Earnings release
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1 NTG Clarity Reports Q 2 2026 Revenue of $2 0.1 Million , Withdraws 2026 Guidance , and Announces Work Valued at $16.8 Million Toronto, Ontario -- (Newsfile Corp. - August 27 , 202 6 ) - NTG Clarity Networks Inc. (TSXV: NCI) (OTC Pink: NYWKF); NTG Clarity (“NTG” or the “Company”) today reported its results for the second quarter ended June 30 , 2026 ( all figures in Canadian Dollars). Q 2 2026 Highlights All comparisons below are to the quarter ended June 3 0 , 202 5 , unless otherwise noted Revenue grew 6.4% year - over - year to $20.1 million, and declined 5.6% from $21.3 million in the first quarter. Clients across the region extended decision and project timelines during the quarter in response to regional conditions, meaning new work growth was not as fast as expected. Gross Profit was $6.7 million, representing 33. 5 % of revenue, compared to $7.2 million and 37.9% in the prior year. The margin decline reflects customers push ing for better pricing terms with the conflict backdrop. Net Income was $2. 3 million, or 11.4 % of revenue, compared to $403,000 or 2.1% in the pri or year. Income before taxes was a loss of $59 ,521 . The quarter includes a non - recurring deferred tax recovery of approximately $1.8 million related to the conversion of the Company's Saudi branch to an LLC structure, which removed double taxation between Saudi Arabia and Canada. Adjusted EBITDA was $ 5,56 0 , or 0.0% of revenue, compared to $2.8 million, or 14.8%, in the prior year. The Company built capacity in 2025 to accommodate a higher revenue base that has been slower to materialize driven by economic u ncertainty caused by regional conflicts. The Company’s cost base, including cost of good s sold and G&A , has remained relatively flat since Q4 2025 and the change in the Company’s Adjusted EBITDA margin has primarily been driven by revenue and operating leverag e. Fiscal 2026 Financial Outlook Even though NTG is seeing moderate revenue growth in 2026 , due to the economic uncertainty caused by regional conflicts , the company is withdrawing the fiscal 2026 financial outlook disclosed on April 27, 2026 consisting of revenue expected to be above $90 million and an Adjusted EBITDA margin of 13% to 16%. The Company is not issuing a replacement range at this time . The outlook assumed that clients would continue and increase contracted project work at the same pace as seen in previous years , bu t this did not materialize in June 2026. Saudi Arabia's real GDP declined 4.8% year over year in the second quarter, driven by a 24.7% decline in oil activities following disruption to crude exports. Non - oil activities grew 0.6%, down from 2.9% in the first quarter. Oil receipts fund the government and government - affiliated prog rams that set the technology budgets the Company serves, which is the channel through which the slowdown has reached the Company. Despite the regional uncertainty, NTG maintaining a solid base of business in the face of Saudi GDP shrinkage, and is growing faster than the Saudi economy as a whole. With strong Q3 Purchase Order volume, NTG’s focus will be on collecting outstanding receivables to protect cash and executing on new engagements using its already - established delivery staff. “ Regional conditions have lengthened payment cycles across our markets, and cash collection is where we fell short this quarter. We collected approximately $ 1 5 million in the second quarter against approximately $20 million in the first. We did not adjust quickly enough. Our executive team is now directly involved in
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2 collections, working the balance customer by customer. July collections were approximately $ 8 million ,” said Adam Zaghloul, Vice President of Strateg y & Planning at NTG Clarity. Work Valued at $16. 8 Million NTG Clarity is also pleased to announce that it has received new purchase orders ("POs") and contract renewals totaling approximately $16. 8 M CAD. This brings Q3 2026 purchase order announcements t o date to $3 3 .4M CAD. $1M in new purchase orders for offshore and onsite software development services o $593K in new purchase orders with three new and one existing customer o $ 432K in new purchase orders with an existing real estate development customer These POs represent billings against the previously announced three - year framework contract announced in March 2026. These POs cover a portion of the expected work for the remainder of 2026 only, with additional POs expected for 2027 and beyond as the enga gement continues. $ 15.7 M in contract renewals, expansions, and related purchase orders with existing customers: o $ 5.3 M in renewed POs and contracts for offshore and onsite software development services. o $6.2M in purchase orders for offshore software develop ment services. These POs represent billings against the previously announced $53M three - year framework contract announced in August 2024. o $4. 