Quotemedia Inc

Good day, everyone, and welcome to today's Quote Media third quarter results conference call. At this time, all participants are in a listen-only mode. Later, you'll have the opportunity to ask questions during the question-and-answer session. You may register to ask a question at any time by pressing the star and 1 on your telephone keypad. Please note this call is being recorded, and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Dave Shorin. Please go ahead, sir.

Thank you and welcome everyone. We appreciate you joining us today. Before we begin, I have a brief safe harbor statement. Except for historical information contained herein, the statements made in this call include forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve known and unknown risks and uncertainties that could cause actual results to differ materially from those projected. And now we're happy to go through our 2025 third quarter results. 2025 continues to be a very successful year for Quote Media. We're growing and this quarter clearly reflects that momentum. We've delivered a 10% year over year revenue increase and revenue rose 5% sequentially from Q2. This is a solid growth, and importantly, it is supported by several new contracts that will be starting next quarter. Looking ahead, we expect this momentum to continue, and we're forecasting even higher growth numbers for Q4. Our pipeline is strong, and we're in advanced stages on several new large proposals. We are busier than ever. both onboarding new clients and expanding our footprint with existing clients. We're also continuing to expand our products and our data across almost every category, and the response from clients has been overwhelmingly positive. I'd like to touch briefly on profitability trends. Our gross margin improved from 46% to 48%, and we expect our gross margin to continue improving as revenue grows. and as amortization expenses trend downward over time. The same is true for EBITDA and overall profitability, which we expect to strengthen in coming quarters as the impact of previously capitalized development costs continue to diminish. In addition, our deferred revenue finished the quarter at 2.2 million, which reflects strong contracted business that will be recognized in future periods. We're extremely proud of the progress we're making. The products are state-of-the-art. Our data is comprehensive and proprietary, and we continue to differentiate ourselves in the competitive industry. We're successfully winning business from large incumbents, and our market position is strengthening quarter after quarter. It's all very exciting, and we believe that we're extremely well-positioned for continued strong growth heading into 2026. With that, I'll now pass the mic over to Keith Randall to walk us through the financial details for the quarter. And after that, we'll be happy to take any questions. Go ahead, Keith.

Thank you, Dave. Welcome, everyone. I'll start with the income statement. Note that all comparisons are on a year-over-year basis unless otherwise noted. We had a 10% increase in total revenue compared to Q3 2024. and a 5% increase compared to Q2 2025. Corporate closed-stream revenue increased 18%, and interactive content revenue increased 5%. These increases were driven by an increase in average revenue per customer. As we continue to attract larger customers and cross-sell additional products to existing customers, individual closed-stream revenue was relatively flat, increasing 1%. Our cost of revenue consists of fixed and variable stock exchange fees and other data costs and amortization of capital life development costs. Our cost of revenue increased 6%, mainly due to increased variable stock exchange fees related to our increase in revenue, as well as price increases for fixed stock exchange fees. Our gross margin percentage increased from 46 to 48%. as the cost of revenue decreased as a percentage of sales. This is due to an increase in revenue as well as a decrease in amortization expense related to capitalized development costs. We expect our gross margin percentage to continue to improve going forward as our revenue grows and the amortization expense continues to decrease as we capitalize less development costs. Our total operating expenses increased 11% for the quarter. Sales and marketing expenses decreased 5% due to a decrease in salary payroll. G&A expenses decreased 25% mainly due to a decrease in bad debt expense. The decrease was also due to a decrease in office rent expense as we downsized our office space in Vancouver, Canada when our previous lease ended in June. Since COVID, the majority of our development staff work remotely. Therefore, we require less office space. Software development expenses increased by 74%. This was due to the decrease in the percentage of development costs capitalized versus expensed. As we capitalized 4% this quarter compared to 26% in Q3 2024. The increase in development expenses was offset by the decrease in payroll expense resulting from the reduction in development personnel in December 2024. Our net loss for the quarter was 367,000 compared to a net loss of 441,000, an improvement of 74,000. Our adjusted EBITDA was 378,000 compared to 367,000, an increase of 11,000. While the accounting for development costs has no impact on cash flow, it continues to negatively impact our reported earnings. As previously mentioned, a smaller proportion of development costs was capitalized compared to prior quarters, resulting in a greater amount being expensed immediately. As development costs are amortized over a three-year period, amortization expense remains elevated due to higher levels temporarily reducing our net income. But despite the negative impact of the accounting for development costs, our profitability improved versus Q3 2024. We expect gross margin, EBITDA, and overall profitability to continue to improve in future quarters as our revenue grows and the impact of higher amortization expenses related to prior periods diminishes. Please refer to the reconciliation included in our press release for the calculation of adjusted EBITDA. Turning now to our balance sheet and cash flow statement, our cash totaled 281,000 at quarter end, which was a 304,000 decrease from our 2024 year-end cash balance of 585,000. Our deferred revenue totaled 2.2 million at quarter end, The future costs associated with realizing that revenue is minimal, as most of our deferred revenue relates to setup and development work already completed. Those setup and development fees have been deferred and will be recognized in future periods over the service contract to which they relate. Our year-to-date net cash flow from operations was 832,000, while net cash used in investing activities was 1.1 million, primarily due to spending on infrastructure and product development. Going forward, we expect our double-digit revenue growth to continue for the remainder of this year and into 2026. Also, as mentioned earlier, we expect our bottom line to improve as our revenue grows. and the amortization expense associated with capitalized development cost decreases. Thank you, and I'll now pass it back to Dave.