TeraGo Inc.

Good morning, ladies and gentlemen. Welcome to TerraGo's second quarter 2026 financial results conference call. Currently, all participants are in a listen-only mode, and following the presentation, we will conduct a question and answer session with pre-qualified analysts on the call, and instructions will be provided at that time for you to queue up for questions. If anyone has any difficulties hearing the conference, please press star followed by zero for operator assistance at any time. I would like to remind everyone that this conference call is being recorded. Tara Go would like to remind listeners that the company's remarks and answers to your questions today may contain forward-looking statements. that are based upon management's current expectations. All such statements are made pursuant to the safe harbour provisions of and are intended to be forward-looking statements under applicable Canadian securities legislation. While relying on forward-looking statements to make decisions with respect to the company, you should carefully consider the risks set forth in the Risk Factors section in the 2025 Annual Information Form www.cedarplus.ca We would also like to remind listeners that TerraGo uses certain non-gap financial measures to arrive at adjusted results to assess its business and to measure overall performance. TerraGo believes that these financial measures provide readers with a better understanding of how management views the company's overall performance. I will now turn the conference over to TerraGo's Chief Executive Officer, Daniel Vucinic. Sir, please proceed.

Thank you and good morning everyone and welcome to our second quarter 2026 earnings call. The second quarter marked another period of meaningful progress for TerraGo. We delivered year-over-year growth in adjusted EBITDA, increased ARPA average revenue per account, and generated stronger booking activity which contributed to sequential growth in backlog monthly recurring revenue from the first quarter. These results reflect the continued execution of our strategy and provide encouraging evidence of the momentum we are building across the business. Over the past year, we have remained focused on further elevating our customer quality, increasing operating efficiency, and positioning the business for sustainable, profitable growth. We continue to target and win large mid-market and enterprise customers, particularly multi-location organizations where our managed connectivity solutions and our white glove service provide meaningful differentiation. At the same time, we have continued to optimize our customer base by moving away from lower margin and unprofitable accounts that do not align with our long-term objectives. We are encouraged by the level of customer engagement we continue to see in the market. Organizations are increasingly seeking connectivity partners that can deliver reliable network performance, responsive support, and the flexibility required to support increasingly data intensive operations. We believe TerraGo's high touch service model and wireless network capabilities position us well to capitalize on these opportunities. While the impact of lower booking levels experienced during 2025 continues to flow through our revenue results, booking activity in 2026 is trending well above 2025 levels and the resulting increase in backlog MRR from the first quarter provides an encouraging indicator as we move through the balance of the year. Beyond our operating performance, the most significant development during the quarter was ICED's decision regarding the future licensing framework for the 26 GHz and 38 GHz spectrum bands. We see this as a transformative milestone for TerraGo and an important development for the Canadian millimeter wave ecosystem. For many years, there have been regulatory uncertainty with TerraGo spectrum licenses until, ICED's decision in May 2026. This decision provides long-term certainty regarding TerraGo's licensing and future use of the company's spectrum holdings. The framework for flexible use, which means licenses can be used for both fixed and mobile services, has been established, confirming the transition process for incumbent licensees, and setting the timetable for the October 2027 spectrum auction. ISED has provided a clear path forward for the future of millimeter wave spectrum in Canada. As Canada's largest holder of millimeter wave spectrum licenses, we believe this decision significantly enhances the strategic importance of our spectrum portfolio and expands the opportunities available to TerraGo under a flexible use framework. Flexible use licensing expands the range of opportunities available to spectrum holders, including 5G private wireless networks, enterprise mobility applications, advanced fixed wireless access, 5G public hotspot capacity expansion, and other next-gen connectivity solutions. We believe TerraGo is uniquely positioned to capitalize on these opportunities and participate in the next phase of wireless innovation in Canada. Across the broader telecommunications sector, we continue to see increasing investment in AI infrastructure, private wireless networks, digital twin environments and advanced 5G applications. In fact, bot and AI agentic traffic has surpassed human traffic and is expected to continue to grow by many factors over the next few years. These trends are driving growing demand for high capacity, low latency connectivity, reinforcing the long-term strategic importance of millimeter wave spectrum and TerraGo's network assets. As we move through the balance of 2026, our priorities remain clear. Continue improving sales bookings, grow the quality of our revenue base, expand profitability and position TerraGo to capitalize on opportunities emerging within the Canadian millimeter wave ecosystem. With that said, I'll turn it over to our CFO, Raj Sapra. Raj.

