VerticalScope Announces Second Quarter 2026 Financial Results

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Postmedia has not reviewed the content. by Business Wire VerticalScope Announces Second Quarter 2026 Financial ResultsAuthor of the article: You can save this article by registering for free here. Or sign-in if you have an account.Posts year-over-year MAU and Adjusted EBITDA growth Adjusted EBITDA Margin expands to 32% with 81% Free Cash Flow Conversion Revenue increased 20% from Q1, outpacing seasonal trendsTHIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLYSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman, and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.SUBSCRIBE TO UNLOCK MORE ARTICLESSubscribe now to read the latest news in your city and across Canada.Exclusive articles from Barbara Shecter, Joe O'Connor, Gabriel Friedman and others.Daily content from Financial Times, the world's leading global business publication.Unlimited online access to read articles from Financial Post, National Post and 15 news sites across Canada with one account.National Post ePaper, an electronic replica of the print edition to view on any device, share and comment on.Daily puzzles, including the New York Times Crossword.REGISTER / SIGN IN TO UNLOCK MORE ARTICLESCreate an account or sign in to continue with your reading experience.Access articles from across Canada with one account.Share your thoughts and join the conversation in the comments.Enjoy additional articles per month.Get email updates from your favourite authors.THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK.Create an account or sign in to continue with your reading experience.Access articles from across Canada with one accountShare your thoughts and join the conversation in the commentsEnjoy additional articles per monthGet email updates from your favourite authorsSign In or Create an AccountUnless otherwise stated, all amounts are in US dollars.TORONTO — VerticalScope Holdings Inc. (“VerticalScope” or the “Company”) (TSX: FORA; OTCQX: VFORF), a technology company that has built and operates a cloud-based digital platform for online enthusiast communities, today announced financial results for the second quarter ended June 30, 2026 (“Q2” or “the quarter”).“Q2 delivered the gains we’ve been building toward and marked a turning point,” said Chris Goodridge, CEO of VerticalScope. “Revenue grew 20% over Q1, which outpaced our typical seasonal growth patterns, while Adjusted EBITDA grew both sequentially and year-over-year, with margins expanding to 32%. MAU also increased by 14%. Our results highlight our core fundamentals: a high-intent audience, a cost base we rigorously optimize, and a disciplined cash-generating model.”Get the latest headlines, breaking news and columns.By signing up you consent to receive the above newsletter from Postmedia Network Inc.A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Top Stories will soon be in your inbox.We encountered an issue signing you up. Please try again“We are growing our investments in AI and we’re starting to see that reflected in our results,” added Mr. Goodridge. “AI is driving improvement in programmatic monetization and is powering new Fora commerce experiences, contributing new sources of revenue. AI is also making us a more efficient business, helping us reduce our operating expenses by re-aligning our workforce, and invest into our applied AI work with AltaML, where the agentic workflows being created are expected to deliver growth and further efficiency.”Financial Highlights for the Three Months Ended June 30, 2026 (“Q2 2026”). All comparatives, unless otherwise noted, are versus the same period in the prior year.Revenue grew 20% sequentially from Q1 to $13.8M, exceeding typical seasonal patterns, and declined 5% year-over-year. The improvement was led by programmatic advertising, including contributions from AudienceEngine, and continued growth in direct advertising.Net loss narrowed to $0.8M, or ($0.04) per share, from $1.8M in the prior year, as operating expenses declined $2.1M. The result includes $4.0M in non-cash depreciation and amortization. Excluding these charges, underlying operations remained profitable and cash flow positive.Adjusted EBITDA grew 4% to $4.5M, with Adjusted EBITDA Margin expanding to 32% from 30%. The improvement reflects the cost savings executed in April and early efficiencies from expanding applied AI use across the organization.Liquidity remained strong at $75.3M, including $7.3M in unrestricted cash, after repaying $12.0M in debt during the quarter. Free Cash Flow was $3.6M, representing an 81% conversion from Adjusted EBITDA, reflecting $0.4M of planned investment in AI initiatives.