DATA Communications Management (DCM) investor relations material

Executive summary

• Q2 2026 results were in line with expectations, with revenue down 2.5% year-over-year to $110.9 million, but robust sales activity and strong free cash flow generation.

• Significant progress in debt reduction, with net debt down 26% year-over-year to $64.6 million, the lowest leverage in three years.

• Completed the strategic acquisition of Octacom, a leading Canadian IDP company, expanding tech-enabled offerings and recurring revenue streams.

• New business development accelerated, with higher value per client, increased new logo wins, and a growing pipeline.

Financial highlights

• Q2 2026 revenue was $110.9 million, down from $113.8 million in Q2 2025.

• Gross profit was $28.2 million (25.4% margin), down from $30.5 million (26.8%) year-over-year.

• Adjusted EBITDA was $14.2 million (12.8% margin), down from $16.6 million (14.6%) in Q2 2025.

• Free cash flow for H1 2026 was $15.7 million, a $16.3 million improvement year-over-year.

• Net debt decreased to $64.6 million, down 26% year-over-year.

Outlook and guidance

• Management expects a return to positive year-over-year revenue growth in the second half of 2026, driven by a favorable business mix and continued momentum in new business.

• Octacom acquisition anticipated to deliver enhanced revenue and earnings through the balance of the year.

• Focus remains on maintaining high revenue retention, driving new business, improving gross margins, and generating robust cash flow to support debt reduction.

• Modest margin improvement expected in Q3, with greater benefits from Octacom and cross-sell opportunities likely in 2027.

• Commitment to operational discipline, profitable growth, and maintaining the quarterly dividend.