Quarterhill Inc.

Quarterhill reported Q2 2026 revenue of $42.5 million versus $43.1 million a year ago. Gross profit was $12.2 million, or 29% of revenue, up from $6.3 million, or 15% of revenue, in Q2 2025. Adjusted EBITDA was $4.6 million, or 11% of revenue, compared with an adjusted EBITDA loss of $2.7 million, or minus 6% of revenue, in the prior-year quarter, a $7.3 million year-over-year improvement. For the first six months of 2026, revenue grew 5% to $81.1 million from $77 million. Cash from operations was $5.7 million versus a use of cash of $4.6 million last year, and cash ended the quarter at $26.2 million. Management did not provide quarterly revenue or EPS guidance, but said the Conduent transaction is expected to close in Q4 2026 and, on a pro forma combined basis after planned synergies, should generate more than $400 million in annual revenue with adjusted EBITDA margin of 10% to 15%; backlog would rise to about $2 billion.

Chuck Myers framed the quarter as evidence of consistent execution, stronger profitability, and operating leverage in the model. He emphasized that technology and AI-enabled transportation systems are becoming a key differentiator, helping Quarterhill win new work and expand existing relationships. On the Conduent deal, he was notably upbeat, saying it materially advances the strategy, should expand scale, and is still expected to close in the fourth quarter.

David Charron focused on the improved financial profile: revenue of $42.5 million, gross profit of $12.2 million at a 29% margin, adjusted EBITDA of $4.6 million at an 11% margin, and $5.7 million in operating cash flow. He also highlighted the balance sheet, noting cash of $26.2 million and the newly closed secured term loan with a $100 million accordion facility, which he said gives flexibility to fund operations, growth, and acquisitions. On the Conduent transaction, he reiterated the $70 million cash purchase price plus shares equal to 7% of shares outstanding at closing and said the combined company could reach more than $400 million of annual revenue with 10% to 15% adjusted EBITDA margin.

Analysts pressed on business mix, with management saying tolling is about 55% of the business and safety/enforcement about 45%, and that both are profitable. Questions around the Conduent deal focused on synergy timing, backlog quality, and integration complexity; management said synergies are being worked through in areas like headcount, real estate, and vendors, but it is still early and they are not ready to disclose detailed savings or staffing needs. Management also said the combined backlog is fully contracted, there is little overlap between the two businesses’ contracts, and lender/surety discussions are standard parts of the close process, with the deal still expected to close in Q4.