Toronto, Ontario--(Newsfile Corp. - November 12, 2025) - NTG Clarity Networks Inc. (TSXV: NCI) (OTC Pink: NYWKF) NTG Clarity ("NTG" or the "Company") today reports its third quarter results for the quarter ended September 30, 2025 (all figures in Canadian Dollars).
Q3 2025 Highlights
All comparisons below are to the quarter ended September 30, 2024, unless otherwise noted
Revenue grew 42% year-over-year to $20.9 million, driven by a 10% increase in accounts YoY and 63% of customers increasing service levels.
Gross Profit rose 32% year-over-year to $7.3 million, representing 35% of revenue, compared to $5.5 million and 37% in the prior year. Gross margin was lower in the quarter, driven largely by a sequential decrease in NTGapps software-related revenue as well as typical fluctuations in revenue mix and customer acquisition/retention pricing incentives.
Net Income was $1.9 million, or 9% of revenue, compared to $2.1 million or 14% in the prior year. The year-over-year decline reflects the Company beginning to pay taxes in 2025 and a $595 thousand tax accrual in Q3 2025.
Adjusted EBITDA was $2.5 million, or 12% of revenue, compared to $3.2 million or 22% of revenue in the prior year. Adjusted EBITDA margins were burdened in the quarter by the hiring of new employees who are expected to be deployed on new contracts towards the end of the year.
Operating Cash Flow use of $3.4 million. The usage primarily reflects timing of accounts receivable collections, impacted by two large projects milestone timing.
"We delivered 42% year-over-year revenue growth this quarter, reflecting sustained client demand and consistent execution across our Saudi Arabian operations. Our backlog continues to provide solid visibility into future revenue, and we remain confident in our ability to deliver on full-year revenue guidance," said Adam Zaghloul, Vice President of Strategy & Planning at NTG Clarity.
"We've made deliberate investments in specialized talent and delivery capacity to support contracts expected to advance through client procurement. While it has taken longer to close these contracts, resulting in temporarily elevated SG&A, these investments are directly aligned with our growth strategy and position us for margin expansion as new projects mobilize in Q4 and beyond."
"As these investments begin to translate into new contracts, we remain focused on operational discipline and cash conversion. Q3 cash flow was temporarily impacted by milestone billing timing with key clients, and we expect meaningful improvement in Q4 as collections accelerate and new projects begin contributing."
Financial Outlook for 2025
The trend of continued growth allows us to affirm our revenue guidance for 2025 of approximately $78 million. In the first nine months of 2025 NTG invested heavily in preparing for new, larger engagements expected to be signed in the second half of 2025. These engagements are still in the pipeline but are taking longer than anticipated to close, resulting in the company carrying growth-related expenses such as undeployed resource salaries and office expenses longer than expected without booking related revenue.
Other investments were made into attending conferences and tradeshows to further expand NTG's brand awareness, as well as in expanding our geographic offering in several ways:
In Cairo, Egypt, we continue to increase the footprint of our Egypt Offshore Centre to support current and future expected demand, bringing our Egypt Offshore Centre to nine floors of office space across four separate locations in Cairo.
In Baghdad, Iraq, we have established a branch entity and an office from which we are marketing NTG's products and services to the region. This strategic expansion complements our existing presence in Sulaymaniyah, Iraq, and was timed to capitalize on Iraq's accelerated digital transformation, particularly in the telecommunications and financial sectors. The new branch positions NTG to directly address local market needs and strengthens our presence in this fast-growing market.
In Dubai, UAE, we have established a corporate entity to expand our business development efforts in Dubai and Abu Dhabi with various government organizations. We have started two proof of concept projects for implementing NTG's AI solutions including testing as a service and testing automation for a customer in Dubai.
In Madinah, Saudi Arabia we have secured office space and recruited talent for the purposes of establishing a Madinah Nearshore Centre. A major focus of Saudi Arabia's Vision 2030 is educating, upskilling, and employing the local population to fill technical roles. By hiring, onboarding, and training resources in areas outside of the capital like Madinah, NTG offers its customers a nearshore alternative employing Saudi locals while capitalizing on government subsidies and benefits to maintain cost competitiveness.
