Snipp Interactive Inc.

Good morning and welcome to the SNP Interactive second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode. Following the company's prepared remarks, we will open the call for questions. Please note that today's call is being recorded. Before we begin, I would like to remind everyone that today's call contains forward-looking statements within the meaning of applicable security laws. These statements are based on management's correct expectations and involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please refer to the company's public filings on CDAR and its investor relations website. The company does not undertake any obligation to update forward-looking statements except as required by law. Today's call also refers to certain non-IFRS measures including EBITDA, gross margin, free cash flow, and bookings backlog. Reconciliations are provided in the press release and MD&A. Thank you, everyone, and good morning. On the call with me is Malcolm Davidson, our interim chief financial officer. I am going to set the frame and talk about the two things that matter most this quarter. Malcolm will then take you through the numbers in detail. I will come back for the outlook and then we will both take your questions. Let me start where I finished in June. I told you the bookings backlog was the most important number in our Q1 release and that the 20.6 million we had built was contracted, signed and on its way into the revenue line over the coming quarters. This is the quarter it started arriving. Revenue in Q2 was 6 million, up 19% sequentially and 25% year over year. That is our strongest quarter in five. And I want to be straight with you about the shape of it. The fourth quarter of last year was 5 million. The first quarter of this year was 5 million and now we are at 6 million. Two quarters at a floor and then a 19% step up. EBITDA was positive $181,000 against a loss of 1.2 million in the same quarter last year. Net loss narrowed by 89%. Malcolm will take you through how we got here. The number I told you to watch directly because I made it the headline three months ago and I'm not going to walk past it today. Backlog at June 30th was 19.1 million down from 20.6 million at March 31st. It came down because we recognized it. Last quarter backlog went up while revenue went down and I told you that was the fingerprint of the strategy working. This quarter, backlog came down while revenue went up. That is the same fingerprint running the other way. The reservoir filled and now it's draining into the revenue line exactly as designed.

Three things to hold alongside that.

The first 19.1 million is still 26% above the 15.2 million we carried a year ago, and still more than three times the revenue we recognized in the quarter. Second, this number continues to reflect signed customer contracts only, not verbal commitments, not letters of intent, not pipeline. We made that disclosure choice deliberately, and I am not going to loosen the definition in a quarter when the number moves slightly against us. Third, deferred revenue went the other way, up again. to 7.7 million from 6.9 million at the end of Q1. That is cash clients have already paid us for work we have not yet delivered. If backlog revenue and deferred revenue were all falling together, that would be deterioration. That is not what is happening here. In June, I also told you we were applying AI aggressively across sales, engineering, prototyping, and operations. I also said something specific about how we would report on it, that we would tell you what it was delivering, when we could point to it in the P&L, not before. This is the first quarter I can start to point to it. The productivity gains we have built in engineering and delivery are what made it possible to consolidate our technical delivery footprint. We are shipping more with a smaller team because the team is materially more productive than it was a year ago. Part of that is already in the Q2 cost base, salaries and compensation down 18% year over year in a quarter where revenue grew almost 25%. A further set of actions completed at the end of the second quarter and in July, so more of it expected to begin to flow through from the third quarter onward. On sales, AI continues to accelerate the speed and quality of our RFP responses and our live receipt validation demos, particularly around fraud mitigation. These are landing the clients the way they did last quarter. On prototyping, the compression from idea to working prototype continues. Work that used to take weeks takes days. on operations, how we deliver campaigns, process receipts at scale, and manage program lifecycle. That is where I expect this to show up next. I'm going to hold to what I said in June. I am not putting a dollar figure on AI-driven savings on this call. What I will say is that the direction I described three months ago has begun to appear in the numbers, and that by the end of 2026, I expect Snyk to be a different company measured from the perspective of cost structure, subject to the risks and uncertainties described in our public filings. So with those initial comments, let me hand it over to Malcolm.