Haivision Systems Q2 Earnings Call Highlights

Haivision Systems (TSE:HAI) reported lower fiscal second-quarter revenue and reduced its full-year outlook, citing geopolitical uncertainty, procurement delays, supply chain constraints and customer budget reprioritization tied in part to artificial intelligence infrastructure spending.

President, CEO and Chairman Mirko Wicha said the quarter, which ended April 30, unfolded against “one of the most complex global operating environments” the company has seen in recent years. He pointed to heightened geopolitical tensions, including conflict in the Middle East, ongoing supply chain volatility, component availability challenges and customer procurement delays.

“Some customer programs and capital spending decisions have shifted to the right, impacting the timing of some revenue recognition,” Wicha said. He added that Haivision has not seen a change in the underlying fundamentals of the business or in long-term demand for its technology.

Revenue Falls in Q2, but First-Half Sales Remain Higher

Haivision said second-quarter revenue was CAD 32.5 million, down CAD 1.8 million, or 5.1%, from the prior-year period. For the first half of fiscal 2026, revenue was CAD 76.8 million, up CAD 5.3 million, or 8.5%, from the same period a year earlier.

The company said customer decision-making and purchasing patterns were affected by several external factors. In defense, Haivision said it has not seen evidence of a structural demand issue, but noted that spending is being directed toward urgent readiness priorities such as air defense, counter-drone capabilities and replenishment. Broader modernization programs remain subject to normal budget cycles and approval processes.

One large defense program is expected to contribute to lower purchasing levels in the near and medium term because assets tied to the program are currently deployed, with no defined timetable for their return. Haivision said the underlying requirement remains intact.

The company also said AI has become a major investment priority for customers, contributing to longer IT approval cycles in enterprise markets as buyers prioritize AI infrastructure, cybersecurity, cloud optimization and cost reduction. In broadcast, Haivision cited constrained media technology budgets and heightened scrutiny of returns on investment for cloud, IP, remote production and infrastructure upgrades.

Margins Pressured by Product Mix and Component Costs

Gross margin for the second quarter was 68.9%, down 410 basis points from the prior-year period. Year-to-date gross margin was 69.7%, down 200 basis points from a year earlier.

Haivision said the second-quarter margin decline was driven primarily by the magnitude and composition of deliveries to a large defense customer. Revenue from those deliveries increased about threefold from the same period last year, but the mix was weighted toward lower-margin third-party components rather than higher-margin proprietary Haivision products.

The company said approximately CAD 3 million of proprietary product deliveries shifted from the second quarter into the third quarter because of supply chain constraints. Those deliveries are expected to carry a more favorable margin profile.

Haivision also warned that component costs are rising as memory and compute-related inputs tighten. The company said manufacturers using memory, GPUs, CPUs, SSDs, NICs and FPGAs are facing broker purchases, higher bond costs, longer lead times, allocation risk and expedite fees. It said component end-of-life events affecting active production have doubled in the last six months compared with the prior six-month period.

Company Changes Server Pricing Model

To address volatility in server input costs, Haivision said it has changed how it quotes server-based solutions. Servers are now offered as a separate line item rather than bundled with software into an appliance-like offering. Customers may purchase software-only or virtual machine options, buy servers through Haivision or source servers through their own channels.

The company said the change is intended to protect margins, though it could reduce reported revenue by as much as CAD 2 million depending on how many customers source server hardware independently.

In response to analyst Daniel Rosenberg of Paradigm, Wicha said pricing actions announced last month should begin to affect results in the third quarter and more fully in the fourth quarter and following year. He said Haivision has decoupled hardware and software pricing for some systems and made hardware non-discountable.

“We cannot continue absorbing these new changes,” Wicha said, adding that customers are seeing similar price pressures across the market.

Expenses Held Steady; Adjusted EBITDA Lower in Q2

Total expenses in the second quarter were CAD 25.6 million, down CAD 2.6 million from the prior-year period, though the comparison included CAD 1.5 million of non-recurring legal settlement and related fees in the prior year. On a year-to-date basis, Total expenses were CAD 50.6 million, flat with the prior year.

The second-quarter operating loss was CAD 3.1 million, unchanged from the same period last year. For the first half, operating loss improved to CAD 3.3 million from CAD 5.4 million a year earlier.

Adjusted EBITDA for the quarter was CAD 300,000, compared with CAD 1.7 million last year. Adjusted EBITDA margin was 1%, down from 4.9%. For the first half, adjusted EBITDA was CAD 2.9 million, up about CAD 700,000, or 31%, from the prior year.

Haivision ended the quarter with CAD 18.1 million in cash, up CAD 1.1 million from the previous quarter. The company said CAD 5.1 million was outstanding on its CAD 35 million credit facility, which was recently extended to August 2028. Haivision also renewed its normal course issuer bid in January and said it repurchased more than 200,000 shares in May for CAD 1.2 million.

Outlook Cut, Long-Term Growth Target Reaffirmed

Haivision lowered its fiscal 2026 revenue expectation to a range of CAD 140 million to CAD 142 million. The company said it expects near-term margins closer to 70% as supply chain conditions pressure costs.

Despite the guidance reduction, Wicha said Haivision remains optimistic about longer-term prospects. In response to Canaccord Genuity analyst Robert Young, Wicha said the company has not seen program cancellations or de-scoping, only delays.

“No, we haven’t seen any cancellations at all,” Wicha said. “It’s just going to be shifting to the right a bit.”

Wicha said the company continues to target double-digit revenue growth over time and sees a path toward 20% EBITDA margins closer to late fiscal 2027 and into fiscal 2028 and 2029, supported by a large defense program, product launches and supply chain changes.

Haivision also highlighted a broad product refresh across its mission systems and broadcast and media businesses, including next-generation platforms, software capabilities, AI-enabled solutions and integrated technologies. Wicha said the company expects new products to contribute more meaningfully in fiscal 2027 and beyond.

About Haivision Systems (TSE:HAI)

Haivision is a leading global provider of mission-critical, real-time video streaming and visual collaboration solutions. Our connected cloud and intelligent edge technologies enable organizations globally to engage audiences, enhance collaboration, and support decision making. We provide high quality, low latency, secure, and reliable live video at a global scale. Haivision open sourced its award-winning SRT low latency video streaming protocol and founded the SRT Alliance to support its adoption.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected].

Where Should You Invest $1,000 Right Now?

Before you make your next trade, you'll want to hear this.

MarketBeat keeps track of Wall Street's top-rated and best performing research analysts and the stocks they recommend to their clients on a daily basis.

Our team has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the broader market catches on... and none of the big name stocks were on the list.

They believe these five stocks are the five best companies for investors to buy now...

See The Five Stocks Here

Source MarketBeat