DATA Communications Management Bets on Octacom to Drive AI Document Growth

Key Points

• Octacom is central to DCM’s growth strategy: The acquisition adds intelligent document processing capabilities to its print and marketing communications business, with Octacom generating about C$23 million in revenue and growing roughly 30% annually.
• DCM said AI has raised document-validation accuracy to the high-90% range, and it has secured five new Octacom-related customers generating more than C$2 million in incremental revenue within roughly three and a half months.
• Despite a C$30 million revenue decline in 2025 tied partly to Canada Post disruptions, DCM maintained about C$60 million in adjusted EBITDA and expects second-half 2026 revenue growth while managing acquisition debt, capital spending and shareholder returns.

DATA Communications Management TSE: DCM said it is expanding its technology-enabled services business through its recent acquisition of Octacom, positioning the company for growth in intelligent document processing while maintaining its core print and marketing communications operations.

Speaking at the Planet MicroCap Toronto 2026 conference, Chief Financial Officer James Lorimer said DCM generates approximately C$450 million in revenue and employs about 1,600 people following the Octacom acquisition. The company operates primarily in Canada, with 19 facilities across the country and a smaller location near Chicago.

DCM provides print, marketing communications, technology and related services to enterprise customers, including financial institutions, insurers, retailers, healthcare organizations, governments and lottery operators. Lorimer said the company’s top 25 customers have relationships exceeding 10 years, with many extending 25 to 50 years. No single customer represents more than 5% of revenue, while about 90% of revenue comes from its largest 250 clients.

Technology platform and higher-growth services

Lorimer said DCM has shifted from a “print first” approach to a “digital first” strategy since Chief Executive Officer Richard Kellam joined the company more than five years ago. Its technology offerings include campaign-management platform OptiChanl, digital asset-management platform contentcloud.ai, and social media marketing and analytics capabilities acquired through New Zealand-based Zavy in 2024.

DCM’s technology services generated approximately C$28 million in revenue last year, including about C$20 million from subscriptions, programming services and fees, as well as about C$7.5 million from technology hardware sales, according to Lorimer. Those offerings include digital screens, scanning equipment and healthcare patient-identification solutions.

The company views segments such as paperboard packaging, labels, large-format signage, displays and in-store marketing as areas of opportunity within the Canadian print market. Lorimer estimated that market at roughly C$10 billion, of which DCM represents about 5%.

Octacom acquisition targets document-processing demand

DCM acquired Octacom in July, gaining exposure to intelligent document processing, or IDP. The technology uses scanning, optical character recognition, natural-language processing and artificial intelligence to extract and process information from physical and digital documents.

Lorimer said the market is supported by expanding volumes of unstructured data, advancements in AI and regulatory requirements related to personal data access and privacy. He pointed to Quebec’s Law 25 and federal Bill C-36 as examples of regulations that could drive demand for document-processing services.

Octacom generated approximately C$23 million in revenue over the prior 12 months and had grown at roughly 30% annually over the previous three years, Lorimer said. About 10% of its revenue comes from its Odiss software-as-a-service offering. DCM expects the IDP market to grow at more than 30% annually, compared with estimated 1% to 2% growth in the broader print market.

According to Lorimer, AI has improved document-validation rates from a historical range of 60% to 70% into the high-90% range, reducing the need for manual review. The technology can be integrated with customer enterprise resource planning, customer relationship management and other systems.

DCM said it had announced five customer wins since closing the acquisition. Two of the wins were existing DCM customers adopting Octacom applications. Four contracts announced on the day of the presentation represented approximately C$1.5 million in aggregate, while total incremental revenue from the five wins exceeded C$2 million over about three and a half months.

Financial performance and capital allocation

DCM reported approximately C$60 million in adjusted EBITDA last year, representing about 13.5% of revenue, and generated about C$25 million in cash from operations. Lorimer said the company protected its adjusted EBITDA despite a roughly C$30 million revenue decline in 2025.

He attributed the revenue pressure partly to Canada Post disruptions, including a strike late in 2024 and another strike in May 2025. Canada Post is both a customer and an important delivery channel for DCM’s products. Lorimer said the company was beginning to see recovery after postal conditions stabilized and had guided for year-over-year growth during the second half of 2026.

DCM’s 2023 acquisition of the Canadian operations of R.R. Donnelley was described as transformational. The company eliminated four facilities and more than 430 positions while integrating operating systems. Lorimer characterized earlier acquisitions as capability and synergy-focused, while Octacom is intended primarily to add a higher-growth business.

• DCM expects annual capital expenditures to remain in the C$4 million to C$5 million range going forward.
• Net debt stood at approximately C$65 million before the Octacom transaction.
• The company financed C$45 million of the Octacom acquisition with debt.
• DCM pays a quarterly dividend of C$0.025 per share and has been repurchasing shares through its buyback program.

Lorimer said DCM had put a new credit facility in place for the acquisition and expects to maintain appropriate net-debt-to-EBITDA coverage while continuing to generate free cash flow.

About DATA Communications Management (TSE:DCM)

DCM is a leading Canadian tech-enabled provider of print and digital solutions that help simplify complex marketing communications and operations workflow. DCM serves over 2,500 clients including 70 of the 100 largest Canadian corporations and leading government agencies. Our core strength lies in delivering individualized services to our clients that simplify their communications, including customized printing, highly personalized marketing communications, campaign management, digital signage, and digital asset management.

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