“Our balance sheet is doing exactly what we built it to do,” said Vince Bellissimo, CFO of VerticalScope. “In the quarter, we converted 81% of Adjusted EBITDA into Free Cash Flow, inclusive of $0.4 million in applied AI capital investments. Year-to-date, we have reduced debt by $6 million, reflecting a $12 million repayment in Q2, offset by our $6 million July draw to fund our strategic investment in AltaML via a secured promissory note and warrant. While operating cash flow reflects receivables growth as AudienceEngine scales, those balances convert quickly to cash. Our near-term capital priorities remain unchanged: grow our high-conviction AI investments and continue to strengthen our balance sheet.”Selected Business Performance Information(Unaudited)Three Months Ended June 30,Six Months Ended June 30,(in millions)2026202520262025Revenue$13.8$14.5$25.4$28.1Net loss($0.8)($1.8)($4.0)($4.2)Adjusted EBITDA$4.5$4.3$6.8$7.9Cash flow from operations$0.4$6.4$3.9$9.4Free Cash Flow$3.6$3.7$5.6$6.9Adjusted EBITDA Margin32%30%27%28%Free Cash Flow Conversion81%87%83%86%Earnings Conference Call and WebcastManagement will host a conference call and webcast to discuss the Company’s financial results at 8:00 a.m. ET on Friday, August 14, 2026.Live Call Registration and Webcast: https://www.netroadshow.com/events/login/1PeTHmohOPwo1FwQg6j37HZoSO27hjT2AOYLt Joining Live by Telephone: Canada: 1 833 950 0062 United States: 1 833 470 1428 Participant Access code: 266510If you are unable to join live, an archived recording of the webcast will be available at: https://investors.verticalscope.com/.The Company’s applied AI engagement and investment with AltaML, as previously disclosed, are related party transactions. Cory Janssen, a director of the Company, is the Chief Executive Officer of AltaML. Mr. Janssen did not participate in the Board of Directors’ approval of either transaction. Both transactions were negotiated at arm’s length and on commercially reasonable terms. For additional details, including applicable exemptions under Multilateral Instrument 61-101, refer to the Company’s condensed consolidated interim financial statements for the three and six months ended June 30, 2026.About VerticalScope Holdings Inc.Founded in 1999 and headquartered in Toronto, Ontario, VerticalScope is a technology company that has built and operates a cloud-based digital platform for online enthusiast communities in high consumer spending categories. VerticalScope’s mission is to enable people with common interests to connect, explore their passions, and share knowledge about the things they love. Through targeted acquisitions and development, VerticalScope has built a portfolio of over 1,200 online communities and approximately 100 million monthly active users.Forward-Looking StatementsThis 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.This advertisement has not loaded yet.This advertisement has not loaded yet, but your article continues below.Forward-looking information in this release includes statements about the Company’s positioning and outlook for 2026, expected stabilization and growth in MAU and direct advertising revenue, cost actions executed during the quarter, the Company’s ability to apply AI and agentic workflows across its platform and operations to improve monetization and drive operating leverage, the expected impact of the Company’s applied AI engagement with, and investment in AltaML, the Company’s ability to scale new AI-enabled commerce experiences and other new products and achieve projected revenue or contribution levels, the Company’s capital allocation priorities (including debt repayment and balance sheet flexibility), the Company’s ability to pursue selective M&A opportunities, and the performance of the Company’s business model. 