Vecima Reports Strong Third Quarter Results Generating Expanding Gross and Adjusted EBITDA Margins

Q3 Revenue $64.8M; Gross Margin 47.3%; Adjusted EBITDA Margin 17.4%; Calendar 2026 Revenue Growth Outlook Increased to 22.5%-30.0% (previously 20%-30%)

VICTORIA, British Columbia--(BUSINESS WIRE)--Vecima Networks Inc. (TSX: VCM) today reported financial results for the three and nine months ended March 31, 2026.

FINANCIAL HIGHLIGHTS

(Canadian dollars in millions except percentages, employees, and per share data)	Q3 FY26	Q2 FY26	Q3 FY25
Revenue	$64.8	$73.7	$64.0
Gross Margin	47.3%	44.9%	47.7%
Net Income (Loss)	$(0.2)	$0.1	$1.2
Earnings (Loss) Per Share^1	$(0.01)	$0.00	$0.05
Adjusted Gross Margin^2,3	50.7%	46.4%	47.4%
Adjusted Earnings (Loss) Per Share^1,2,4,5	$0.06	$0.04	$0.05
Adjusted EBITDA^2	$11.3	$10.6	$10.3
Employees	612	611	582
^1) Based on weighted average number of shares outstanding.
^2) Adjusted Gross Margin, Adjusted Earnings Per Share and Adjusted EBITDA do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures provided by other issuers. Starting in Q4 fiscal 2025, we have changed our definition and calculation of Adjusted EBITDA and Adjusted Earnings Per Share. For a reconciliation of Adjusted Earnings Per Share, investors should refer to Vecima’s Management’s Discussion and Analysis for the three and nine months ended March 31, 2026.
^3) Adjusted gross margin adds back the impact of a non-cash write-down of inventories to net realizable value and warrant expense (recovery) of $1.8 million and $0.4 million, respectively, for the three months ended March 31, 2026, and $0.8 million and $(1.0) million, respectively, for the three months ended March 31, 2025.
^4) Adjusted earnings per share includes non-cash share-based compensation of $0.4 million or $0.01 per share for the three months ended March 31, 2026, and $0.5 million or $0.02 per share for the three months ended March 31, 2025. The non-cash share-based compensation primarily reflects certain performance-based vesting thresholds achieved under the Company’s Performance Share Unit Plan.
^5) Adjusted earnings per share and Adjusted EBITDA include foreign exchange loss of $0.2 million or $0.01 per share for the three months ended March 31, 2026, and $0.3 million or $0.01 per share for the three months ended March 31, 2025.

"The third quarter fully aligned with our expectations as we prepared for a significant resurgence of growth in fiscal Q4 and beyond," said Sumit Kumar, Vecima's President and Chief Executive Officer. "The customer forecast-driven visibility into robust upcoming demand across the next several periods has continued to be reinforced and began to materialize late in the third quarter, tied to scale network deployment programs. With increased demand coalescing, we are now increasing our revenue growth outlook for calendar 2026. We now anticipate 22.5% to 30.0% revenue growth in calendar 2026 as compared to calendar 2025, above our previous projection of 20% to 30% growth. Based on Management's projections, we continue to expect adjusted EBITDA margins to break through 20% for this same period, driving adjusted EBITDA growth of 74% to 85% compared to calendar 2025. Our confidence in our increased forecast further strengthened in the third quarter as our customers are providing purchase orders and forecasts with clear visibility into increased volumes in the near term. At the same time, we believe new design wins, deepening customer engagements, and achieving important product milestones underscore the long-term nature of our anticipated growth trajectory."

"Financially, we generated third quarter sales of $64.8 million, representing a year-over-year increase of 1.3% in a quarter in which we anticipated temporary and modest delivery constraints related to the short-term effects of industry consolidation activity, as well as the normal initiation phase in the lead up to major network evolution programs. Third quarter results reflected strengthening performance in our Video and Broadband Solution segment, partially offset by a lower revenue quarter for our Content Delivery and Storage segment year-over-year, related to the timing of orders and projects. Our Video and Broadband Solutions results included robust demand for our high-value, fiber-to-the home access solutions, which have grown to become a key component of Vecima's product mix and represented close to half of our Q3 Entra sales."

