TeraGo Q2 Earnings Call Highlights

TeraGo (TSE:TGO) reported higher adjusted EBITDA and average revenue per account in the second quarter of 2026, while revenue declined modestly as the company continued to reshape its customer base and worked through the effects of lower booking activity in 2025.

Chief Executive Officer Daniel Vucinic said the company saw stronger booking activity during 2026, contributing to sequential growth in monthly recurring revenue backlog from the first quarter. Management also highlighted a May decision by Innovation, Science and Economic Development Canada, or ISED, concerning the future licensing framework for the 26 GHz and 38 GHz spectrum bands.

Second-Quarter Financial Results

Total revenue was CAD 6.21 million in the second quarter, compared with CAD 6.34 million a year earlier. Chief Financial Officer Raj Sapra said the revenue decline reflected lower bookings during 2025, delays in certain installations related to larger multi-site customer deployments, and TeraGo’s effort to discontinue unprofitable accounts.

Those factors were partly offset by revenue from customers added during the year, Sapra said.

Adjusted EBITDA increased 16.8% year over year to CAD 1.06 million from CAD 903,000. The improvement was primarily driven by lower operating expenses and continued cost-management, capital-allocation and operational-efficiency measures, according to Sapra.

TeraGo reported a net loss of CAD 3.82 million, improving from a CAD 4.26 million net loss in the comparable quarter of 2025. The company ended the quarter with CAD 6.6 million in cash and cash equivalents.

• Revenue: CAD 6.21 million, versus CAD 6.34 million a year earlier.
• Adjusted EBITDA: CAD 1.06 million, up from CAD 903,000.
• Net loss: CAD 3.82 million, compared with a CAD 4.26 million loss.
• Cash and cash equivalents at June 30: CAD 6.6 million.

Customer Metrics and Bookings

Average revenue per account, or ARPA, in the company’s connectivity business rose 4.2% to CAD 1,279, compared with CAD 1,228 in the year-earlier period. Sapra attributed the increase to TeraGo’s focus on winning mid-market and larger enterprise customers, including multi-location organizations, as well as increasing its share of spending from existing customers.

Quarterly churn was 1.0%, compared with 0.9% in the same quarter last year. Sapra said TeraGo continues to review customer-experience, retention and service-delivery initiatives with the goal of reducing churn over time.

Backlog monthly recurring revenue, or Backlog MRR, stood at CAD 78,788 at June 30, down from CAD 93,279 a year earlier. The year-over-year decrease reflected higher installation volumes and lower bookings during fiscal 2025. However, Backlog MRR increased from March 31 as booking activity strengthened during the first half of 2026.

Vucinic said the company is pursuing larger mid-market and enterprise customers, particularly organizations with multiple locations, where it believes its managed connectivity services, wireless network capabilities and “white glove” service model can differentiate the business.

He also said TeraGo has continued to move away from lower-margin and unprofitable customer accounts that do not align with its longer-term objectives.

ISED Decision on Millimeter-Wave Spectrum

Management characterized ISED’s decision on the 26 GHz and 38 GHz spectrum bands as the quarter’s most significant development. Vucinic said the decision provides a long-term framework for the company’s spectrum licenses after years of regulatory uncertainty.

The framework establishes flexible-use licensing, allowing spectrum to be used for fixed and mobile services, and outlines a transition process for incumbent licensees. It also sets an October 2027 timetable for a spectrum auction.

Vucinic said TeraGo, which he described as Canada’s largest holder of millimeter-wave spectrum licenses, believes the flexible-use framework expands potential uses for its portfolio. Management cited private 5G wireless networks, enterprise mobility applications, advanced fixed wireless access, public hotspot capacity expansion and other connectivity applications as potential opportunities.

The company also pointed to investment trends involving artificial intelligence infrastructure, private wireless networks, digital-twin environments and advanced 5G applications. Vucinic said these trends are contributing to demand for high-capacity, low-latency connectivity.

Outlook

For the remainder of 2026, TeraGo said it will focus on improving sales bookings, increasing the quality of its revenue base, expanding profitability and pursuing opportunities tied to the Canadian millimeter-wave ecosystem.

“With a leading millimeter-wave spectrum position, an established wireless network platform, and a growing enterprise customer base,” Vucinic said, the company believes it is positioned to participate in the development of Canada’s millimeter-wave market.

About TeraGo (TSE:TGO)

TERAGO provides managed network and security services to businesses across Canada ensuring highly secure, reliable, and redundant connectivity including private 5G wireless networks, Fixed Wireless access, fiber, and cable wireline network connectivity. As Canada's biggest mmWave spectrum holders, the Company possesses spectrum licenses in the 24 GHz and 38 GHz spectrum bands, which it utilizes to provide secure, dedicated SLA guaranteed enterprise grade performance that is technology diverse from buried cables ensuring high availability connectivity services.

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