While we affirm our 2025 revenue guidance, due to the resulting compression of our Net Income and Adjusted EBITDA margins we are revising our Adjusted EBITDA guidance for 2025:
Revenue: Expected to be approximately $78 million
Adjusted EBITDA Margin: Now forecasted in the range of 12% - 16% instead of the previously guided 16% - 20%
In 2025 our strategic priorities are:
Expand and solidify our position as an integral part of clients' long-term digital strategy, leveraging our superior cost structure, quality offerings, and trusted relationships built over multiple years of service.
Win new customers through the expanding network effect of recommendations from current and past clients.
Increase adoption and traction of NTGapps, positioning them as essential tools within our clients' digital ecosystems.
Conference Call Details
On Thursday, November 13, 2025, at 9:00 AM ET, management will host a conference call webcast to discuss the Company's financial and operating results.
What: NTG Clarity Q3 2025 Earnings Call
When: Thursday, November 13, 2025, at 9:00 AM ET
Where: Live webcast can be accessed from the Events page of NTG's website: https://ntgclarity.com/events/third-quarter-2025-earnings-conference-call-ntg-clarity/
Management will be hosting a Q&A at the end of the call; however, to streamline the earnings conference call, we ask any questions to be emailed along with the asker's name and company, if applicable, by the end of the day Wednesday, November 12, 2025, to:
Adam Zaghloul, Vice President, Strategy & Planning
Email: adam@ntgclarity.com
Income Statement Highlights for the Quarter Ended September 30, 2025 and 2024
| September 30, 2025 | September 30, 2024 | |||||
| REVENUE | $ | 20,867,138 | $ | 14,671,878 | ||
| COST OF SALES | 13,589,960 | 9,176,427 | ||||
| GROSS PROFIT | $ | 7,277,178 | $ | 5,495,451 | ||
| SG&A | 4,919,398 | 2,447,492 | ||||
| (Gain) loss on foreign exchange | (236,214 | ) | 200,143 | |||
| Other Expenses | 207,038 | 825,325 | ||||
| Exchange (gain) loss on translation | (112,472 | ) | (31,465 | ) | ||
| Provision for income taxes | 594,865 | 0 | ||||
| Comprehensive Income | $ | 1,904,562 | $ | 2,053,955 | ||
| per share (basic) | $ | 0.04 | $ | 0.05 | ||
| per share (fully diluted) | $ | 0.04 | $ | 0.05 | ||
Balance Sheet Highlights
| September 30, 2025 | December 31, 2024 | |||||
| Total Assets | $ | 44,230,351 | $ | 28,292,859 | ||
| Total Liabilities | $ | 17,263,851 | $ | 15,691,675 | ||
| Shareholder's Equity | $ | 26,966,501 | $ | 12,601,184 | ||
Non-GAAP Financial Measures
NTG references Adjusted EBITDA, which is a non-IFRS (non-GAAP) measure and Adjusted EBITDA margin, which is a non-GAAP ratio. Adjusted EBITDA means adjusted earnings before interest, taxes, depreciation and amortization. EBITDA is equal to net income (loss) before income taxes plus finance costs plus depreciation. Adjusted EBITDA is equal to EBITDA before other discretionary expenses and expenses outside of the control of NTG. In NTG's case these are other income, share-based payments, and expenses related to foreign exchange. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of total revenue.
Adjusted EBITDA and Adjusted EBITDA margin are not recognized measures under IFRS. Management believes that in addition to net income (loss), Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental measures as they provide an indication of the results generated by the Company's primary business activities prior to consideration of how those activities are financed, amortized, or how the results are taxed and consolidated in various jurisdictions and currencies as well as the cash generated by the Company's primary business activities without consideration of the timing of the monetization of non-cash working capital items.
