VerticalScope Announces Second Quarter 2025 Financial Results
Unless otherwise stated, all amounts are in US dollars.
“In Q2, our platform served 90 million MAUs and generated
Mr. Goodridge added, “The way people find and consume information is changing faster than ever, and that’s creating new opportunities for platforms like ours. VerticalScope’s communities deliver exceptional depth of expertise and engagement. As AI reshapes the digital landscape, we’re focused on scaling what makes us unique — building stronger relationships with our large base of direct users, broadening how we monetize our audiences, and deploying AI to enhance user experience. We have the assets, the talent, and the strategy to capture meaningful growth in the years ahead.”
Financial Highlights for the Three Months Ended June 30, 2025
-
Revenue decreased
13% to , primarily due to a decline in MAUs, which impacted programmatic advertising. This follows a period of record-high MAU in the prior year.$14.5M -
ARPU increased
17% , supported by a41% year-over-year increase in e-commerce revenue. -
Adjusted EBITDA was
, down$4.3M 39% , representing a30% margin (compared to42% in Q2 2024), reflecting lower revenue and increased investments in AI and traffic diversification. -
Operating Cash Flow increased
4% to , inclusive of non-cash working capital changes from acquisitions.$6.4M -
Free Cash Flow totaled
, reflecting$3.7M 87% conversion of Adjusted EBITDA. -
Available Liquidity was
, comprised of$64.1M in unrestricted cash and$8.1M of undrawn revolver capacity.$56.0M -
Net loss was
, compared to net income of$1.8M in the prior year, primarily due to lower revenue and$0.4M in one-time personnel and acquisition costs, partially offset by income tax recovery.$1.6M
“Q2 demonstrated our ability to execute effectively while delivering a healthy Free Cash Flow conversion of
Earnings Conference Call and Webcast
Management will host a conference call and webcast to discuss the Company's financial results at 7 a.m. ET on Wednesday, August 13, 2025.
Live Call Registration and Webcast:
https://events.q4inc.com/attendee/407054365
Joining Live by Telephone:
Participant Access code: 628663
If you are unable to join live, an archived recording of the webcast will be available at: https://investors.verticalscope.com/.
About VerticalScope Holdings Inc.
Founded in 1999 and headquartered in
Forward-Looking Statements
This news release contains forward-looking information within the meaning of applicable securities legislation that reflects the Company's current expectations regarding future events. When used in this news release, words such as “should”, “could”, “intended”, “expect”, “plan” or “believe” and similar expressions indicate forward-looking statements. Forward-looking information, including the Company’s plans for organic growth, deployment of capital, investments in our platform, the growth of revenue and MAU, information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, plans and objectives, is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurances can be given that actual results will be consistent with these forward-looking statements. Such risks and uncertainties include, but are not limited to, the implementation and effectiveness of the Company's capital allocation strategy, the availability of high-quality M&A opportunities, dependence on search algorithms and third-party traffic sources, potential disruption from artificial intelligence technologies, and the factors discussed under "Risk Factors" in the Company’s Annual Information Form dated March 31, 2025, which is available on the Company’s profile on SEDAR Plus at https://sedarplus.ca. Actual results could differ materially from those projected herein. VerticalScope does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.
Non-IFRS Measures
This press release references certain non-IFRS measures, including Adjusted EBITDA and Free Cash Flow, and Free Cash Flow Conversion as described below. This press release also makes reference to MAU, which is an operating metric used in our industry. These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.
The Company uses non-IFRS measures including:
“EBITDA” is calculated as net income (loss) excluding interest, income tax expense (recovery), and depreciation and amortization.
“Adjusted EBITDA” is calculated as EBITDA adjusted for share-based compensation, share performance related bonuses, unrealized gains or losses from changes in fair value of derivative financial instruments, severance, adjustments to contingent consideration liabilities measured at fair value through profit and loss, gain or loss on sale of assets, gain or loss on sale of investments, foreign exchange loss (gain), realized and unrealized other loss (gain) and other charges that include direct and incremental business acquisition related costs.
“Adjusted EBITDA Margin” measures Adjusted EBITDA as a percentage of revenue.
“Free Cash Flow” means Adjusted EBITDA less capital expenditures and income taxes paid during the period.
