Haivision Systems Q3 Earnings Call Highlights

Key Points

• Q3 revenue and profitability declined: Revenue fell 1.4% year over year to CAD 34.5 million, while adjusted EBITDA dropped to CAD 1.5 million from CAD 3.5 million. The company reported a CAD 2.1 million net loss, pressured by delayed deployments and lower gross margins.
• Tariffs and supply-chain issues remain significant headwinds: A 50% tariff affects products representing about 30% of U.S. sales and could reduce consolidated gross margin by roughly 3 percentage points. Haivision has increased inventory and is shifting some fulfillment to a U.S. facility.
• Management remains optimistic but expects guidance near the low end: The pipeline continues to grow, with demand for new products and mission-critical defense, broadcast and enterprise applications, but project timing remains uncertain. Haivision expects fiscal 2026 revenue to be closer to the lower end of its CAD 140 million–CAD 142 million forecast.

Haivision Systems TSE: HAI reported third-quarter fiscal 2026 revenue of CAD 34.5 million, down 1.4% from a year earlier, as timing of customer purchases and deployments weighed on results, particularly in broadcast. Adjusted EBITDA declined to CAD 1.5 million, or a 4.3% margin, from CAD 3.5 million and a 10.1% margin in the prior-year quarter.

President, CEO and Chairman Mirko Wicha said the company continues to see healthy customer engagement and a solid opportunity pipeline despite quarterly variability tied to large deployments, government procurement cycles and supply-chain conditions. He said Haivision remains focused on mission-critical video applications in broadcast, defense, public safety, government and enterprise markets.

“We are not trying to compete in commodity video markets,” Wicha said, emphasizing the company’s focus on applications requiring secure, reliable, ultra-low-latency video transport and management.

Revenue and Profitability

For the first nine months of fiscal 2026, Haivision’s revenue rose 5% to CAD 102.3 million. CFO Dan Rabinowitz said broadcast customers continue to invest but have become more disciplined in purchasing decisions, with greater emphasis on returns on investment, operating efficiencies and project sequencing.

Enterprise demand for secure, high-quality video remained healthy, according to Rabinowitz, while defense revenue was relatively stable. However, defense procurement has been delayed as spending is directed toward readiness priorities, including air defense, counter-drone capabilities and replenishment.

Third-quarter gross margin fell to 69.4% from 72.0% a year earlier. For the first nine months, gross margin was 69.6%, compared with 72.3% in the prior-year period. Rabinowitz attributed the pressure to higher component prices, sole-source component exposure, longer lead times, supplier delivery changes and higher expedite costs.

• Third-quarter operating loss was CAD 1.7 million, compared with operating income of CAD 300,000 a year earlier.
• Net loss was CAD 2.1 million, compared with net income of CAD 200,000 in the prior-year quarter.
• Nine-month adjusted EBITDA was CAD 4.4 million, down from CAD 5.8 million a year earlier.
• Total quarterly expenses were CAD 25.7 million, up CAD 800,000 year over year.

Rabinowitz said expenses have largely stabilized, averaging approximately CAD 25.3 million over the past five quarters. The company has increased research and development spending to support its product-release schedule, while organizational changes reduced some sales, marketing, operations and support expenses.

Tariffs and Supply Chain Pressures

Management said semiconductor availability, component pricing and tariffs remain key challenges. Wicha said supply-chain conditions have remained volatile since February 2022, affecting memory, CPUs, GPUs and other semiconductor technologies.

A 50% tariff affects a significant subset of Haivision’s products, Rabinowitz said. The affected products are primarily the company’s Makito line, which represents about 30% of sales entering the United States. Products including transmitters and platforms such as HMP are not affected, he said.

Rabinowitz estimated that the tariff could reduce consolidated gross margin by about 3 percentage points in the near term. The company has not decided to move production to the United States, but it is shifting fulfillment operations from Montreal to a U.S. facility, where it already has production capability. He said the arrangement can be reversed relatively quickly should tariff conditions change.

Haivision has also raised inventory to protect product availability. Inventory totaled CAD 19.5 million at quarter-end, up CAD 6.2 million from the end of fiscal 2025 and CAD 4.4 million from the preceding quarter. Rabinowitz said the increase reflected deliberate purchases to address constrained supply, longer lead times, supplier decommitments and new product introductions.

Pipeline, Products and Outlook

During the question-and-answer session, Wicha said the company has not received indications that projects have been canceled in government, enterprise or broadcast markets. Instead, the company has seen projects move both earlier and later, particularly amid uncertainty surrounding U.S. defense spending, midterm elections and continuing budget resolutions.

He said Haivision’s pipeline and forecast continue to grow and include larger opportunities expected later in 2027. Management cited customer interest in recently announced and forthcoming products, including the Makito ONE, Falkon X4, Falkon X2, Kraken X1 and Kobra.

Wicha said the Makito ONE is expected to expand Haivision into the JPEG XS market and is designed to support JPEG XS, H.264 and H.265 encoding and decoding on the same blade. He also cited growing interest in Kraken and Kobra products for defense and intelligence, surveillance and reconnaissance-related applications.

At quarter-end, Haivision had CAD 19.7 million in cash and CAD 13.9 million outstanding on its line of credit. Its CAD 35 million credit facility had approximately CAD 21.1 million undrawn and remains committed through August 2028. The company repurchased approximately 990,000 shares for CAD 4.4 million during fiscal 2026 through July 31.

Asked about the company’s previously stated fiscal 2026 revenue guidance of CAD 140 million to CAD 142 million, Rabinowitz said Haivision was “probably closer to the lower end of the range” based on fourth-quarter conditions, while noting that project timing and supply-chain factors could still affect the outcome.

About Haivision Systems (TSE:HAI)

Haivision is a leading global provider of mission-critical, real-time video streaming and visual collaboration solutions. Our connected cloud and intelligent edge technologies enable organizations globally to engage audiences, enhance collaboration, and support decision making. We provide high quality, low latency, secure, and reliable live video at a global scale. Haivision open sourced its award-winning SRT low latency video streaming protocol and founded the SRT Alliance to support its adoption.

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