NTG also references Free Cash Flow, which is a non-IFRS (non-GAAP) measure. Free Cash Flow means cash provided by operating activities less capital expenditures. In NTG's case, Free Cash Flow is equal to net cash from operating activities as reported in the consolidated statements of cash flows, reduced by the purchase of property and equipment.
Free Cash Flow is not a recognized measure under IFRS. Management believes that in addition to net cash from operating activities, Free Cash Flow is a useful supplemental measure as it provides insight into the cash generated by the Company's primary business activities after funding required capital expenditures, and it reflects the Company's ability to pursue strategic growth, repay debt, or return capital to shareholders.
Readers should be cautioned, however, that Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of the Company's performance. Neither should Free Cash Flow be construed as an alternative to net cash from operating activities as determined in accordance with IFRS as an indicator of the Company's performance. The Company's method of calculating Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow may differ from other organizations and, accordingly, Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow may not be comparable to measures used by other organizations.
The non-IFRS measures referenced in this release reconcile to the IFRS measures reported in the Consolidated Financial Statements as follows, unless reconciled elsewhere:
| For the three months ended | ||||||
| Adjusted EBITDA | September 30, 2025 | September 30, 2024 | ||||
| Net Income (Margin) | $ | 1,904,562 (9%) | $ | 2,443,374 (14%) | ||
| Add back: | ||||||
| (Gain) loss on foreign exchange | (236,214 | ) | 123,731 | |||
| Depreciation | 232,119 | 66,224 | ||||
| Amortization | 132,184 | 132,184 | ||||
| Interest, net | 33,985 | 90,662 | ||||
| Taxes | 594,865 | 240,804 | ||||
| Other income | (107,012 | ) | (52,848 | ) | ||
| Share-based payment | 40,117 | 480,482 | ||||
| Loss on joint venture | 0 | 0 | ||||
| Loss on disposal of assets | 0 | 0 | ||||
| Less: | ||||||
| Exchange gain arising on translation of foreign operations | 112,472 | 31,465 | ||||
| Adjusted EBITDA (Margin) | $ | 2,489,962 (12%) | $ | 3,180,141 (22%) | ||
| For the three months ended | ||||||
| Free Cash Flow | September 30, 2025 | September 30, 2024 | ||||
| TOTAL CASH IN-FLOW FROM OPERATING ACTIVITIES | $ | (3,361,799 | ) | $ | 598,249 | |
| Less: | ||||||
| Purchase of property, plant and equipment | 755,053 | 306,964 | ||||
| Free Cash Flow | $ | (4,116,852 | ) | $ | 291,285 | |
About NTG Clarity Networks Inc.
NTG Clarity Networks' vision is to be a global leader in digital transformation solutions. As a Canadian company established in 1992, NTG Clarity has delivered software, networking, and IT solutions to large enterprises including financial institutions and network service providers. More than 1,100 IT and network professionals provide design, engineering, implementation, software development and security expertise to the industry's leading enterprises.
For Further Information:
Adam Zaghloul, Vice President, Strategy & Planning
NTG Clarity Networks Inc.
Ph: 905-305-1325
Fax: 905-752-0469
Email: adam@ntgclarity.com
Forward Looking Information
Certain statements in this release, other than statements of historical fact, are forward looking information that involve various risks and uncertainties. Forward looking information includes, but is not limited to, statements with respect to: 2025 financial guidance including anticipated revenue and adjusted EBITDA margin; anticipated activity levels and operating results; projections based on current backlog; corporate strategies; customer demand and competitive conditions in the markets in which the Company operates.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: future demand for the Company's products and services; the results of research and development activities; access to capital; intellectual property protection; general business, economic, competitive, political and social uncertainties; delays in obtaining governmental approvals; failure to obtain regulatory approvals; reliance on key personnel; stock market volatility; fluctuations in interest rates and exchange rates; and the impact of new laws and regulatory requirements. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about estimated annual revenue and adjusted EBITDA margin, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraph. The actual financial results of the Company may vary from the amounts set out herein and such variation may be material. NTG and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about the Company's anticipated future business operations on an annual basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/274172
SOURCE: NTG Clarity Networks Inc.