VerticalScope Holdings Inc.

Hello, everyone, and thank you for joining the Vertical Scope Holdings Inc. Q1 2026 earnings call. My name is Claire, and I'll be coordinating your call today. During the presentation, you can register a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by two on your telephone keypad. I'd now like to hand over to Diane Yu, Chief Legal Officer at Vertical Scope Inc. to begin. Please go ahead.

Thank you, Operator. Good morning, everyone, and welcome to Vertical Scope Holdings' first quarter 2026 earnings call. I'm joined by Chris Goodridge, our Chief Executive Officer, and Vince Bellissimo, our Chief Financial Officer. We'll begin with commentary on the quarter before opening the floor to questions. Before we begin, I'd like to remind everyone that today's presentation contains forward-looking information that involves known and unknown risks and uncertainties and other factors that could cause actual events to differ materially from current expectations. These statements should not be read as assurances of future performance or results. Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements to be materially different from those implied by such statements. A more complete discussion of the risks and uncertainties facing the company appears in the company's management discussion and analysis for the three-month period ended March 31, 2026, which is available under the company's profile on ZR Plus as well as on the company's website. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. The company disclaims any intention or obligation, except to the extent required by law, to update and revise any forward-looking statements as a result of new information, future events, or for any other reason. Our discussion today will include references to adjusted financial measures, including adjusted EBITDA, free cash flow, free cash flow conversion, and MAU, which are non-IFRS measures. All references to currency in this presentation shall refer to USD and must otherwise specify. Now, I will turn the call over to Chris Goodrich, CEO of Vertical Scope. Chris?

