Good morning, and welcome to the InTouch Insight second quarter 2026 earnings conference call. All participants will be in listen-only mode.

After today's presentation, there will be an opportunity to ask questions. Joining me today is Cameron Watt, President and Chief Executive Officer, and Cathy Smith, Chief Financial Officer.

Before we begin, I'd like to remind you that our remarks today contain forward-looking statements that are subject to risks and uncertainties. Actual results may differ materially from those anticipated.

Please refer to our regulatory filings for a full discussion of the risks and uncertainties that could affect our results. During this call, we will also discuss certain non-IFRS financial measures, including adjusted EBITDA.

Reconciliations of these non-IFRS measures to the most comparable IFRS measures are included in our MD&A, which is available on SEDAR+. With that, I will turn the call over to Cameron Watt.

Thank you, James, and thank you all for joining us today. Last quarter, I told you that 2026 would be a year of deliberate investment, and that we expected the growth curve to build as the year progressed.

The second quarter is that story playing out. Revenue of about $7 million was up 8% from $6.5 million a year ago.

That is our strongest quarterly growth rate in seven quarters. It's also organic, and it's a step up from the 6% from the first quarter.

The curve is bending the way we said it would. Each of our major product lines contributed, in fact.

SaaS grew to $475,000, recurring services was up 6% to $5.9 million, event marketing automation grew 8% to $573,000, and merchandising, which did not exist in the prior year, contributed $83,000. Let me be direct about the profit line.

Look, we recorded net loss of $43,136 in the quarter. It's essentially break-even, and it's in line with what we planned.

In the first six months of the year, we generated $64,000 of net income, right, $580,000 of adjusted EBITDA, and I would flag that both figures include a foreign exchange gain of about $143,000. Excluding currency, we're modestly below break-even instead of modestly above it.

We have achieved effective break-even while investing in our sales organization and organizational capabilities. We have funded this program without issuing a single share.

Our share count is exactly where it was at the start of the year. Adjusted EBITDA of $227,559 in the quarter is down from $370,812 a year ago, and $580,183 for the first half is down from $928,560 in the first.

That gap has three parts, and I want to name all of them. The first is investment, which is deliberate.

We've added materially to the sales organization exactly as we told you we would in February and again in May, and selling expense is up about $164,000 in the quarter. The second is general and administrative costs, up about $181,000 excluding the currency swing, which Cathy will break down.

The third is product development, up about $93,000, and Cathy will explain that it's almost entirely the absence of investment tax credits rather than new spend. Gross profit was essentially flat.

Our margin percentage was 46.7% this quarter against 50.4% a year ago, which is product mix including the merchandising work we're ramping. The revenue grew about half a million dollars, and gross profit did not grow with it.

I'm not going to dress that up. What I would ask you to watch is whether absolute gross profit dollars start moving as the merchandising and the other revenues continue to build.

Now, let me walk through the four areas where we are putting the investment to work. First, software and SaaS.

SaaS revenues were up 18% in the quarter. I want to give you an honest picture around that number.

Part of it is new business we signed, expansion with existing clients; part of it is foreign exchange, which moved in our favor through the year; and we've seen a small amount of client attrition, a handful of idiosyncratic situations. One client, his point of sale vendor bundled a comparable capability at no cost.

Another lost to a consolidation where the acquirer simply didn't use the tool. Those are one-off situations, not a pattern, and we plan for normal level of attrition in any business regardless.

Taken together, I would not have you model 18% growth for the full year in SaaS, however. What I would have you take away is that SaaS is healthy, it's contributing, and it's on track with our new strategy and approach.

On the pipeline side, the seven-figure SaaS RFP in our core QSR vertical that I described last quarter is still moving, slowly and not on our timetable, but it's moving. What I can tell you is that we've cleared every qualification date to date, and we remain in that process.

We do not control their timing, and I would continue to think of that opportunity as a 2027 revenue event rather than a 2026 one. Second, from a merchandising standpoint, I'm going to give you the unvarnished version.

Merchandising has quite simply been slower off the line than we wanted. We generated $37,000 in the first quarter and only $83,000 in the second, about $120,000 for the first half of the year against a target for the full year of about a million dollars.

That's not where we planned to be at the halfway mark, but startups are unpredictable, and they're lumpy. You have to have the discipline to trust your strategy and to be agile.