2 M in purchase orders for offshore software development services. These POs represent billings against the previously announced $ 22 M three - year framework contract announced in December 2024. $ 59 K in new purchase orders for NTGapps for an existing Telecom customer. " Deal flow in the second quarter , including both new work and renewals, was materially slower tha n our expectations as clients across the region extended decision timelines. However, w e are keeping our delivery capacity in place because t he region's digital transformation programs have not gone away . We have announced $ 33.4 million of purchase orders in the third quarter to date ," said Adam Zaghloul, Vice President of Strategy & Planning at NTG Clarity. “Our delivery staff are a key asset to NTG and rebuilding a delivery team of this quality takes far longer than the gap we are managing through . With s trong PO volume in Q3 including expanded engagements and substantial new customer orders, we expect consistent demand for NTG’s services to continue , reflecting NTG’s reputation and the satisfaction of our customers .” Conference Call Details On Friday, August 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 Q2 2026 Earnings Call When : Friday, August 28, 2026, at 9:00 AM ET Where : Live webcast can be acces sed from the Teams Event Page: https://link.ntgapps.com/2026Q2 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
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3 end of the day Thursday, August 27, 2026, to: Adam Zaghloul, Vice President, Strategy & Planning Email: adam@ntgclarity.com Income S tatement H ighlights for the Quarter E nded June 3 0 , 202 6 and 202 5 June 3 0 , 20 2 6 June 3 0 , 202 5 REVENUE $ 20,084,681 $ 18,876,105 COST OF SALES 13,350,385 11,717,002 GROSS PROFIT $ 6,734,296 $ 7,159,103 SG&A 6, 860 , 919 4 , 501 , 303 (Gain) loss on foreign exchange (205,305) 1,179,889 Other Expenses 138,203 157,264 Exchange (gain) loss on translation (492,985 ) 61,901 Provision for income taxes ( 1,848,275 ) 856,166 Comprehensive Income $ 2,281,739 $ 402,580 per share (basic) $ 0. 0 5 $ 0. 0 1 per share (fully diluted) $ 0. 0 4 $ 0. 0 1 Balance Sheet Highlights June 3 0 , 2026 December 31, 202 5 Total Assets $ 48,093,021 $ 45,593,092 Total Liabilities $ 17,296,747 $ 18,180,961 Shareholder’s Equity $ 30,796,274 $ 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 and amortization. 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, s hare - 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 addit ion 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
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4 business activities prior to consideration of how those activities are fin anced, 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 c apital 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 met hod 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 i n this MD&A reconcile to the IFRS measures reported in the Consolidated Financial Statements as follows, unless reconciled elsewhere: For the three months ended Adjusted EBITDA June 30, 2026 June 30, 2025 Net Income (Margin) $ 2,281,739 (11%) $ 402,580 (2%) Add back: (Gain) loss on foreign exchange (205,305) 1,179,889 Depreciation 300,508 195,665 Amortization 132,183 132,183 Interest, net 51,102 55,156 Taxes (1,848,275) 856,166 Foreign Taxes 3,892 (488) Other income (161,698) (211,025) Share - based payment 0 117,956 Loss on joint venture (237,746) 0 Impairment on joint venture 26,085 0 Loss on investment 93,636 0 Impairment loss on investment 62,424 0 Loss on disposal of assets 0 0 Less: Exchange gain arising on translation of foreign operations (492,985) (61,901) Adjusted EBITDA (Margin) $ 5,56 0 (0%) $ 2,789,983 (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
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5 enterprises including financial institutions and network service providers. More than 1, 4 00 IT and network professionals provide design, engineering, implementation, softwa re 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 lo oking information includes, but is not limited to, statements with respect to: 202 6 financial guidance including anticipated revenue and adjusted EBITDA margin; anticipated activity levels and operating results; projections based on current backlog; corpor ate 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, c ompetitive, 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 qualificati ons 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 basi s. 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 o f the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.