Thanks, Dan. Morning, everyone. Let's move to slide four of our Q2 2026 financial results presentation, which was uploaded on our website for an overview of our KPIs. Our average revenue per customer or ARPA in our connectivity business increased by 4.2% to $1,279 in Q2 of 2026 compared to $1,228 for the same period last year. The continued improvement in ARPA reflects our ongoing focus on attracting mid-market and larger enterprise customers particularly multi-location organizations while also increasing wallet share with existing customers through our high touch service model. Our churn rate for the quarter was 1% compared to 0.9% for the same period last year. We continue to review and enhance our customer experience programs, retention initiatives, and service delivery processes with the objective of reducing churn over time. Backlog MRR at June 30th, 2026 was $78,788 compared to $93,279 a year ago. The year-over-year decrease reflects higher installation volumes offset by lower booking levels, which were experienced in fiscal 2025. Importantly, the backlog MRR increased sequentially from March 31, 2026 reflecting stronger booking activity here today. Turning to slide five to review our broader Q2 2026 financial highlights. Total revenue for Q2 2026 was 6.21 million as compared to 6.34 million for the same period last year. The decrease in revenue reflects lower bookings in 2025 as mentioned previously. Delays in some installation associated with larger multi-site deployments and the company's continued focus on optimizing its customer base, including the discontinuation of unprofitable accounts. These impacts were partially offset by revenue contributions from new customers added during the year. Adjusted EBITDA for Q2 2026 increased 16.8% to 1.8%. and Anirudh Sharma. In the last two years, Q2 2020, Q2 2021, Q2 2021, Q2 2021, Q2 2021, Q2 2021, Q2 2021, Q2 2021, The year-over-year improvement reflects continued progress in managing costs and improving overall operating performance. Moving now to slide six, with respect to the balance sheet, the company ended the second quarter of 2026 with $6.6 million in cash and cash equivalents. As we move through the remainder of 2026, our priorities remain centered on driving profitable growth, improving customer quality, increasing operational efficiency and executing on the opportunities ahead of us. With that said, I would like to turn the call back over to Dan. Dan?

Thanks, Raj. Before we open the line for questions, I'd like to leave investors with one final thought. While we are encouraged by the operational progress we're making through sales bookings, continued ARPA growth, strong profitability, and the most significant development this quarter was ICED's decision around the future of 26 GHz and 38 GHz bands. For many years, investors have recognized the unique nature of TerraGlow Spectrum holdings, but the regulatory framework governing their future remained uncertain. We now have certainty and a defined framework for flexible use licensing and a clear timetable for the 2027 spectrum auction. Again, as Canada's largest holder of millimeter wave spectrum, we believe this decision substantially enhances the strategic value of our spectrum portfolio and expands the range of opportunities available to the company. We believe millimeter wave spectrum will play an increasing important role as network capacity requirements continue to grow, driven by AI-enabled applications, We believe TerraGo is uniquely positioned to participate in the next phase of development of Canadian millimeter wave ecosystem and create long term value for shareholders. That wraps up the prepared remarks for us today and we can now open up the call for questions. Operator, back to you.

Thank you, sir. Ladies and gentlemen, at this time we'll be conducting our question and answer session. If you wish to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you wish to remove your question from the queue. And for participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Okay, as we have no questions on the lines at this time, I would like to turn the call back over to Mr. Vucinic for any closing remarks.

Thanks again, everyone, for joining us on our call today. I'd like to thank our customers, shareholders who continue to support the company, and a huge thank you to the employees at TerraGo that are doing an outstanding job. We look forward to providing an update on our progress on our next quarterly earnings call. Operator?

Thank you, sir. Ladies and gentlemen, thank you for joining us today for TerraGo's second quarter 2026 earnings call. You may now disconnect.