"Consolidated third quarter results included an impressive gross margin percentage of 47.3% (adjusted gross margin of 50.7%), representing our third consecutive quarter of margin improvement. Notably, Adjusted EBITDA climbed 9.2% year-over-year and 6.4% quarter-over-quarter to $11.3 million, reflecting operational efficiencies throughout the organization and resulting in a strong Adjusted EBITDA margin of 17.4%, as compared to 16.1% in the same period last year."

"Highlights of the quarter included the announcement of a major, multi-year DOCSIS 4.0 agreement with Charter Communications' Spectrum, one of North America's largest broadband service providers. The agreement further deepens our relationship with Charter and focuses on deployment of our new ENTRA ERM422, the world's first DOCSIS 4.0 Dual Downstream Service group RPD. The announcement also reaffirms the partnership related to Charter's continued nationwide fiber-to-the-home deployment of our global market-leading Entra SF-4X Remote OLT."

"In other parts of the Entra portfolio, we significantly advanced our vCMTS cloud solution, securing design wins and initial orders from four European customers, signing a paid proof-of-concept agreement with an international Tier 1 operator, and making important progress on vCMTS trial activity with our Lead Tier 1 North American customer. In our Commercial Video portfolio, we also progressed lab trials for TerraceIQ as our lead Tier 1 customer prepares for a major network-wide upgrade using the next-generation solution."

“Against the backdrop of accelerating, wide-scale DAA adoption, Vecima’s decisive execution positions the company for substantial value creation. Our momentum is expected to begin ramping in Q4 fiscal 2026, helping to set the stage for new quarterly revenue records. We expect Entra fiber and cable-access products, including Entra RemotePHY, EN9000, and Entra Optical solutions, will lead our near-term performance gains. We also see a clear long-term growth trajectory as our high-value new DOCSIS 4.0 and vCMTS offerings, and in the CDS segment, IPTV and DAI solutions, become more significant contributors. Our strategy to build the industry's broadest and deepest portfolio of innovative, interoperable next-generation fiber and cable access products and IPTV solutions, paired with our expanding focus on software-centric products and platforms that will prepare customers for the 50G future, has positioned Vecima for upcoming sustained growth, with financial performance scaling to new heights," concluded Mr. Kumar.

Financial and Corporate

• Generated third quarter consolidated sales of $64.8 million, up 1.3% from $64.0 million in Q3 fiscal 2025, and 12.1% lower than $73.7 million in Q2 fiscal 2026.
• Third quarter gross margin of 47.3% (adjusted gross margin of 50.7%), compared to 47.7% (adjusted gross margin of 47.4%) in Q3 fiscal 2025 and 44.9% (adjusted gross margin of 46.4%) in Q2 fiscal 2026.
• Generated strong adjusted EBITDA (non-IFRS) of $11.3 million, an increase of 9.2% from $10.3 million in Q3 fiscal 2025, and up 6.4% from $10.6 million in Q2 fiscal 2026.
• Net loss of $0.2 million or $0.01 per share (adjusted net income of $1.6 million or $0.06 per share) compared to net income of $1.2 million or $0.05 per share (adjusted net income of $1.2 million or $0.05 per share) in Q3 fiscal 2025, and net income of $0.1 million or $0.00 per share (adjusted net income of $0.9 million or $0.04 per share) in Q2 fiscal 2026.
• Ended the third quarter in a strong financial position with working capital of $51.8 million at March 31, 2026, compared to $51.2 million at June 30, 2025. Continued focus on debt reduction has lowered total net debt (non-IFRS) to $54.4 million in Q3 fiscal 2026, from a high of $92.0 million in Q3 fiscal 2024.

Video and Broadband Solutions (VBS)

• Third quarter Video and Broadband Solutions segment sales increased 9.6% to $52.2 million, from $47.7 million in Q3 fiscal 2025, and decreased 12.3% from $59.6 million in Q2 fiscal 2026.
• VBS gross margin strengthened to 42.1% (adjusted gross margin of 46.2%), from a gross margin of 40.3% (adjusted gross margin of 39.8%) in Q3 fiscal 2025 and 39.9% (adjusted gross margin of 41.6%) in Q2 fiscal 2026, reflecting continued margin improvement based on Vecima's product mix.