Thanks, Diane, and good morning, everyone. Thanks for joining us today. Q1 was a quarter of focused execution, and as I look at where our business stands today, I'm increasingly confident that we're setting up for a strong year as the quarters progress. The pace of change around us continues to accelerate, but as I've said before, the hallmark of Vertical Scope has always been our ability to adapt, evolve, and seize the opportunities that arise from change. The strength of our core operating model continues to build our balance sheet and increasingly is creating optionality. Our strategy continues to be anchored in four key areas. First is growing direct connections, both with our users and advertisers. Second is diversifying our revenue sources. Third, AI-driven product growth. And fourth, leveraging our strong liquidity position and cash generation to make disciplined investments to accelerate growth. Let me begin with our audience. Despite the significant shifts in the search landscape over the past year, the quality of our MAU base has really proven itself. MAUs averaged approximately 85 million in Q1, which was stable compared to Q4. However, we saw MAUs climb to 90 million in March as we continue to diversify our traffic sources. Increases in contributions from direct traffic and audience engine are driving these improvements. We're also encouraged by changes Google announced in early May to its AI overviews and AI mode products. These updates are specifically designed to surface more links to authentic voices and firsthand perspectives from online discussions. including showing the community name and linking directly into forum conversations. This represents a meaningful shift from where Google has been trending, which was towards more self-contained AI summaries that gave users less reasons to click through to the source. We've seen in the past that when Google makes product changes that point users towards forums and authentic user-generated content, that our communities benefit. It's still early, but we see this as a potentially significant tailwind for our traffic as these changes roll out more broadly. Vince will walk you through the details, but I want to offer my perspective on our revenue performance. The top-line result reflects what we've discussed previously. Q1 was our toughest year-over-year comparable, and the impact was again concentrated in programmatic, where we faced both lower traffic volumes, lapping last year's search-driven levels, and another quarter of relatively soft CPMs. The good news is that we're seeing signs that both of these headwinds are easing. Traffic trends have improved, and CPMs have started to firm up in Q2, which gives us confidence heading into the rest of the year. E-commerce delivered its fourth consecutive quarter of growth, up 25%, and is increasingly powered by AI-driven initiatives that I'll talk about in a moment. But we're also really pleased with the momentum building in our direct advertising business. Direct advertising grew 7% year-over-year in Q1 and now represents over 40% of our digital advertising mix from 30% a year ago. That shift is significant, and it reflects a broader trend. As the open web gets noisier and more saturated with AI-generated content, brands are placing a premium on reaching real people in brand-safe, contextually relevant environments. And that's exactly what our communities deliver. We're seeing particular strength in automotive, where OEMs and aftermarket brands are investing in immersive content campaigns to reach our highly engaged and enthusiastic audiences. Outdoors and power sports are also strong, and we've won meaningful new mandates in insurance and telecom in both the USA and Canada. Our pipeline for the second half is building ahead of prior year, and we're confident this channel will be a meaningful growth driver as the year progresses. And even through a period of significant change in user patterns, we continue to demonstrate our ability to generate free cash flow. Adjusted EBITDA margins came in at 20%, which is consistent with our normal seasonal pattern where Q1 is the low point, and we converted 86% of adjusted EBITDA to free cash flow. As we move back to a return to growth and begin realizing the expected gains from our investments in AI, we believe we'll be set up for even greater operating leverage than we've demonstrated in the past. Turn to our product and AI initiatives. We're pushing hard to become an AI-native company where agentic tools are amplifying the output of every team. To this end, we made an important strategic move this quarter with our partnership with AltML to embed four deployed AI engineers directly into our operations. AltML is a proven Canadian AI leader and will be a catalyst to accelerate our pace of change. This is about building production-grade agentic workflows in all areas of our business. The opportunity here is twofold. These workflows are designed to unlock new sources of revenue while simultaneously driving the kind of operating leverage and efficiencies that we expect will show up in our results as we move through the year. We've already identified savings that we're reinvesting directly into this work with AltML, and we expect to report on tangible outcomes over the coming quarters. Meanwhile, our core AI initiatives continue to gain traction. Fora Frank has become a staple of our community experience, adding value to human discussions and driving significant engagement improvements to threads. And our latest product release included a new commerce-focused initiative powered by AI to significantly improve in-thread commerce experiences. Within weeks of launching, this new feature is already delivering over half a million dollars of annualized revenue, and we have several paths to continue to scale it up. And last but not least is audience engine, which we introduced at our last call. It continues to scale in line with our expectations, providing us with new users and sources of profitable revenue. We're learning and experimenting as we build up this new capability and as we focus on finding quality audiences and optimizing their performance. Turning to data licensing. As I've spoken on past calls about the opportunity we see in this space and the patient approach we've been taking, The demand signal continues to be clear and persistent. Over the past three months alone, our Tolbin integration has blocked 275 million unauthorized scrape attempts across our communities from AI crawlers from the major LLMs. That demand is shifting the conversation. We're actively engaged in discussions that are more advanced and substantive than anything we've had before. At the same time, we'll continue to take the necessary legal steps to protect our content and intellectual property against unauthorized use. We see both apps, commercial and legal, as complementary, and we're prepared to move forward on both. We also recently relaunched the Forward Data API, which provides enhanced structured access to our community data for licensed partners. You can find information about our new API on our corporate website. Finally, a quick comment on capital allocation. The strength of our core operating model continues to generate healthy food cash flow and a consistently improving balance sheet. We entered the second quarter with over $75 million in total liquidity and very low leverage. We're well-positioned to deploy capital where it creates the most long-term value for our shareholders, and right now our focus is squarely on investments in AI that accelerate growth and operating leverage. On M&A, we continue to see high levels of inbound opportunities, but we'll continue to be disciplined and selective, acting where the right opportunity presents itself. So let me bring it all together before handing it over to Vince. The quality of our MAU base is clear, and we have several paths to grow. Direct advertising is growing, and our pipeline is strong. The AI investments that we're making through AltML and across our product suite are expected to contribute as real growth drivers and real operating leverage. And our balance sheet gives us the optionality to be opportunistic, positioning us well for some strong quarters ahead. And with that, I'm going to turn it over to Vince to walk through the numbers in more detail. Vince?