TeraGo Q1 2026 Earnings Report

TeraGo EPS Results

• Actual EPS: -C$0.08
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

TeraGo Revenue Results

• Actual Revenue: $6.17 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

TeraGo Announcement Details

• Quarter: Q1 2026
• Date: 5/12/2026
• Time: After Market Closes
• Conference Call Date: Wednesday, May 13, 2026
• Conference Call Time: 10:00AM ET

TeraGo (TSE:TGO) provides managed network and security services to businesses across Canada ensuring highly secure, reliable, and redundant connectivity including private 5G wireless networks, Fixed Wireless access, fiber, and cable wireline network connectivity. As Canada's biggest mmWave spectrum holders, the Company possesses spectrum licenses in the 24 GHz and 38 GHz spectrum bands, which it utilizes to provide secure, dedicated SLA guaranteed enterprise grade performance that is technology diverse from buried cables ensuring high availability connectivity services. TERAGO serves Canadian and Global businesses operating in major markets across Canada, including Toronto, Montreal, Calgary, Edmonton, Vancouver, Ottawa and Winnipeg, and has been providing wireless services since 1999.

TeraGo Q1 2026 Earnings Call Transcript

Key Takeaways

• Positive Sentiment: Management said it is making progress reshaping the business toward higher-value mid-market and enterprise customers, while moving away from lower-margin or unprofitable accounts to improve long-term revenue quality.
• Positive Sentiment: Customer engagement and bookings improved in the quarter, and the company expects that momentum to translate into a revenue uptick in the back half of 2026 as new multi-site installs are completed.
• Neutral Sentiment: Q1 revenue fell to CAD 6.17 million from CAD 6.4 million a year ago, reflecting weaker prior-year bookings and the intentional churn of non-strategic customers, partly offset by better new sales activity.
• Neutral Sentiment: Adjusted EBITDA was CAD 931,000, slightly below last year, but the company said disciplined cost management and operational efficiencies helped offset the revenue decline. Net loss improved to CAD 3.14 million from CAD 3.5 million.
• Positive Sentiment: The company highlighted improving operating metrics, including ARPA up 1.9% to CAD 1,253 and churn down to 0.9%, and ended the quarter with about CAD 9.8 million in cash.

Presentation

[Operator]

Good morning, ladies and gentlemen. Welcome to TERAGO's first quarter 2026 financial results conference call. Currently, all participants are on a listen-only mode. Following the presentation, we'll conduct a question-and-answer session with pre-qualified analysts on the call. Instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. I'd like to remind everyone that this conference call is being recorded. TERAGO would like to remind listeners that the company's remarks and answers to your questions today may contain forward-looking statements that are based upon management's current expectations. All such statements are made pursuant to the safe harbor provisions and are intended to be forward-looking statements under applicable Canadian securities legislation.

[Operator]

When relying on forward-looking statements to make decisions with respect to the company, you should carefully consider the risks set forth in the Risk Factors section of the 2025 Annual Information Form, which is available on www.sedarplus.ca. Also consider other uncertainties and potential events. Except as may be required by Canadian securities laws, the company does not undertake any obligation to update any forward-looking statement as a result of new information. We would also like to remind listeners that TERAGO uses certain non-GAAP financial measures to arrive at adjusted results to assess its business and to measure overall performance. TERAGO believes that these financial measures provide readers with a better understanding of how management views the company's overall performance. I'll now turn the conference over to TERAGO's Chief Executive Officer, Daniel Vucinic. Sir, the floor is yours.

[Daniel Vucinic, CEO at TERAGO]

Thank you. Good morning, everyone, and welcome to our first quarter 2026 earnings call. Over the past year, we've taken a disciplined approach to reshaping the business, improving operating efficiency, and focusing on customer opportunities that better align with our long-term objectives. That work continued during the first quarter. As part of the process, we've continued to move away from lower margin or unprofitable accounts, which we believe is the right long-term decision for the business. Our objective is to build a stronger, more efficient revenue base with a greater concentration of mid-market and enterprise customers, multi-location opportunities, and higher value connectivity solutions. We continue to see encouraging activity across our sales pipeline and bookings, particularly from customers seeking resilient, high-quality connectivity solutions to support increasingly data-intensive operations.

[Daniel Vucinic, CEO at TERAGO]

In today's rapidly evolving business environment, customers are looking beyond basic connectivity and seeking service providers that are agile, highly responsive, and capable of delivering a true white glove experience. Many organizations are reevaluating incumbent providers in favor of partners that can offer proactive support, operational flexibility, and a stronger commitment to customer success. Across the broader technology and telecommunications sector, we continue to see increasing investments in AI infrastructure, private wireless networks, and advanced 5G applications. As these technologies evolve, enterprise connectivity requirements are becoming increasingly data-intensive and latency sensitive. Millimeter wave spectrum is particularly well suited for high throughput, including high upload speeds and ultra-low latency connectivity environments. As a result, continued industry investment and technological advancement in these areas reinforces the long-term strategic relevance of TERAGO spectrum holdings and wireless network infrastructure.