DAA (Entra Family)

• Third quarter deployments of Entra DAA products generated revenue of $49.3 million, up 13.5% from $43.5 million in Q3 fiscal 2025, and a decrease of 12.4% from $56.3 million in Q2 fiscal 2026.
  • Total customer engagements stood at 147 MSOs (Multiple Systems Operators) worldwide at quarter-end, compared to 127 a year earlier, with customer engagements continuing to deepen. Seventy-three of these customers have ordered Entra products as broader DAA deployment progresses.
  • Announced a major, multi-year DOCSIS 4.0 agreement with Charter Communication's Spectrum, one of North America's largest broadband operators. The announcement highlights the extension of Vecima's collaborative partnership with Charter and includes:
    • Deployment of the Entra ERM422, the world's first DOCSIS 4.0 Dual Downstream Service Group RPD, which seamlessly integrates into Vecima Access Nodes, including the EN9000 GAP node and the EN8000 series nodes, and can be combined with Entra EEM210, a two-port fiber-on-demand module to provide fiber-to-the-home services from the same node platforms.
    • Continued nationwide fiber-to-the-home deployment using Vecima's Entra SF-4X Remote OLT, which provides a migration path to 50G-PON by simultaneously supporting 10G-EPON and 50G-PON.
  • Achieved highest quarterly revenue in over three years for Entra Optical products, led by Vecima's industry-leading SF-4X remote optical line terminals for fiber-to-the-home (FTTH). This achievement highlights the growing demand for Vecima's fiber-to-the-home access solutions, including 10G EPON and XGS-PON, and Vecima's leadership in this market. Fiber-to-the-home access solutions have grown to represent a material portion of Vecima's broadband product sales, enriching our comprehensive scope in global broadband networks and providing major new growth pathways, both in the near and long term.
  • Further accentuating Vecima's leadership in the fiber-access market, Dell'Oro Group, a leading industry market researcher, ranked Vecima #1 globally for PON Remote Optical Line terminals (R-OLTs), both XGS-PON and 10G EPON, in its 2025 Broadband Access & Home Networking market share reports. This marks the fifth consecutive year that Vecima has been named the global market share leader in the Fiber R-OLT segment.
  • Industry adoption of our EN9000 GAP node expanded again in the third quarter. The industry's only GAP node, the EN9000, is widely seeding broadband networks with a future-proof platform capable of being upgraded with multiple successive generations of DOCSIS and/or fiber-to-the-home technology.
  • Launched the ERM312, a new compact 1x2 module for the EN9000 and EN3400 platforms.
  • Continued to advance vCMTS trial activity with the Lead Tier 1 North American customer while expanding roster of engagements for this next-generation cloud solution. During the quarter, secured a paid proof-of-concept agreement with an international Tier 1 customer, while continuing to expand lab trials and initial orders with three additional operators in Europe. Vecima's vCMTS solution is part of the Entra Cloud platform which enables operators to transform their networks for next-generation broadband access, including DOCSIS 4.0. Dell'Oro Group forecasts the global market for vCMTS will be worth approximately US$350 million annually by calendar 2029. Currently, Vecima is just one of three vendors worldwide offering a vCMTS solution.

Commercial Video (Terrace Family)

• Commercial Video product sales were in line with expectations and included third quarter sales of $2.9 million (Q3 fiscal 2025: $4.2 million; Q2 fiscal 2026: $3.2 million). These results reflect the continued transition to next-generation platforms, together with some of Vecima’s newer DAA-driven Commercial Video solutions now being accounted for as part of Entra family sales.
• TerraceIQ Commercial Video solution continued to gain traction with key customers in the Americas, setting the stage for substantial anticipated growth in the next twelve months.
  • Continued progress with the lead Tier 1 customer for TerraceIQ. As part of a multi-year program, this customer has selected Vecima's TerraceIQ solution to support the evolution of its commercial video footprint nationally, encompassing both the upgrade of its existing TerraceQAM platforms which are currently deployed within thousands of commercial properties, along with rollouts for new commercial video services contracts going forward.