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, the Company’s reliance on third-party media-buying, monetization, and distribution platforms in connection with its traffic diversification initiatives, and changes to the policies, algorithms, or commercial terms of those platforms, the impact of artificial intelligence on search behavior, content discovery patterns and user traffic, the Company’s ability to adapt its platform and monetization strategies to AI-mediated discovery, opportunities to monetize content through data licensing arrangements, potential disruption from artificial intelligence technologies, the Company’s ability to realize the anticipated benefits of its applied AI engagement with, and investment in, AltaML and its broader AI initiatives, including operating leverage and cost savings, the Company’s ability to scale new products and achieve projected revenue or EBITDA contribution levels, evolving privacy and data regulations, macroeconomic conditions affecting advertiser spending, changes in international trade policy and tariffs and their potential impact on advertiser spending and consumer behavior, regional and global geopolitical instability, including armed conflicts in the Middle East and their potential impact on the Company’s Israeli operations, personnel, and asset valuations, the Company’s ability to grow its direct user base, the Company’s ability to protect and enforce its intellectual property rights, including against unauthorized use of its content by artificial intelligence companies and other third parties, the outcome, costs, timing and impact of any current or future litigation, regulatory proceedings, or enforcement actions, including those relating to the use of the Company’s content by third parties, and the factors discussed under “Risk Factors” in the Company’s Annual Information Form dated March 31, 2026, 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.This news release references certain non-IFRS measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and Free Cash Flow Conversion as described below. This news 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, unrealized gains or losses from changes in fair value of derivative financial instruments, severance, other income, gain or loss on sale of assets, 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”) measures the total audience reach across the Company’s network and is defined as the sum of unique individuals who visit our communities and content within a calendar month. This metric is based on data, including as measured by Google Analytics, subject to adjustments by the Company to identify and exclude bot traffic, scrapers, and non-human activity. These processes may not capture all non-human traffic. To calculate average MAU for a multi-month period, we sum the total MAU for each month and divide by the number of months in that period. Our MAU reflects both organic visitors and traffic acquired through paid audience-acquisition, creating a blended audience across our enthusiast communities and specialized content properties. Because of this composition, MAU is not solely indicative of community engagement and should be evaluated together with our other operating metrics and results.Related Links http://www.verticalscope.com The following table sets forth a reconciliation of Adjusted EBITDA and Free Cash Flow to net loss:(Unaudited)Three Months Ended June 30,Six Months Ended June 30,(in thousands of US dollars)2026202520262025Net loss($834)($1,792)($3,954)($4,208)Net interest and financing expense5818161,2361,563Income tax expense(238)(935)(1,327)(1,389)Depreciation and amortization3,9684,8309,0479,254EBITDA3,4772,9185,0035,220Share-based compensation423(124)8821,128Unrealized loss (gain) from changes in derivative fair value of financial instruments24(139)51(188)Severance ⁽1⁾3351,1213761,120Other income(7)(2)(26)(2)Gain on sale of assets—(3)(1)(3)Foreign exchange loss25174873Realized other loss—26—94Unrealized other gain—(26)——Other charges ⁽2⁾181509460497Adjusted EBITDA4,4574,2996,7937,940Less capital expenditures(607)(266)(841)(711)Income taxes paid(255)(287)(344)(362)Free Cash Flow$3,596$3,746$5,608$6,866(1)Severance is included in wages and consulting on the condensed consolidated interim statements of net loss.(2)Other charges are included in wages and consulting and general and administrative on the condensed consolidated interim statements of net loss. For the three and six months ended June 30, 2026 and June 30, 2025, these charges include direct and incremental business acquisition related costs and non-recurring legal related costs.VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Financial Position (In US dollars) (Unaudited)June 30,December 31,20262025AssetsCurrent assets:Cash$7,263,958$16,373,449Restricted cash170,715164,496Trade and other receivables19,972,63415,122,763Lease receivable130,409126,668Income taxes receivable67,144349,547Prepaid expenses872,261574,390Derivative instruments—10,72928,477,12132,722,042Property and equipment228,442282,566Right-of-use asset441,762535,990Intangible assets17,833,54025,846,567Goodwill54,908,06354,908,063Other