During the second quarter, we've actually secured an additional merchandising customer, and we have contracted work in hand for the third quarter that exceeds the combined revenue for the first half of the year. We've also strengthened the sales organization dedicated to the business, and based on the contracts signed today, we expect third-quarter merchandising revenue on its own to be much larger than what we did in the first six months.

I want to be clear about why I'm comfortable saying that. This is not pipeline optimism; it's signed work in the field.

Merchandising is also a business where programs can go from nothing to substantial in a matter of weeks, which is what makes it frustrating on the way up and powerful once it turns. We are holding our full-year target of more than $1 million.

The third area is new market expansion. Our push into grocery is progressing on schedule.

We produced proprietary grocery research in partnership with Informa Connect and Next Chapter, and earlier this week, Sarah Beckett, our VP of Sales and Marketing, and myself presented that research during the general session at Grocery NEXT in Chicago in front of an invitation-only audience of senior grocery operators. As I said last quarter, we do not expect grocery to move the revenue line in 2026.

This is pipeline and credibility building for 2027 and beyond, and it's tracking exactly to that plan. Fourth, thought leadership.

This is not a marketing line item for us; it is how our sales team gets in the door. In the quarter, we published our 2026 C-Store Trends Report and our 2026 Emerging Experiences Study on mobile order, and earlier this month, we presented our annual convenience industry study, which encompasses almost 3,000 site visits across 14 leading brands.

I presented it on the main stage at the Outlook Leadership Conference, where we also announced our Top Operator Award in conjunction with CSP Daily News. This study has become the benchmark the industry measures itself against, and it puts us in front of the executives who sign our contracts.

With that, I will now hand the call over to Cathy to review the financials in more detail.

Thank you, Cameron, and good morning, everyone. Total revenue for the second quarter was $7,015,784, an increase of 8% or $512,245 compared to the $6,503,539 in Q2 2025.

By line, SaaS revenue was $474,999, up 18% from the $403,399 last year. Recurring services revenue was $5,879,676, up 6% from the $5,545,064 in the prior year.

Event marketing automation revenue was $572,560, up 8% from $528,745. Merchandising revenue was $82,824 against nil in the prior-year period.

Non-recurring services revenue was $5,725, down from $26,331, and is not material to either period. Geographically, US revenue was $5,839,165, up 15% and represented 83% of total revenue.

Canadian revenue was $1,169,422, down 18%, with international revenue of $7,197 making up the small balance. Our US revenue is reported in Canadian dollars and was affected by foreign exchange.

Gross margin for the quarter was 46.7% compared to 50.4% in Q2 of 2025. In dollars, gross margin was $3,275,474, essentially flat against the $3,278,092 we reported a year ago.

Cost of services rose 16% on 8% revenue growth, driven by staff and contractor expense and by delivery and communication costs, which rose 26% as merchandising activity increased. The margin percentage decline is a mix effect rather than a pricing change.

Operating expenses continue to reflect the strategic investments Cameron described. I would note that the prior-year comparison is not clean at the operating line.

Q2 2025 total operating expenses of $4,299,212 included a non-cash impairment charge of $1,193,484 against goodwill and intangible assets associated with the loss of an acquisition-obtained customer. Excluding that item, Q2 2025 operating expenses were roughly $3.1 million, and operating income was approximately $172,000 against $54,361 this quarter.

Selling expenses were $845,670, up 24%, with salaries and benefits up 52% as we added sales capacity and travel up 39%. Marketing spend was $293,956, down slightly year-over-year.

Product development expenses were $561,293, up 20%. I want to be clear about that increase: product development salaries were essentially flat, up 1.4%.

The majority of the change is the absence of investment tax credits and government contributions, which were $84,551 in the prior-year quarter and nil this quarter. General and admin expenses were $1,814,150, down 7% as reported.

That decrease is a foreign exchange effect. G&A this quarter includes a foreign exchange gain of $93,957 against a loss of $228,516 a year ago.

Excluding that swing, underlying G&A was up about 10% year-over-year. The largest components of that underlying increase were investments in computer and AI-related capabilities, which accounted for approximately $78,000, and an increase in salaries of approximately $98,000 as we expand capacity.

Turning to profitability, adjusted EBITDA for the quarter was $227,559 compared to $370,812 in the prior year. Three things drive that decline against essentially flat gross profits: selling expenses, which were up $164,000; other G&A costs, up about $181,000 excluding the currency swing; and product development, which was up $93,000.