Content Delivery and Storage (CDS)

• The Content Delivery and Storage segment generated third quarter sales of $10.7 million, a decrease of 24.1% from $14.1 million in Q3 fiscal 2025 and 13.2% from $12.3 million in Q2 fiscal 2026. Quarterly sales fluctuations are typical in the CDS segment and reflect project and order timing.
• Achieved strong third quarter CDS gross margin performance of 68.0% (Q3 fiscal 2025: 70.0%; Q2 fiscal 2026: 65.1%).
  • Successfully deployed Phase 2 of Vecima's targeted Dynamic Ad Insertion (DAI) solution with Hotwire Communications during the quarter. Vecima's DAI solution enables operators to deliver targeted and personalized advertising experiences, increasing video average revenue per user (ARPU), without necessitating customer rate increases. The Phase 2 deployment included the first production launch of Vecima's advertising asset workflow manager, replacing third-party systems with a more dynamic, feature-rich solution, driving higher product margins.
  • During the third quarter, a Tier 2 customer selected MediaScale Origin to replace a competitor's solution. MediaScale Origin serves as a unified origin system for live, video-on-demand and network DvR services, allowing operators to streamline video delivery to traditional cable set-top boxes and IP devices simultaneously.
  • Continued progress with content providers and operators, including Tier 1 customers, on dh/KeyFrame, a Vecima-marketed generative AI-powered video optimization platform that enhances video quality while simultaneously reducing the required bitrate considerably, allowing for improved streaming efficiency.

Telematics

• The Telematics segment generated third quarter sales of $1.9 million, a decrease of 15.8% from $2.2 million in Q3 fiscal 2025, but 2.7% higher than the $1.8 million achieved in Q2 fiscal 2026.
  • Added 12 new customers for the NERO asset tracking platform during the third quarter, booking an additional 137 new subscriptions and bringing total asset tags under management to approximately 125,000.
  • Achieved an exceptional gross margin percentage of 72.9% (Q3 fiscal 2025: 65.4%; Q2 fiscal 2026: 71.4%).

Trade and Tariffs

• Trade actions had a negligible impact on the 86% of Vecima's sales made to the US in Q3 fiscal 2026. The Company's manufacturing is predominantly domiciled in Canada, exempting that portion of its production from tariff actions under the Canada-United States-Mexico Agreement (CUSMA). While renegotiation of the CUSMA could result in the introduction of new tariffs affecting Vecima's products, the Company is one of the few competitors in the industry that fully "owns" its manufacturing process. This provides the advantageous flexibility to adapt quickly to changing macroeconomic conditions, including the ability to rapidly transition manufacturing to different countries as Vecima has demonstrated in the past.

CONFERENCE CALL

A conference call and live audio webcast will be held today, Thursday, May 14, 2026 at 1:00 p.m. ET to discuss the Company’s third quarter results. Vecima’s unaudited interim consolidated financial statements and management’s discussion and analysis for the three and nine months ended March 31, 2026 are available under the Company’s profile at www.sedarplus.ca, and at https://vecima.com/investor-relations/financial-reports/.

To participate in the Q3FY26 teleconference, dial 1-833-752-3965 or 1-647-849-3105. The webcast will be available in real time at https://event.choruscall.com/mediaframe/webcast.html?webcastid=euEs4EjY and will be archived on the Vecima website at https://vecima.com/investor-relations/earnings-call-archive/.

About Vecima Networks

Vecima Networks Inc. (TSX: VCM) is leading the global evolution to the multi-gigabit, content-rich networks of the future. Our talented people deliver future-ready software, services, and integrated platforms that power broadband and video streaming networks, monitor and manage transportation, and transform experiences in homes, businesses, and everywhere people connect. We help our customers evolve their networks with cloud-based solutions that deliver ground-breaking speed, superior video quality, and exciting new services to their subscribers. There is power in connectivity – it enables people, businesses, and communities to grow and thrive. Learn more at www.vecima.com.

Forward-Looking Statements

This news release contains “forward-looking information” and “forward-looking statements” within the meaning of applicable securities laws. Forward-looking information is generally identifiable by use of the words and phrases such as “believes,” “may,” “plans,” “will,” “anticipates,” “intends,” “could,” “estimates,” “expects,” “forecasts,” “projects,” “outlook,” “future,” “growth,” “trajectory,” “momentum,” “visibility,” and similar expressions, including the negative of such expressions, although not all forward-looking information contains these identifying words.

