Quotemedia Inc

Good day everyone and welcome to today's Quote Media Q1 results conference call. At this time, all participants are in a listen only mode. Later, we'll conduct a question and answer session. You may register to ask a question at any time by pressing star one. Please note this call is being recorded and I'll be standing by for assistance. Now I'll turn the call over to your host, Dave Warren. Please go ahead, Dave.

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 2026 first quarter results. We're very pleased with how 2026 is beginning for Colt Media. The momentum we built through 2025 has continued into the first quarter and we believe the business is now entering a new phase focused not simply on growth but scalable growth. Revenue increased 15% year over year this quarter driven by continued expansion within existing accounts. New Client Win and increasing traction among larger enterprise customers. We're seeing strong demand across our platforms and data offerings, and we continue to successfully compete against much larger incumbents in the industry. Importantly, the quality and predictability of our revenue continues to strengthen. Approximately 95% of our revenue is recurring in nature. providing substantial visibility and stability as we continue to grow the business. In addition, we continue to maintain client retention levels that are very close to 100%, which we believe reflects the value clients place on our products, data and services. Based on contracted and active business currently in place, our annualized revenue run rate is now above 22 million. We believe this reflects the growing size of the business, the strength of our recurring revenue model, and the increasing momentum we're seeing across the company. We're also seeing increasing operating leverage within the business. One of the areas that we're particularly excited about internally is the impact artificial intelligence is already having across our operations. We're leveraging AI extensively across data cleansing, monitoring, quality assurance, quality control, and software development workflows. These technologies are allowing us to significantly improve productivity and development velocity while scaling the business without needing to materially increase headcount alongside revenue growth. We believe this operational efficiency will become increasingly important as we continue to grow. From a profitability standpoint, adjusted EBITDA and earnings this quarter continue to be impacted by accounting treatment related to development costs, capitalization, and elevated amortization associated with prior development investments. Importantly, these accounting dynamics do not negatively impact cash flow, and we continue to expect improving profitability trends as revenue scales and amortization related to prior period investments declines over time. Bit of a mouthful there. Our balance sheet also continues to strengthen. Deferred revenue remains strong at approximately 1.8 million, reflecting contracted business that will be recognized in the future periods and providing additional visibility into future revenue streams. Looking ahead, our sales pipeline remains strong, enterprise activity continues to increase, and we believe that we're well positioned for continued double-digit growth throughout 2026. As our cash flow and overall financial position continues to strengthen, we also expect to evaluate additional capital allocation opportunities, including the potential for share repurchases. In addition, as Quote Media continues to grow and mature, We expect to increase our focus on investor relations and broader market awareness initiatives over time. Overall, we believe Quote Media is becoming increasingly scalable, predictable, and efficient. Our products continue to resonate strongly in the marketplace. Our recurring revenue base continues to expand, and we believe that we're still in the early stages of a significant long-term growth opportunity. With that, I'll now pass things over to Keith Randall to walk us through the financial details for the quarter, and then after that, we'll be happy to answer your questions. Go ahead, Keith.

Thank you, Dave, and welcome, everyone. I'll begin with the income statement. As otherwise noted, all comparisons are on a year-over-year basis. Our total revenue increased 15%, driven by a 17% increase in corporate quote stream revenue and a 16% increase in interactive content revenue. Our revenue growth reflects continued success in both customer acquisition and expansion within existing accounts, especially among larger enterprise clients. Individual classroom revenue was relatively unchanged from 2025. Cost of revenue. which includes stock exchange fees, data costs, and amortization of capital life development increased 11%. The increase was driven primarily by higher variable exchange fees associated with revenue growth, as well as increases in fixed stock exchange fees. During the quarter, we incurred approximately 230,000 in one-time expenses related to data fees, which also contributed to the increase in cost of revenue. Gross margin improved to 46% compared to 44% in the prior year. Total operating expenses increased 23% during the quarter, primarily reflecting lower capitalization of development costs and therefore higher near-term expense recognition. Sales and marketing expenses increased 5%, mainly due to additional sales personnel added since the comparative quarter. G&A expenses increased 17%, primarily due to higher professional fees, partially offset by lower office rent expense. Following the expiration of our Vancouver office lease in July 2025, we downsized office space as the majority of our development team now works remotely. Software development expenses increased 42%, reflecting lower capitalization levels this quarter, with 9% of development costs capitalized compared to 27% in the comparative period. As a result, more development costs were expensed immediately during the quarter, while amortization expense remains elevated due to prior period investments. Importantly, while these Accounting Dynamics impacted earnings and adjusted EBITDA. They did not impact cash flow. Our net loss for the quarter was 621,000 compared to 500,000 in 2025. Adjusted EBITDA was 43,000 compared to 368,000 in the prior quarter. Profitability during the quarter continues to be impacted by elevated amortization expense related to prior period investments. as well as the previously noted $230,000 in one-time data content expenses. If you remove the impact of development cost accounting and this non-recurring expense, you would have had a probable quarter. Please refer to the reconciliation included in our press release for details on adjusted EBITDA. Turning to the balance sheet and cash flow statements, we ended the quarter with $522,000 at the end of 2025. Deferred revenue totaled $1.8 million at quarter end. The future costs associated with this deferred revenue are expected to be minimal as the majority relates to setup and development work already completed and will be recognized over the remaining contract terms. Net cash provided by operating activities was $385,000 while investing activities used $183,000. primarily related to infrastructure and product development. Our revenue growth for the quarter was 15%, and we expect similar revenue growth through the remainder of 2026. We also expect continued improvement in gross margin and profitability as our revenue scales and the impact of prior period amortization declines over time. Thank you, and I'll now turn it back to Dave.