Partly offsetting them is a favorable foreign exchange swing of about $322,000. I would note that adjusted EBITDA includes the foreign exchange gain I mentioned, on a constant-currency basis, the underlying decline is larger than the reported figures suggest.

We recorded a net loss of $43,136 for the quarter, or $0.00 per share, compared to a net loss of $1,112,023, or 4 cents per share, in Q2 2025, which, as I noted, included that impairment charge. On a year-to-date basis, we've generated net income of $64,169 and an adjusted EBITDA of $580,183 compared to a net loss of $899,421 and adjusted EBITDA of $928,560 in the first half of 2025.

Revenue for the first six months was $13,686,230, up 7% from $12,823,202. Now cash.

Because the number moved, I want to address it directly. Cash used in operating activities was $403,631 in the quarter and $598,857 year-to-date against $136,190 generated in the first half of last year.

Before changes in working capital, we generated $587,199 year-to-date. The swing is working capital, and specifically receivables, which grew $1,053,513, or 28%, from year-end to $4,799,481.

In days, that's roughly 62 days of revenue outstanding, roughly 57 at year-end, it's a 5-day move. I would point you to two things in the aging.

First, effectively all of the increase sits in the current and 1 to 60-day buckets. Second, receivables more than 60 days past due actually fell 44% from $419,971 at year-end to $236,517, and our provision for expected credit losses came down as well.

This is collection timing on a small number of larger accounts, not a change in the quality of our revenue, and we expect it to normalize. On the balance sheet, we ended the quarter with $954,386 in cash, down $644,774 from year-end, and working capital of $4,597,524, up from $3,192,326.

I want to be straightforward about what drives that working capital increase. It's the receivables build I just described, together with the March refinancing, which moved roughly $491,000 of debt out of the current portion.

It is not operating cash generation. Our current ratio is 4.02 to 1.

The term facility we refinanced in March with our chartered bank is authorized to $2.6 million, of which $1.965 million was drawn at quarter-end, and the balance remains available subject to disbursement conditions. Principal repayments on that facility are deferred until February 2028.

We have nil drawn on our $3 million demand operating loan compared to a $380,000 balance at year-end. Between that undrawn facility and our receivables position, we do not anticipate raising equity to fund this organic growth program.

With that, I'll pass it back to Cameron.

All right. Thanks, Cathy.

Before we turn to your questions, a quick word on the outlook. Our 2026 expectations are unchanged, and they're the same ones we set out in our MD&A: double-digit organic revenue growth by year-end, merchandising revenue exceeding $1 million, and continued investment into our strategy, which may result in an operating loss.

On funding, we intend to fund those investments from cash generated by operations and our existing credit facilities, and we do not anticipate that shareholder dilution will be required. We went into this year expecting the growth curve to be back-half weighted, and the first half has come in essentially where we expected: 6% growth first quarter, 8% growth in the second, break-even on the profitability side, and no shareholder dilution.

To reach double digits for the full year, the back half needs to be about 13% against roughly 7% in the first half. I know you can all do math, we did it for you, and yes, that's a hill, but we have signed merchandising work in the third quarter, and we also have other agreements, and we're working towards that goal on the services and the software side.

Is there risk to the exact number? There always is, but I would rather stand here and tell you that we are investing into a set of opportunities we can see in front of us than manage this company for a prettier quarterly print and leave market share on the table.

The lifetime value of the contracts we are pursuing is worth considerably more than the optics of a small loss. This should not be a surprising quarter in either direction.

It is what we said we'd do, and with that, we're ready to take your questions.

Thank you, Cameron. We'll now poll for questions.

Please use the Q&A function here in the Zoom room to ask a question. We'll pause while the questions queue.

I do see the first one coming in here. 8% growth is your strongest in seven quarters and fully organic.

What changed in the business, and what makes you confident it holds through the back half?

I think the best way to answer that is I think it's less about what has changed and really it's more about what's starting to work. We've been working on the thought leadership and all the surrounding sales efforts now for a number of years, right?

We've increased investments in this area even recently, as you've seen. We are getting more opportunities, right?

We're doing better in terms of closing those opportunities and getting more than our fair share of them, and have always indicated that with those larger clients who are our targets—we're not trying to get the big guys—it does take longer than we'd like sometimes to close those deals and get them in the door from a sales cycle standpoint. This is why doubling the business shows modest growth in 2026 with acceleration, right, expected as time goes on.