Forward-looking information in this news release includes, without limitation, statements regarding: the Company’s expectations for a significant resurgence of growth in fiscal Q4 and beyond; the customer forecast-driven visibility into demand across the next several periods; the Company’s increased revenue growth outlook for calendar 2026; the Company’s expectation of 22.5% to 30.0% revenue growth in calendar 2026 as compared to calendar 2025; the Company’s expectation that adjusted EBITDA margins will break through 20% for this same period, driving adjusted EBITDA growth of 74% to 85% compared to calendar 2025; the timing, volume and impact of customer purchase orders and forecasts; anticipated increases in customer volumes in the near term; the expected impact of new design wins, customer engagements and product milestones; the Company’s anticipated growth trajectory; the anticipated impact of accelerating and wide-scale DAA adoption; the Company’s positioning for substantial value creation; the expectation that momentum will begin ramping in Q4 fiscal 2026 and set the stage for new quarterly revenue records; the expectation that Entra fiber and cable-access products, including Entra RemotePHY, EN9000 and Entra Optical solutions, will lead near-term performance gains; the expected contribution of DOCSIS 4.0, vCMTS, IPTV and DAI solutions; the Company’s strategy to build an innovative, interoperable portfolio of next-generation fiber and cable access products and IPTV solutions; the Company’s expanding focus on software-centric products and platforms and preparation for the 50G future; expected sustained growth and financial performance scaling to new heights; the expected effect of tariffs, trade restrictions and CUSMA treatment on the Company’s manufacturing and products; and the Company’s ability to benefit from owning its manufacturing process.

Certain forward-looking information in this news release, including the Company’s expected calendar 2026 revenue growth, adjusted EBITDA margin and adjusted EBITDA growth, constitutes a “financial outlook” within the meaning of applicable securities laws. This financial outlook is provided to assist readers in understanding management’s current expectations regarding the Company’s prospective financial performance for calendar 2026 and may not be appropriate for other purposes. For purposes of this news release, “calendar 2026” refers to the twelve-month period ending December 31, 2026, and “calendar 2025” refers to the twelve-month period ended December 31, 2025. Except for non-IFRS and other financial measures expressly identified as such, the financial outlook has been prepared using accounting policies that are generally consistent with those expected to be used by the Company in preparing its historical financial statements for the applicable period.

The forward-looking information and financial outlook in this news release are based on management’s current expectations, estimates, forecasts and projections, as well as assumptions that management believes are reasonable as of the date of this news release. These assumptions include, without limitation, assumptions regarding: the timing, volume and conversion of customer purchase orders and forecasts into shipments and revenue; the absence of material cancellations, deferrals or reductions in anticipated customer orders; continued customer investment in DAA, DOCSIS 4.0, vCMTS, IPTV and DAI deployments; customer deployment schedules and purchasing patterns; the timing and success of design wins, product qualifications and customer engagements; demand for the Company’s Entra RemotePHY, EN9000, Entra Optical, DOCSIS 4.0, vCMTS, IPTV and DAI solutions; the Company’s ability to meet product development, interoperability, manufacturing, quality, supply chain and delivery milestones; expected product mix, pricing, gross margins, adjusted EBITDA margins and operating expense levels; the availability and cost of components, labour, materials and manufacturing capacity; foreign exchange rates; the Company’s ability to maintain effective supplier and customer relationships; competitive conditions in the Company’s markets; industry adoption of next-generation access and video technologies; the absence of material adverse changes in macroeconomic conditions, customer capital spending, industry consolidation, applicable laws, tariffs, trade restrictions, customs treatment, CUSMA treatment or geopolitical conditions; and the continued performance of the Company’s products and platforms in line with customer requirements.