[Daniel Vucinic, CEO at TERAGO]

For example, recently Ericsson, Qualcomm, and Australia's NBN Co. recently demonstrated gigabit class 5G millimeter wave performance over extended distances using millimeter wave spectrum. Developments such as these continue to reinforce the performance capabilities and long-term relevance of millimeter wave technologies for high capacity wireless applications. At the same time, private wireless and digital twin deployments continue to expand across manufacturing facilities, logistics operations, transportation hubs, warehouses, ports, and mining environments, connecting people and machines with data that is then used to drive significant productivity and efficiency business outcomes. Specific to Canada's ISED recent millimeter wave consultation, they proposed to repurpose the lower 26 GHz band, previously called the 24 GHz, for flexible use. A flexible use decision would mean that millimeter wave spectrum can be used for both mobile and fixed wireless services, whereas today it is only permitted for fixed wireless.

[Daniel Vucinic, CEO at TERAGO]

When we look at service providers in the U.S., they're increasingly leveraging millimeter wave technology to enhance mobile connectivity in densely populated areas such as stadiums, for example, World Cup soccer games coming up, concert arenas, and urban centers. The extremely high capacity, ultra-low latency of millimeter wave spectrum make it ideal for supporting large crowds where conventional mid-band and low-band networks often experience congestion. We are encouraged by the progress ISED made in that 2025 5G millimeter wave consultation on the 26 GHz and 38 GHz bands. As for our operating business, we continue to prioritize improving the quality of our revenue base, managing costs responsibly, and driving greater efficiency across the organization. This includes ongoing reviews of our network footprint, infrastructure utilization, operating costs, and real estate footprint.

[Daniel Vucinic, CEO at TERAGO]

Although the broader operating environment remains competitive, we are encouraged by the level of customer engagement and bookings activity we continue to see in the market. With that said, I'll turn it over to our CFO, Raj Sapra. Raj?

[Raj Sapra, CFO at TERAGO]

Thanks, Dan. Good morning, everyone. Moving on to our Q1 financial results presentation on slide four for an overview of our KPIs. Our average revenue per customer or ARPA in our connectivity business increased by 1.9% to CAD 1,253 in Q1 2026, compared to CAD 1,229 for the same period last year. The continued improvement in ARPA levels is driven by favorable shifts in our customer base and product mix, as Dan alluded to earlier. Our churn was 0.9%, compared to 1.2% for the same period last year. Customer churn is a continued focus of the business, and we continue to improve our initiatives around customer retention, reflecting our ongoing execution of our strategy to enhance customer engagement with a focus on mid-market and large scale customers, as well as implementation of enhanced renewal and retention programs.

[Raj Sapra, CFO at TERAGO]

Turning to slide five, to go through our broader Q1 2026 financial summary. Total revenue for Q1 was CAD 6.17 million, as compared to CAD 6.4 million for the same period last year. The decrease in revenue reflects a combination of lower bookings in the fiscal year 2025, which permeates into the early part of 2026, as well as the company's focus on optimizing its customer base, including the intentional churn of low margin and non-strategic customers. These impacts were partially offset by improved sales bookings in the first quarter of 2026. Adjusted EBITDA was CAD 931,000 in Q1 2026, compared to just over a million CAD for the same period last year. The marginal decrease reflects the earlier mentioned revenue decreases, partially offset by significant disciplined cost management and continued operational efficiencies across the business.

[Raj Sapra, CFO at TERAGO]

Net loss for the quarter was CAD 3.14 million, compared to a net loss of CAD 3.5 million in the same period last year. The decrease in net loss was primarily driven by the change in the stock compensation expense, as there were more option cancellations in Q1 this year versus last year. Moving now to slide six. With respect to the balance sheet, the company ended the first quarter of 2026 with about CAD 9.8 million in cash and cash equivalents. In the first quarter of 2026, the company generated approximately CAD 319,000 in cash from operations, as compared to CAD 0.96 million in the same period last year. With that said, I would like to turn the call back over to Dan. Dan?

[Daniel Vucinic, CEO at TERAGO]

Thanks, Raj. To conclude, we believe the long-term demand environment for enterprise wireless connectivity with true white glove experience remains compelling. As businesses continue to adopt more data-intensive applications and require greater network performance, reliability, resiliency, demand for high capacity, wireless infrastructure is expected to continue to evolve alongside those requirements. Against that backdrop, TERAGO remains focused on disciplined execution, operational efficiency, customer quality, and long-term shareholder value creation. We believe our wireless network infrastructure and millimeter wave spectrum assets position the company well as enterprise connectivity requirements continue to evolve. That wraps up the prepared remarks for today, and we can now open up the call for questions. Operator, back to you.