“Free Cash Flow Conversion” is equal to Free Cash Flow for the period divided by Adjusted EBITDA for the period.
“Monthly Active Users” (“MAU”) is defined as the number of individuals who have visited our communities within a calendar month, based on data as measured by Google Analytics. To calculate average MAU in a given period, we sum the total MAU for each month in that period, divided by the number of months in that period.
SOURCE VerticalScope Holdings Inc.
Related Links
http://www.verticalscope.com
The following table sets forth a reconciliation of Adjusted EBITDA and Free Cash Flow to net income (loss):
(Unaudited) |
Three Months Ended June 30, |
Six Months Ended June 30, |
||||||
(in thousands of US dollars) |
2025 |
2024 |
2025 |
2024 |
||||
Net income (loss) |
( |
|
( |
( |
||||
Net interest and financing expense |
816 |
1,075 |
1,563 |
2,238 |
||||
Income tax expense (recovery) |
(935) |
556 |
(1,389) |
431 |
||||
Depreciation and amortization |
4,830 |
4,501 |
9,254 |
9,066 |
||||
EBITDA |
2,918 |
6,555 |
5,220 |
11,173 |
||||
Share-based compensation |
(124) |
368 |
1,128 |
789 |
||||
Share performance related bonus (1) |
— |
— |
— |
(3) |
||||
Unrealized loss (gain) from changes in derivative fair value of financial instruments |
(139) |
19 |
(188) |
75 |
||||
Severance (2) |
1,121 |
— |
1,120 |
— |
||||
Other income |
(2) |
— |
(2) |
— |
||||
Gain on sale of assets |
(3) |
(1) |
(3) |
(5) |
||||
Gain on sale of investments |
— |
— |
— |
(16) |
||||
Foreign exchange loss |
17 |
— |
73 |
28 |
||||
Realized other loss |
26 |
— |
94 |
— |
||||
Unrealized other loss |
(26) |
— |
— |
— |
||||
Other charges (3) |
509 |
135 |
497 |
262 |
||||
Adjusted EBITDA |
4,299 |
7,076 |
7,940 |
12,302 |
||||
Less capital expenditures |
(266) |
(399) |
(711) |
(834) |
||||
Income taxes received (paid) |
(287) |
(120) |
(362) |
258 |
||||
Free Cash Flow |
|
|
|
|
(1) |
|
Share performance related bonus is included in wages and consulting on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). |
(2) |
|
Severance is included in wages and consulting on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). |
(3) |
|
Other charges are included in wages and consulting and general and administrative on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). For the three months ended June 30, 2025, these charges include direct and incremental business acquisition related costs. |
VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Financial Position
(In (Unaudited) |
||||
|
June 30, |
December 31, |
||
|
2025 |
2024 |
||
|
|
|
||
Assets |
|
|
||
|
|
|
||
Current assets: |
|
|
||
Cash |
|
|
||
Restricted cash |
102,967 |
97,244 |
||
Trade and other receivables |
11,533,480 |
14,874,882 |
||
Lease receivable |
49,302 |
326,267 |
||
Income taxes receivable |
822,621 |
784,332 |
||
Prepaid expenses |
886,005 |
761,652 |
||
Derivative instruments |
43,140 |
— |
||
|
21,581,127 |
22,033,692 |
||
|
|
|
||
Property and equipment |
349,587 |
482,276 |
||
Right-of-use asset |
1,288,772 |
1,564,687 |
||
Intangible assets |
38,961,754 |
37,597,990 |
||
Goodwill |
52,635,164 |
52,635,164 |
||
Other assets |
144,288 |
154,497 |
||
Deferred tax asset |
19,174,931 |
17,937,708 |
||
|
|
|
||
Total assets |
|
|
||
|
|
|
||