assets89,28973,942Deferred tax asset19,755,42517,871,911Lease receivable33,80699,960Total assets$121,767,448$132,341,041Liabilities and Shareholders’ EquityCurrent liabilities:Accounts payable and accrued liabilities$14,835,230$10,086,039Income taxes payable268,459318,650Derivative instruments39,858—Deferred revenue1,098,8381,011,933Current portion of long-term debt486,128619,313Lease liability494,001448,98217,222,51412,484,917Long-term debt32,000,00044,000,000Lease liability315,335555,399Other long-term liabilities26,61226,612Total liabilities49,564,46157,066,928Shareholders’ equity:Share capital160,236,144159,382,348Contributed surplus23,348,29523,319,659Other comprehensive loss(145,494)(145,494)Deficit(111,235,958)(107,282,400)72,202,98775,274,113Total liabilities and shareholders’ equity$121,767,448$132,341,041VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Net Loss (In US dollars) (Unaudited)Three Months Ended June 30,Six Months Ended June 30,2026202520262025Revenue$13,824,196$14,540,316$25,384,742$28,105,833Operating expenses:Wages and consulting6,804,4138,276,00413,463,61515,438,208Share-based compensation423,257(124,142)882,4321,127,851Platform and technology1,784,4352,074,4973,495,1833,714,095General and administrative1,317,6631,382,5462,519,5832,443,011Depreciation and amortization3,967,5174,830,3499,046,6669,253,92414,297,28516,439,25429,407,47931,977,089Operating loss(473,089)(1,898,938)(4,022,737)(3,871,256)Other expenses (income):Other income(7,090)(1,824)(26,249)(1,824)Gain on sale of assets—(2,601)(632)(2,941)Net interest and financing expense580,543815,6441,236,4881,563,462Foreign exchange loss25,00717,38547,74073,040Realized other loss—26,453—94,030Unrealized other gain—(26,453)——598,460828,6041,257,3471,725,767Loss before income taxes(1,071,549)(2,727,542)(5,280,084)(5,597,023)Income tax expense (recovery)Current449,705(255,579)556,988155,905Deferred(687,299)(679,785)(1,883,514)(1,545,241)(237,594)(935,364)(1,326,526)(1,389,336)Net loss($833,955)($1,792,178)($3,953,558)($4,207,687)Loss per share:Loss per share basic and diluted($0.04)($0.08)($0.18)($0.19)Weighted average shares outstanding basic and diluted21,751,49721,557,54721,713,08721,626,833VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Cash Flows (In US dollars) (Unaudited)Three Months Ended June 30,Six Months Ended June 30,2026202520262025Cash provided by (used in):Operating activities:Net loss($833,955)($1,792,178)($3,953,558)($4,207,687)Items not involving cash:Depreciation and amortization3,967,5174,830,3499,046,6669,253,924Net interest and financing expense580,543815,6441,236,4881,563,462Gain on sale of assets—(2,601)(632)(2,941)Unrealized loss (gain) in derivative instruments23,870(138,557)50,587(188,208)Unrealized other gain—(26,453)——Income tax expense (recovery)(237,594)(935,364)(1,326,526)(1,389,336)Other income587—(18,572)—Share-based compensation423,257(124,142)882,4321,127,8513,924,2252,626,6985,916,8856,157,065Change in non-cash operating assets and liabilities(2,640,073)4,792,347(292,909)5,027,900Interest paid(637,414)(690,393)(1,341,179)(1,414,940)Income taxes paid(254,563)(287,300)(344,019)(362,330)Net cash provided by operating activities392,1756,441,3523,938,7789,407,695Financing activities:Proceeds from issuance of revolving loan—3,000,000—6,000,000Repayment of revolving loan(12,000,000)—(12,000,000)—Cash settlement for vested RSUs—(119,753)—(119,753)Repurchase of share capital for cancellation—(1,845,070)—(1,845,070)Lease payments(135,141)(232,372)(270,380)(555,651)Proceeds from sublease33,972138,00267,942278,942Net cash provided by (used in) financing activities(12,101,169)940,807(12,202,438)3,758,468Investing activities:Additions to property and equipment and intangible assets(606,631)(268,712)(841,393)(714,654)Proceeds from sale of assets—2,6011,7812,941Acquisitions—(4,038,028)—(9,494,430)Net cash used in investing activities(606,631)(4,304,139)(839,612)(10,206,143)Increase (decrease) in cash(12,315,625)3,078,020(9,103,272)2,960,020Cash, beginning of period19,586,3185,014,29316,373,4495,189,315Change in restricted cash balances(6,735)(9,052)(6,219)(5,723)Effect of movement of exchange rates on cash and restricted cash held—60,351——Cash, end of period$7,263,958$8,143,612$7,263,958$8,143,612View source version on businesswire.com: For further information Investor and media inquiries:Notice for the Postmedia NetworkThis website uses cookies to personalize your content (including ads), and allows us to analyze our traffic. 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