[Operator]

Thank you. Everyone at this time will be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Your first question's coming from David McFadgen from ATB Cormark. Your line is live.

[David McFadgen, Analyst at ATB Cormark]

Hi, guys. Couple of questions. On the last call, you said that you thought that by the end of the year, or I guess in the back half of the year, that would be the point in time where you would cycle through these, you know, decommissioning unprofitable contracts and then the new contracts coming on so that the revenue would start to grow. I was just wondering, is that, is that still your outlook? That it would sort of happen, I guess, Q3, Q4 this year?

[Daniel Vucinic, CEO at TERAGO]

Yes. Good morning, David. Yes, that is correct, and that still holds as per the last call. As we are building momentum here at the beginning of the year in terms of, we saw our first quarter, some increase in sales bookings and our pipeline increasing, so closing more of those deals and then installing, because they are multi-site locations. Also our customers, as they're moving away from incumbent providers, don't want to trigger any kind of early termination fees. Different installs will happen at different times. In the latter half of the year, this is where we should be seeing an uptick in revenue and going in the right direction compared to the last few quarters.

[David McFadgen, Analyst at ATB Cormark]

Okay. Excellent. I don't know if you have this statistic readily available, but I was wondering, do you know how many or what the average is in terms of sites per customer or locations per customer?

[Daniel Vucinic, CEO at TERAGO]

Yeah. It really varies, right? Some customers we manage every single site, their primary access, their secondary access, their SD-WAN and so forth. Other customers, we have a portion of their network where they are coming to us for fixed wireless services. Then they may be using other providers and directly working with them. It kind of really depends. Raj, if you have?

[Raj Sapra, CFO at TERAGO]

Yeah.

[Daniel Vucinic, CEO at TERAGO]

Thought to that.

[Raj Sapra, CFO at TERAGO]

Look, I think when Dan came into the business, the business focus was very different. You get any connection, every connection, just get a connection. You know, the average sites across customers has been inching up. I mean, I don't have the number right in front of me, but I think when Dan got here, it was probably like, you know, on an average, if you take all the deployments, was like two sites on an average. I think it is inching up close to double if not more. I just have to look at the numbers. You know, as we sign more enterprise deals and we do have visibility on some of those things in our pipeline, I mean, these numbers will only climb. I can circle back with you, David.

[David McFadgen, Analyst at ATB Cormark]

Okay. Yeah. I mean, I think it'd be an interesting statistic to track.

[Daniel Vucinic, CEO at TERAGO]

Yeah.

[David McFadgen, Analyst at ATB Cormark]

Just, I don't know if there's been any change, but, you know, any idea when ISED it's gonna make a decision here. I know I ask every quarter, but maybe there's been a decision or something new on that front?

[Daniel Vucinic, CEO at TERAGO]

Yeah. It is an important question for sure, right? Yeah. ISED is still keeping their cards close to their chest. Just a reminder for all, ISED closed the consultation June of 2025. We believe, you know, 12 month-ish kind of brings us to the summer of this year, that we're optimistic that hopefully the ISED decision will come out sooner rather than later. Yeah, nothing official from ISED.

[David McFadgen, Analyst at ATB Cormark]

Okay. Let's say, you know, they come out with a decision, they go, okay, we're gonna allow you to do it. We're gonna allow the spectrums to be used for mobile use. Are you gonna do anything different, or it's just the spectrum value would probably go up quite a bit?

[Daniel Vucinic, CEO at TERAGO]

Yeah. A combination there. There's a number of different factors or strategies that are on the table in terms of the mobility play. It could be partnering up with certain partners. It could be launching new services or a combination of both as it relates to that.

[David McFadgen, Analyst at ATB Cormark]

Okay. All right. Okay. That's it for me. Thank you.

[Daniel Vucinic, CEO at TERAGO]

Yeah. Okay, great. Thank you, David.

[Raj Sapra, CFO at TERAGO]

Welcome. Thank you, David.

[Operator]

Thank you. At this time, this concludes our question and answer session. I'd now like to turn the call back over to Mr. Daniel Vucinic for his closing remarks.

[Daniel Vucinic, CEO at TERAGO]

Thanks again, everyone, for joining our call today. I'd like to thank our customers, shareholders who continue to support the company. I would also like to thank everyone at TERAGO who continues to do an outstanding job. We look forward to providing an update on progress on our next quarterly earnings call. Operator?

[Operator]

Thank you for joining us today for TERAGO's first quarter 2026 earnings call.

Participants

Analysts

• Daniel Vucinic, CEO at TERAGO
• David McFadgen, Analyst at ATB Cormark
• Raj Sapra, CFO at TERAGO