5 million in the quarter. We closed the first quarter of Evertz fiscal 2027 with significant momentum fueled by a combined purchase order backlog plus August shipments totaling in excess of CAD 289 million. By the growing adoption and successful large-scale deployments of Evertz IP-based software-defined video networking and cloud solutions by some of the largest new media and broadcast players in the industry and with government defense and enterprise. By the continuing success of our DreamCatcher BRAVO state-of-the-art IP-based replay and production suite with Evertz significant investments in software-defined IP, IT, and cloud technologies, the over 600 industry-leading IP SDN deployments and the capabilities of our staff, Evertz is poised to build upon our leadership position. Thank you, and we look forward to having many of you join us on Wednesday, the 7th of October, at our annual general meeting. Good night. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.