Actual results, performance or achievements may differ materially from those expressed or implied by the forward-looking information and financial outlook in this news release. Important risks and uncertainties that could cause actual results to differ materially include, among others: customer forecasts or purchase orders may be delayed, reduced, cancelled or not converted into revenue as expected; customer network upgrade projects and capital spending may be delayed, reprioritized or reduced; new products or platforms may not achieve expected market adoption, qualification, interoperability or performance milestones; manufacturing, quality, component availability, supply chain, delivery, product mix, pricing, margin or operating expense outcomes may differ from management’s expectations; demand for DAA, DOCSIS 4.0, vCMTS, IPTV, DAI or other next-generation solutions may develop more slowly than expected; and competitive, foreign exchange, tariff, trade, geopolitical, cybersecurity, intellectual property, regulatory, litigation, customer concentration or general business risks may adversely affect the Company. A more complete discussion of the risks and uncertainties facing Vecima is disclosed under the heading “Risk Factors” in the Company’s Annual Information Form dated September 25, 2025 and in the Company’s other continuous disclosure filings with Canadian securities regulatory authorities, including the Company’s Management’s Discussion and Analysis for the three and nine months ended March 31, 2026 and 2025, available under the Company’s profile at www.sedarplus.ca.

Forward-looking information and financial outlook is not a guarantee of future performance, and readers should not place undue reliance on them. All forward-looking information and financial outlooks in this news release are qualified in their entirety by this cautionary statement as of the date of this news release. The Company disclaims any obligation to revise or update any forward-looking information or financial outlook, or to publicly announce the result of any revisions to any such information, to reflect future results, events or developments, except as required by law.

Non-IFRS measures

This news release contains references to certain Non-IFRS measures that do not have standardized meanings prescribed by IFRS Accounting Standards. Readers should not consider these measures in isolation or as a substitute for analysis of the company’s results as reported under IFRS Accounting Standards. These measures are defined differently by different companies and, therefore, might not be comparable to similar measures presented by other issuers. For information on the composition of these measures, as well as an explanation of how the company uses these measures, refer to Vecima’s MD&A for the periods ended March 31, 2026 and December 31, 2025, available on SEDAR+ at www.sedarplus.ca, and on Vecima’s website at https://vecima.com/investor-relations/financial-reports/, which is incorporated by reference into this news release.

Adjusted Net Income and Adjusted Earnings per Share:
Calculation of Adjusted Earnings per Share (in thousands of dollars)	Q3 FY26			Q2 FY26		Q3 FY25
Net income (loss)	$	(246	)	$	113	$	1,182
Write-down of inventory to net realizable value, net of tax		1,482			773		750
Loss on sale of non-core PP&E, net of tax		16			18		5
Warrant expense (recovery), net of tax		304			39		(770	)
Acquisition-related fees, net of tax		–			–		3
Adjusted net income	$	1,556		$	943	$	1,170
Net income (loss) per share	$	(0.01	)	$	0.00	$	0.05
Write-down of inventory to net realizable value, net of tax		0.06			0.03		0.03
Loss on sale of non-core PP&E, net of tax		0.00			0.00		0.00
Warrant expense (recovery), net of tax		0.01			0.01		(0.03	)
Acquisition-related fees, net of tax		0.00			0.00		0.00
Adjusted earnings per share	$	0.06		$	0.04	$	0.05

Adjusted Gross Margin:
Calculation of Adjusted Gross Margin (in thousands of dollars)	Q3 FY26			Q2 FY26			Q3 FY25
Sales	$	64,832		$	73,722		$	63,979
Cost of sales		34,181			40,629			33,443
Gross profit		30,651			33,093			30,536
Warrant expense (recovery)		385			49			(974	)
Write-down of inventory to net realizable value		1,822			1,052			796
Adjusted gross profit	$	32,858		$	34,194		$	30,358
Adjusted gross margin %		50.7	%		46.4	%		47.4	%

EBITDA and Adjusted EBITDA:
Calculation of Adjusted EBITDA (in thousands of dollars)	Q3 FY26			Q2 FY26			Q3 FY25
Net income (loss)	$	(246	)	$	113		$	1,182
Income tax expense (recovery)		(235	)		(298	)		384
Interest expense		1,823			2,134			2,042
Depreciation of property, plant and equipment		705			912			754
Depreciation of right-of-use assets		408			388			378
Amortization of deferred development costs		5,386			4,997			4,119
Amortization of intangible assets		789			867			987
EBITDA		8,630			9,113			9,846
Write-down of inventory to net realizable value		1,876			979			949
Loss on sale of assets		19			22			6
Warrant expense (recovery)		385			49			(974	)
Share-based compensation		360			433			486
Acquisition-related costs		–			–			4
Adjusted EBITDA	$	11,270		$	10,596		$	10,317
Percentage of sales		17	%		14	%		16	%