Liabilities and Shareholders' Equity |
||||
|
|
|
||
Current liabilities: |
|
|
||
Accounts payable and accrued liabilities |
|
|
||
Income taxes payable |
224,015 |
426,778 |
||
Derivative instruments |
— |
145,068 |
||
Deferred revenue |
1,394,824 |
1,125,592 |
||
Current portion of long-term debt |
646,004 |
687,875 |
||
Lease liability |
683,650 |
946,626 |
||
|
11,522,690 |
10,196,195 |
||
|
|
|
||
Long-term debt |
44,000,000 |
38,000,000 |
||
Lease liability |
936,673 |
1,180,878 |
||
Deferred tax liability |
7,585 |
315,607 |
||
Other long-term liabilities |
26,612 |
26,612 |
||
Total liabilities |
56,493,560 |
49,719,292 |
||
|
|
|
||
Shareholders' equity: |
|
|
||
Share capital |
158,703,767 |
163,250,013 |
||
Contributed surplus |
22,552,185 |
25,413,119 |
||
Other comprehensive loss |
(145,494) |
(145,494) |
||
Deficit |
(103,468,395) |
(105,830,916) |
||
|
77,642,063 |
82,686,722 |
||
Total liabilities and shareholders' equity |
|
|
VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss)
(In (Unaudited) |
||||||||
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||
|
|
2025 |
2024 |
2025 |
2024 |
|||
|
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Revenue |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Operating expenses: |
|
|
|
|
|
|||
Wages and consulting |
|
8,276,004 |
6,822,678 |
15,438,208 |
13,762,711 |
|||
Share-based compensation |
|
(124,142) |
367,575 |
1,127,851 |
788,816 |
|||
Platform and technology |
|
2,074,497 |
1,675,344 |
3,714,095 |
3,218,879 |
|||
General and administrative |
|
1,382,546 |
1,268,179 |
2,443,011 |
2,460,804 |
|||
Depreciation and amortization |
|
4,830,349 |
4,500,984 |
9,253,924 |
9,065,612 |
|||
|
|
16,439,254 |
14,634,760 |
31,977,089 |
29,296,822 |
|||
|
|
|
|
|
|
|||
Operating income (loss) |
|
(1,898,938) |
2,052,756 |
(3,871,256) |
2,114,138 |
|||
|
|
|
|
|
|
|||
Other expenses (income): |
|
|
|
|
|
|||
Other income |
|
(1,824) |
— |
(1,824) |
— |
|||
Gain on sale of assets |
|
(2,601) |
(1,098) |
(2,941) |
(4,718) |
|||
Net interest and financing expense |
|
815,644 |
1,074,882 |
1,563,462 |
2,237,814 |
|||
Gain on sale of investments |
|
— |
— |
— |
(16,398) |
|||
Foreign exchange loss |
|
17,385 |
261 |
73,040 |
27,641 |
|||
Realized other loss |
|
26,453 |
— |
94,030 |
— |
|||
Unrealized other loss |
|
(26,453) |
— |
— |
— |
|||
|
|
828,604 |
1,074,045 |
1,725,767 |
2,244,339 |
|||
|
|
|
|
|
|
|||
Income (loss) before income taxes |
|
(2,727,542) |
978,711 |
(5,597,023) |
(130,201) |
|||
|
|
|
|
|
|
|||
Income tax expense (recovery) |
|
|
|
|
|
|||
Current |
|
(255,579) |
163,747 |
155,905 |
252,365 |
|||
Deferred |
|
(679,785) |
391,866 |
(1,545,241) |
178,929 |
|||
|
|
(935,364) |
555,613 |
(1,389,336) |
431,294 |
|||
|
|
|
|
|
|
|||
Net income (loss) |
|
( |
|
( |
( |
|||
|
|
|
|
|
|
|||
Other comprehensive income (loss) |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Items that may be reclassified to net income (loss): |
|
|
|
|
|
|||
Foreign currency differences on translation of foreign operations |
|
— |
(13,399) |
— |
12,846 |
|||
|
|
|
|
|
|
|||
Total comprehensive income (loss) |
|
( |
|
( |
( |
|||
|
|
|
|
|
|
|||
Earnings (loss) per share: |
|
|
|
|
|
|||
Basic |
|
( |
|
( |
( |
|||
Diluted |
|
(0.08) |
