Thank you, operator, and good morning, everyone. Welcome to today's call to discuss DIRTT's third-quarter 2026 financial results.

Joining me on the call today are Benjamin Urban, our Chief Executive Officer, and Fareeha Khan, our Chief Financial Officer. Today's call will include forward-looking statements within the meaning of applicable Canadian and United States securities laws.

These statements are based on our current expectations and are not guarantees of future performance. Actual results may differ materially from those expressed or implied by these statements.

We will also reference non-GAAP measures during this call, including adjusted EBITDA and adjusted gross profit. Reconciliations of these measures to the most directly comparable GAAP measures can be found in our quarterly filing and supplemental materials.

With that, I'll turn the call over to Fareeha to review our financial results.

Thank you, Adrian, and good morning, everyone. Revenue for the third quarter of 2026 was $44.7 million compared to $37.7 million in the prior-year period, representing a growth of approximately 19% year-over-year.

Product revenue totaled $41.5 million compared to $36.7 million in the prior-year period, while service revenue was $3.2 million compared to $1 million in the prior-year period. Commercial activity remained the largest contributor to product revenue during the quarter, and we also saw strong year-over-year growth in government revenue and in Canada.

Gross profit for the quarter was $15.7 million compared to $11.5 million in the third quarter of 2025. Gross margin increased to 35.1% compared to 30.4% in the prior-year period.

The improvement was primarily due to lower tariff and tariff mitigation costs and higher volumes, partially offset by increasing material costs. Tariff and tariff mitigation costs were $0.3 million in the quarter compared with $1.9 million in the prior-year period.

Adjusted gross profit was $16.6 million compared to $12.5 million in the prior-year period, while adjusted gross profit margin improved to 37.1% compared to 33.1% in the third quarter of 2025. Total operating expenses were $11.3 million, down from $15.2 million in the prior-year period.

The decrease reflects lower spending across sales and marketing, operations support, and the technology and development functions, as well as lower stock-based compensation and reorganization expenses, partially offset by slightly higher general and administrative expenses. Excluding stock-based compensation, depreciation and amortization, and reorganization expenses, operating expenses also declined year-over-year, reflecting actions taken to simplify the organization, improve operating efficiency, and better align our cost structure with the needs of the business.

Reorganization expense was approximately $0.3 million during the quarter compared to $2.6 million in the prior-year period, and reflects continued actions associated with the company's transformation initiatives. Operating income for the quarter was $4.4 million compared to an operating loss of $3.7 million in the third quarter of 2025.

Net income after tax was $17.1 million compared to a net loss after tax of $3.7 million in the prior-year period. During the quarter, we recognized a $13.1 million deferred tax asset, primarily related to net operating loss carryforwards, resulting in a non-cash income tax benefit of $13.1 million.

The asset was recognized based on sustained profitability, supporting the conclusion that the related tax benefits are more likely than not to be realized. Adjusted EBITDA was $6.5 million, or 14.6% of revenue, compared to $1.2 million, or 3.1% of revenue, in the prior-year period.

Turning to liquidity, net cash provided by operating activities was $3.1 million during the quarter compared to $4.4 million in the third quarter of 2025. We ended the quarter with approximately $19.3 million of cash and cash equivalents, up from $14.8 million at June 30, 2026.

For the first nine months of 2026, revenue was $127.5 million compared to $117.9 million in the prior-year period, an increase of approximately 8%. Gross profit was $42.7 million, or 33.5% of revenue, compared to $36.8 million, or 31.2% of revenue, in the prior-year period.

Adjusted gross profit increased approximately 14% to $45.5 million, or 35.7% of revenue, compared to $39.8 million, or 33.8% of revenue, in the prior-year period. Adjusted EBITDA for the nine months was $12.7 million, or 9.9% of revenue, compared to $1.3 million, or 1.1% of revenue, in the prior-year period.

Net income after tax was $14.9 million compared to a net loss after tax of $10.7 million in the prior-year period. Year-to-date, service revenue totaled $6.2 million compared with $3.2 million in the comparable period of 2025.