Net Debt:
Calculation of Net Debt (in thousands of dollars)
As at	March 31, 2026			June 30, 2025
Revolving line of credit	$	25,455		$	33,938
Current portion of long-term debt		12,977			8,336
Long-term debt		24,283			19,927
Total revolving line of credit and current and long-term debt		62,715			62,201
Less: cash and cash equivalents		(2,511	)		(3,441	)
Less: lease liabilities		(5,763	)		(5,150	)
Net debt	$	54,441		$	53,610

VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Financial Position (unaudited - in thousands of Canadian dollars)
As at	March 31, 2026		June 30, 2025
Assets
Current assets
Cash and cash equivalents	$	2,511	$	3,441
Accounts receivable		27,193		23,916
Income tax receivable		2,347		1,690
Inventories		101,674		110,631
Prepaid expenses and other current assets		9,203		6,685
Contract assets		4,329		1,159
Total current assets		147,257		147,522
Non-current assets
Property, plant and equipment		11,761		10,935
Right-of-use assets		5,377		4,824
Goodwill		16,714		16,934
Intangible assets		107,569		101,610
Investment tax credits		24,100		22,157
Deferred tax assets		28,849		27,656
Other long-term assets		440		431
Total assets	$	342,067	$	332,069
Liabilities and shareholders’ equity
Current liabilities
Revolving line of credit	$	25,455	$	33,938
Accounts payable and accrued liabilities		35,029		37,694
Provisions		1,209		874
Current portion of deferred revenue		20,312		15,226
Current portion of financial liability		463		290
Current portion of long-term debt		12,977		8,336
Total current liabilities		95,445		96,358
Non-current liabilities
Provisions		550		460
Deferred revenue		9,466		1,755
Long-term debt		24,283		19,927
Total liabilities		129,744		118,500
Shareholders’ equity
Share capital		24,152		24,152
Reserves		7,277		5,966
Retained earnings		177,917		181,857
Accumulated other comprehensive income		2,977		1,594
Total shareholders’ equity		212,323		213,569
Total liabilities and shareholders’ equity	$	342,067	$	332,069

VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited - in thousands of Canadian dollars, except per share amounts)
	Three months						Nine months
Periods ended March 31,		2026			2025			2026			2025
Sales	$	64,832		$	63,979		$	209,628		$	217,107
Cost of sales:
Cost of product and services		32,359			32,647			111,934			125,013
Write-down of inventory to net realizable value		1,822			796			4,045			1,471
Total cost of sales		34,181			33,443			115,979			126,484
Gross profit		30,651			30,536			93,649			90,623
Operating expenses
Research and development		13,498			11,500			38,806			35,062
Sales and marketing		8,728			8,238			26,933			24,937
General and administrative		6,904			6,945			20,199			21,335
Restructuring costs		–			–			–			2,798
Share-based compensation		360			486			1,311			1,494
Other expense		40			19			65			506
Total operating expenses		29,530			27,188			87,314			86,132
Operating income		1,121			3,348			6,335			4,491
Finance expense		(1,813	)		(2,033	)		(6,847	)		(6,751	)
Foreign exchange gain (loss)		211			251			(260	)		(3,513	)
Income (loss) before income taxes		(481	)		1,566			(772	)		(5,773	)
Income tax expense (recovery)		(235	)		384			(843	)		(1,215	)
Net income (loss)	$	(246	)	$	1,182		$	71		$	(4,558	)
Other comprehensive income (loss)
Item that may be subsequently reclassified to net income
Exchange differences on translation of foreign operations	$	1,394		$	(786	)	$	1,383		$	4,303
Comprehensive income (loss)	$	1,148		$	396		$	1,454		$	(255	)
Net income (loss) per share
Basic	$	(0.01	)	$	0.05		$	0.00		$	(0.19	)
Diluted	$	(0.01	)	$	0.05		$	0.00		$	(0.19	)
Weighted average number of common shares
Shares outstanding – basic		24,314,594			24,314,452			24,314,594			24,312,942
Shares outstanding – diluted		24,314,594			24,316,131			24,314,927			24,312,942

VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Changes in Equity (unaudited - in thousands of Canadian dollars)
	Share capital		Reserves			Retained earnings			Accumulated other comprehensive income		Total
Balance as at June 30, 2024	$	24,117	$	4,120		$	204,968		$	1,755	$	234,960
Net loss		–		–			(4,558	)		–		(4,558	)
Other comprehensive income		–		–			–			4,303		4,303
Dividends		–		–			(4,012	)		–		(4,012	)
Shares issued by exercising options		35		(8	)		–			–		27
Share-based payment expense		–		1,494			–			–		1,494
Balance as at March 31, 2025	$	24,152	$	5,606		$	196,398		$	6,058	$	232,214
Balance as at June 30, 2025	$	24,152	$	5,966		$	181,857		$	1,594	$	213,569
Net income		–		–			71			–		71
Other comprehensive income		–		–			–			1,383		1,383
Dividends		–		–			(4,011	)		–		(4,011	)
Share-based payment expense		–		1,311			–			–		1,311
Balance as at March 31, 2026	$	24,152	$	7,277		$	177,917		$	2,977	$	212,323

VECIMA NETWORKS INC. Interim Condensed Consolidated Statements of Cash Flows (unaudited - in thousands of Canadian dollars)
	Three months						Nine months
Periods ended March 31,		2026			2025			2026			2025
OPERATING ACTIVITIES
Net income (loss)	$	(246	)	$	1,182		$	71		$	(4,558	)
Adjustments for non-cash items:
Loss on sale of property, plant and equipment		19			6			53			105
Depreciation and amortization		7,289			6,238			21,360			17,966
Share-based compensation		360			486			1,311			1,494
Warrant expense (recovery)		385			(974	)		566			(1,739	)
Write-down of inventory to net realizable value		1,876			949			3,967			120
Income tax expense (recovery)		(1,095	)		1,258			(694	)		4,181
Deferred income tax expense (recovery)		860			(874	)		(149	)		(5,396	)
Interest expense		1,823			2,283			6,864			6,788
Interest income		(10	)		(10	)		(17	)		(37	)
Net change in working capital		10,555			(11,851	)		6,258			24,362
Decrease (increase) in other long-term assets		(465	)		145			(9	)		327
Increase (decrease) in provisions		161			(434	)		425			380
Increase in investment tax credits		(39	)		(40	)		(117	)		(134	)
Income tax paid		–			(38	)		(3	)		(1,151	)
Interest received		10			12			17			39
Interest paid		(2,013	)		(2,302	)		(6,891	)		(7,053	)
Cash provided by (used in) operating activities		19,470			(3,964	)		33,012			35,694
INVESTING ACTIVITIES
Capital expenditures		(1,224	)		(601	)		(3,473	)		(2,081	)
Proceeds from sale of property, plant and equipment		5			–			5			153
Business acquisitions, net of cash acquired		–			–			–			(3,881	)
Deferred development costs		(8,070	)		(7,771	)		(23,857	)		(22,873	)
Cash used in investing activities		(9,289	)		(8,372	)		(27,325	)		(28,682	)
FINANCING ACTIVITIES
Net draws from (repayments of) revolving line of credit		(7,867	)		13,608			(8,483	)		(6,012	)
Principal repayments of lease liabilities		(517	)		(405	)		(1,329	)		(1,060	)
Repayment of short and long-term debt		(1,495	)		(608	)		(2,315	)		(1,468	)
Proceeds from short and long-term debt		692			935			10,692			935
Proceeds from shareholder loan		–			–			–			5,000
Dividends paid		(1,337	)		(1,338	)		(4,011	)		(4,012	)
Issuance of shares through exercised options		–			12			–			35
Cash provided by (used in) financing activities		(10,524	)		12,204			(5,446	)		(6,582	)
Net increase (decrease) in cash and cash equivalents		(343	)		(132	)		241			430
Effect of change in exchange rates on cash		(269	)		(737	)		(1,171	)		(1,079	)
Cash and cash equivalents, beginning of period		3,123			2,356			3,441			2,136
Cash and cash equivalents, end of period	$	2,511		$	1,487		$	2,511		$	1,487