0.02 |
(0.19) |
(0.03) |
VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Cash Flows
(In (Unaudited) |
||||||||
|
|
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||
|
|
2025 |
2024 |
2025 |
2024 |
|||
|
|
|
|
|
|
|||
Cash provided by (used in): |
|
|
|
|
|
|||
|
|
|
|
|
|
|||
Operating activities: |
|
|
|
|
|
|||
Net income (loss) |
|
( |
|
( |
( |
|||
Items not involving cash: |
|
|
|
|
|
|||
Depreciation and amortization |
|
4,830,349 |
4,500,984 |
9,253,924 |
9,065,612 |
|||
Net interest and financing expense |
|
815,644 |
1,074,882 |
1,563,462 |
2,237,814 |
|||
Gain on sale of assets |
|
(2,601) |
(1,098) |
(2,941) |
(4,718) |
|||
Gain on sale of investments |
|
— |
— |
— |
(16,398) |
|||
Unrealized loss (gain) in derivative instruments |
|
(138,557) |
19,035 |
(188,208) |
74,703 |
|||
Unrealized other gain |
|
(26,453) |
— |
— |
— |
|||
Income tax expense (recovery) |
|
(935,364) |
555,613 |
(1,389,336) |
431,294 |
|||
Share-based compensation |
|
(124,142) |
367,575 |
1,127,851 |
788,816 |
|||
|
|
2,626,698 |
6,940,089 |
6,157,065 |
12,015,628 |
|||
Change in non-cash operating assets and liabilities |
|
4,792,347 |
414,915 |
5,027,900 |
1,858,879 |
|||
Interest paid |
|
(690,393) |
(1,070,476) |
(1,414,940) |
(2,233,328) |
|||
Income taxes received (paid) |
|
(287,300) |
(119,557) |
(362,330) |
257,529 |
|||
|
|
6,441,352 |
6,164,971 |
9,407,695 |
11,898,708 |
|||
|
|
|
|
|
|
|||
Financing activities: |
|
|
|
|
|
|||
Repayment of term loan |
|
— |
(625,000) |
— |
(1,250,000) |
|||
Proceeds from issuance of revolving loan |
|
3,000,000 |
— |
6,000,000 |
— |
|||
Repayment of revolving loan |
|
— |
(5,875,000) |
— |
(8,250,000) |
|||
Cash settlement for vested RSUs |
|
(119,753) |
— |
(119,753) |
— |
|||
Repurchase of share capital for cancellation |
|
(1,845,070) |
(435,859) |
(1,845,070) |
(669,085) |
|||
Lease payments |
|
(232,372) |
(340,661) |
(555,651) |
(701,643) |
|||
Proceeds from sublease |
|
138,002 |
147,878 |
278,942 |
297,956 |
|||
|
|
940,807 |
(7,128,642) |
3,758,468 |
(10,572,772) |
|||
|
|
|
|
|
|
|||
Investing activities: |
|
|
|
|
|
|||
Additions to property and equipment and intangible assets |
|
(268,712) |
(399,007) |
(714,654) |
(833,618) |
|||
Proceeds from sale of assets |
|
2,601 |
1,967 |
2,941 |
6,081 |
|||
Proceeds from sale of investments |
|
— |
— |
— |
16,398 |
|||
Acquisitions |
|
(4,038,028) |
(200,178) |
(9,494,430) |
(200,178) |
|||
|
|
(4,304,139) |
(597,218) |
(10,206,143) |
(1,011,317) |
|||
|
|
|
|
|
|
|||
Increase (decrease) in cash |
|
3,078,020 |
(1,560,889) |
2,960,020 |
314,619 |
|||
|
|
|
|
|
|
|||
Cash, beginning of period |
|
5,014,293 |
7,908,036 |
5,189,315 |
6,015,184 |
|||
|
|
|
|
|
|
|||
Change in restricted cash balances |
|
(9,052) |
(3,287) |
(5,723) |
979 |
|||
Effect of movement of exchange rates on cash and restricted cash held |
|
60,351 |
(22,881) |
— |
(9,803) |
|||
|
|
|
|
|
|
|||
Cash, end of period |
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20250812849038/en/
For further information
Investor and media inquiries:
VerticalScope — Vincenzo Bellissimo, Chief Financial Officer, Tel: 416-341-7166, IR@verticalscope.com
FNK IR — Matt Chesler, CFA, Tel: 646-809-2183, fora@fnkir.com
Source: VerticalScope Holdings Inc.