For the third quarter, service revenue increased 207% to $3.2 million from $1 million, reflecting a higher number of installation projects through our construction services channel, including two large healthcare projects and one large technology project in progress during the first nine months of 2026. With a strengthened balance sheet and a streamlined operating model, we remain confident in the underlying health of the business, our ability to continue expanding profitability, and our capacity to create meaningful long-term value for shareholders.

With that, I'll turn the call over to Benjamin.

Thank you, Fareeha. During the third quarter, DIRTT continued to build on the operational and commercial improvements achieved over the past 18 months.

Although customer decision-making timelines remain measured in certain markets, we are seeing increased consistency in project qualification, stronger alignment between commercial activity and forecasted revenue opportunities, and improved visibility into the timing of potential project awards. Our focus remains on strengthening commercial execution, improving forecasting discipline, enhancing operational efficiency, and positioning the business for sustainable, profitable growth over time.

The third quarter reflects meaningful progress across several key areas of the business. Revenue increased approximately 19% year-over-year, while gross profit and gross margin improved significantly.

At the same time, operating expenses declined meaningfully compared to the prior-year period, and reorganization costs were substantially lower. Commercial activity remained encouraging during the quarter.

Commercial revenue increased approximately 30% year-over-year and represented approximately 68% of product revenue, compared to approximately 60% in the prior-year period. Government revenue more than doubled, and education grew approximately 13%, while healthcare declined against a strong prior-year quarter, primarily reflecting the timing of large healthcare project shipments.

Revenue in Canada also more than doubled year-over-year. We continue to make targeted investments in leadership, organizational capability, and go-to-market effectiveness, including the addition of a Vice President of Commercial earlier this year.

These investments are intended to strengthen commercial execution, enhance partner engagement, and support more efficient conversion of opportunities into revenue. Our commercial activity continues to support confidence in the business.

At October 1, our 12-month forward pipeline was approximately $290.3 million across 1,662 qualified leads, down 13% from both January 1, 2026, and October 1, 2025. We view that moderation in the context of our continued focus on improving pipeline quality and forecasting reliability through enhanced qualification processes and greater emphasis on higher-value, higher-margin opportunities.

We are also strengthening our forecasting processes through clear stage ownership and exit criteria, more structured Salesforce data, and improved pipeline review and reporting. Construction services is becoming a more prominent element of our commercial strategy and business development efforts.

These engagements typically benefit from contractual arrangements that provide greater visibility following award and support more predictable revenue realization. As the offering scales, we are focused on strengthening project execution, maximizing margin performance, and expanding the range of solutions we can deliver to customers.

We continue to advance DIRTT's transformation across the organization, including process standardization, cost optimization, partner enablement, commercial execution, and greater operating discipline. The financial performance achieved this quarter reflects the increasing impact of these actions as they become embedded in the business.

Importantly, we do not believe the transformation has yet reached its full run rate, providing further opportunity for sustained value creation. Collectively, these efforts are enhancing organizational effectiveness and positioning the company to drive sustainable, profitable growth.

With respect to tariffs and raw material costs, the environment continues to evolve. Based on our review of US tariff revisions announced in April and June, we believe imports of DIRTT products into the United States are no longer subject to certain Section 232 steel and aluminum tariffs.

Certain tariffs under Section 338 of the Tariff Act of 1930 were imposed by the United States on certain Canadian goods. We believe these tariffs have an immaterial impact on the company.

Tariff and tariff mitigation costs declined to $0.3 million in the third quarter from $1.9 million in the prior-year period. We continue to maintain our 3.5% tariff surcharge and 1% aluminum price surcharge, and subsequent to the quarter, increased our freight surcharge by an additional 2%, following the 8% freight surcharge implemented earlier this year.

We are continuing to monitor raw material costs and trade developments, and use pricing actions, surcharges, and operating efficiencies to mitigate their impact. Regarding the Falkbuilt litigation, the trial completed its hearing dates on August 7, 2026.

Written submissions were exchanged in September and October, and final oral argument is scheduled for November 18th through November 20th, 2026. DIRTT is pursuing damages alleged to approach $90 million Canadian, inclusive of prejudgment interest plus costs.

