VerticalScope Holdings Inc.

Welcome everyone and thank you for joining the VerticalScope Holdings Inc. Q2 2026 earnings call. My name is Gabrielle and I will 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. I will now hand over to your host, Diane Yu, Chief Legal Officer at VerticalScope Inc. Please go ahead.

Thank you, operator. Good morning, everyone, and welcome to Vertical Scope Holdings Second Quarter 2026 Earnings Call. I'm joined by Chris Goodridge, our Chief Executive Officer, and Vince Bellissimo, our Chief Financial Officer. We'll begin the 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- and six-month period ended June 30, 2026, which is available under the company's profile on CDAR 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. This 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 unless otherwise specified. Now, I will turn the call over to Chris Goodridge, CEO of VerticalScope. Chris?

Thanks, Diane, and good morning, everyone, and thanks for joining us today. Q2 is the quarter where the work of the past year started to show up in the numbers. revenue trends are improving, adjusted EBITDA is growing, and margins are expanding. And we're producing these results while stepping up investment in the AI initiatives that will be foundational to the future of our growth. Our strategy is unchanged and still anchored in four areas, growing direct connections with our users and our advertisers, diversifying our revenue sources, AI-driven product growth, and using our liquidity and cash generation to make disciplined investments that accelerate growth. Let me start with audience. Meir Welcher, Robert Laidlaw, Vincenzo Bellissimo, Ezra Menaged, Diane Yu, Christopher Goodridge We've been encouraged by recent product changes Google has made to attempt to surface more links to authentic, first-hand discussions like those found in our communities, but these aren't yet contributing to growth. On the acquired audience side, this audience is profitable and right now is the main driver of NAU growth, but so far it monetizes at a lower rate than organic search, which is the explanation for lower year-over-year ARPU. We're in the early stages of building a new marketing capability for the business, to open up new user channels and new revenue sources as the landscape for content discovery on the Internet continues to change. Turning to revenue, we came in at $13.8 million, up 20% sequentially and down 5% year-over-year. Programmatic revenue has been the pressure point for several quarters, and in Q2, the year-over-year decline narrowed to 8% from down 34% in Q1. Getting that gap into single digits is the single most important trend line in the quarter, and reflects both improving CPM and impression trends and the rampant audience engine. Direct advertising was flat in the quarter and is up 3% in the first half. Q2 results were influenced by timing of campaigns launching and as of the end of July, direct bookings for the year were pacing 7% ahead of prior year. In July, we also onboarded two new insurance customers as that category continues to show year-over-year improvements. Turning to commerce, although commerce revenue was down 5% overall due to lower marketplace revenue from Ritual, affiliate commerce revenue on Forward grew 13% year-over-year driven by our AI initiatives, which is now approaching a million-dollar annual run rate, two times higher than when we last reported. And our product roadmap has several paths to continue to scale this source up. Adjusted EBITDA was $4.5 million, up 4% year-over-year, and margin expanded 270 basis points to 32%. As I mentioned at the top, we're benefiting from improved revenue trends and our strong cost discipline while we fund our AI initiatives. I'll turn to those initiatives now. We said at the start of the year that our goal is to become an AI-native company. And while we're still very early in this transformation, this mindset is driving change across our teams as we redefine how our businesses run. Our work with AltML is a key accelerant to this change. are helping us unlock new automated workflows across community, content, and sales operations. But this work has also catalyzed a new wave of AI-focused activity across our broader business. AI is making our community stronger by improving content moderation and member engagement, increasing the speed with which we can route questions from users to the best-positioned members to respond, resulting in more engaging threads and faster answers, and by powering new multi-community experiences to unlock broader network effects across our communities and provide more opportunity for member engagement. AI is also driving revenue improvements, including programmatic and commerce. It's helping make our advertising operations more efficient and effective by improving quality and speed of proposals and streamlining campaign management, leading to better outcomes for our ad partners. And it's making our business more efficient across every department. Taken together, these efforts are making us faster, leaner, and more valuable to our members and our partners, and we're just getting started. Turning to AI licensing, as I mentioned previously, we're taking a patient approach to developing this line of business, but that also we're prepared to take necessary legal steps to protect our content and intellectual property against unauthorized use. These are complementary paths. Where we can reach fair commercial terms, we will. Where we cannot, we will protect our intellectual property. We're making real progress down both paths. First, we're in advanced discussions with a major technology company on a new deal that will compensate us for contribution to AI-generated responses. That deal isn't done yet, but we're getting close, and we'll provide more information once it's signed. Down the litigation path, in May, we filed a statement of claim in Ontario Superior Court against OpenAI. And as that's now a matter before the courts, I'm not in a position to offer more information. As that case develops, we'll provide periodic updates. Beyond these, we continue to have productive discussions with other potential partners, and other avenues like Tolbit and the Fora API are sourcing smaller incremental opportunities. Overall, the market is taking shape. A quick word on capital allocation. We repaid $12 million on our revolving credit facility in the quarter, bringing gross debt to $32 million, and we ended the quarter with $75.3 million in total liquidity. In early July, we made a $6.1 million secure debt investment in AltML to fund our continued growth. The investment is interest-bearing and matures in 18 months, with an option for AltML to extend that to 30 months. We also have the option for equity participation in AltML's next funding round, providing us with exposure to a growing AI business. But overall, our capital priorities have not changed. Fund our highest conviction AI investments, keep reducing debt, and maintain optionality to act on opportunities that meaningfully accelerate our strategy. With that, I'll pass it over to Vince to walk through the numbers in more detail. Vince?