The outcome remains uncertain, and no recovery has been recognized in the financial statements. Looking ahead, with improving commercial discipline and a streamlined operating model, DIRTT remains focused on disciplined execution and building a stronger, more profitable business for shareholders, partners, and employees.

We are maintaining our 2026 outlook for revenue of $175 million to $185 million, and adjusted EBITDA of $21 million to $25 million. Based on current project timing and revenue conversion, we currently expect to finish toward the low end of both ranges.

I would like to thank our employees, partners, customers, and shareholders for their continued support. With that, operator, please open the call for questions.

Hi, Ben and Fareeha, good morning.

Good morning, Kaelan.

Just two questions for me today. The first being, I know healthcare has historically been the segment with the most visibility, partly through construction services.

Was the Q3 dip a timing issue? Just some more color there would be helpful on how we kind of get back to 2025 levels.

It's a great question, Kaelan. It is very much a timing issue.

Healthcare projects tend to have longer sales cycles, and so you'll see that kind of volatility in when they come through. They tend to be larger as well than your average commercial project opportunity, so that's kind of indicating what happened there.

Great. Thanks.

Then second one here on the pipeline. We're again seeing a quantified decrease here.

Could you just provide some more details on what you think about this new pipeline and your confidence in it? If you have it, an estimated win rate and conversion for it?

Kaelan. I can't comment on the conversion rate on it, but as mentioned, what I can comment on is we've been focused very much on improved quality and fidelity of what is in the pipeline.

I'd also comment that the actual quantity of opportunities that we're pursuing has actually increased year-over-year, which also gives us better stability in our forecasting ability as we move forward. We are very much now focused as well, as I commented on, from a commercial lens on growing the top line on a dollar amount to help continue to get that pipeline moving.

Understood. Thanks again, guys.

Appreciate the color.

Thanks, Kaelan.

Hey, good morning.

Couple of

questions for you. Good morning, Jeff.

Hi, Ben. You've been spending a fair bit of time, we'll call it right-sizing the quality of the pipeline.

I think

you referred to your CRM in your PR in this last quarter. Where do you think you are on that journey?

I know it's probably an ongoing one, but on a scale of sort of 1 to 10, 10 being the best, how far are you along that journey, or you towards that 10?

That's a good question, Jeff. I wouldn't be able to give you a 1 to 10 rating on it, but what I can comment on is our improvement in how we are actually tracking leads, in addition to the quality of them coming in, and effectively aligning that rather than with, we'll call it, just percentage rates, but to construction schedules and stage gates, allows us the ability not just to improve the conversion rate, but also, as equally important, improve our forecasting ability of when those projects are actually going to order.

As you're probably aware, there's been some volatility in is it going to order in Q3, is it going to order in Q4, is it going to order in Q1, right, as construction projects move, because we don't have a lot of control over schedules on site. This allows us better visibility there, but then also, it's not just in how we are tracking or quantifying it, but truly changing the behaviors from our commercial organization in how that data is input in and how we're managing it.

That portion of our commercial transformation, I can say a lot of the front-end work is complete. Now is really more integration into our forward pipeline as we layer in new opportunities.

The breadth of the actual existing pipeline has been, we'll call it, re-stratified around those stage gates, which is increasing our ability to forecast, and obviously with a goal of improving our conversion rates.

Fair. Second question for me, kind of a two-parter.

Curious what kind of initiatives you're taking presently to accelerate growth, and what sort of visibility do you have that you can achieve that in 2027? Thanks.

Yeah. For accelerating growth, Jeff, we continue to not just growing our partners, right, but also layering an additional direct sales representatives for the commercial org.

We have multiple open positions that we are recruiting for, and as well still focusing on the construction services channel. I'd say amongst those three different discrete growth opportunities, all of those are significantly in flight.

As I commented on the call, with our new Vice President of Commercial is very much leading that charge. I'd say that is, and as we look into 2027, and increased confidence around top-line inflection, that is very much on the other side, if you will, of our transformation of the commercial organization.

As we've been transforming the entire enterprise in full support of those endeavors.

Thank you.

For sure. Thanks, Jeff.

Thank you. No further remarks.

Thank you, everyone.