The other area that's helped in the growth so far this year is the expansion with existing customers, right, which is not only positive revenue, but obviously it's also a very positive testimonial towards our product. The fact that the first half of the year momentum is based on activity from the last two years, there's no reason for me to think that we don't continue to see momentum as we continue to accelerate that activity.

Thank you. The next question here.

Operating cash was negative $599,000 year-to-date, and cash is down $645,000. What in the receivables aging tells you this is collection timing rather than revenue quality?

I think that question's for me. Sure.

There are three things going on with receivables, and they are all pointing in the same direction. First, the receivables number is up $1.05 million from year-end.

That is all sitting in either the current or 1 to 60-day buckets, and those are invoices we've raised recently, not invoices that have been sitting around. Second, the older money is actually getting better.

Anything more than 60 days past due has come down 44% actually from about $420,000 at year-end to $237,000. If we had a revenue quality problem, that bucket would be growing, not shrinking, it's going the right way.

Our provision for expected credit losses came down too, from about $18,000 to $11,000. Third is the size of the move in days.

We went from 57 at year-end to roughly 62, which is a 5-day shift. It's a small number of larger accounts, and it's structural.

Underneath it all, before working capital changes, we generated $587,000 of cash year-to-date. The business generated cash at the operating level.

What moved is when it lands, and we expect it to normalize.

Great. Thank you.

Next question I see here: 83% of your revenue is in the USA, and it is where your growth came from. Do you feel any risk from the current trade war?

There's a trade war? Yeah.

Here's the good news, is that back in really what was the first term for President Trump, we could tell that American protectionism was likely to be on the horizon. We now have a structure that we are, in fact, an American company in America.

We do all of our business in the United States. We do it through an American corporation out of Delaware.

We have American employees. We pay American taxes.

We're doing effectively exactly what the American administration wants companies to do, and that is do our work in America and pay Americans and pay American taxes. I don't think we're at risk from that.

In addition, we're in the services business, which are traditionally not something that are subject to a tariff regime. I think that the fact that we're in something that's not typically on anyone's radar for a tariff does make sense, combined with the fact that we are a Canadian company, we operate in Canada, we are an American company, we operate in America, doing exactly what the administrations want us to do.

We don't treat that as a significant risk on our side.

Thank you. The next question: product development was up 20% and G&A down 7% as reported.

How much of each is actual spend versus the investment tax credits absence and foreign exchange swing?

Sure. I think that also is for me.

It's a good question because the reported percentages do go in opposite directions and neither one's really telling the right story. First, on product development, we reported a $93,000 increase, or 23%—sorry, 20%.

Of that, $85,000 is simply the absence of investment tax credits and government contributions. Actual spend was only up about $8,000.

Salaries are basically flat at 1.4% increase, and consulting's flat. It's really the absence of credits, not any new spending.

On the G&A side, we have sort of the opposite story. We reported being down 7% or $142,000, but it's really a currency swing.

We booked a $94,000 foreign exchange gain in the first in the second quarter, and we had a $229,000 loss last year this quarter last year. That swings about $322,000 favorably, and it's sitting in that line.

If you strip it out, the underlying G&A is up about $181,000 or 10.5%. The last two largest pieces there are roughly $78,000 of computer and AI investment and $98,000 of salaries as we added capacity.

If you put selling, product, and G&A together on a real-spend basis, we invested about $353,000 more than last year. Reported operating expenses excluding prior-year impairment are only up about $115,000, and the gap is really that $322,000 currency benefit, partially offset by the $85,000 worth of tax credits I just discussed.

It's misleading in both directions.

Thank you. As a reminder, if you'd like to ask a question, please use the Q&A function or button here in the Zoom room, and you can go ahead and type your question in.

I do see some more sitting in the Q&A. Next one is: merchandising delivered about $120,000 in the first half against a $1 million target.

What's actually contracted for Q3 versus pipeline, and what underpins holding the full-year number?

Unfortunately, I can't give you the actual number for Q3 because that would be selective disclosure, and the markets are open, we won't do that. I will, however, confirm that we have contracted revenues that are well ahead of what we did in the first half of the year.

If you just want to think about the signals here, I have said that we're maintaining our outlook for a million for the full year, which must give you some idea that there's a confidence level in some significant figures for Q3. Merchandising is one of those areas where you can sign one six-week engagement with a retailer and it could be worth $300,000.

We continue to get traction with being a vendor under consideration by people, and we do expect to start getting more and more opportunities to do those projects as time goes on. We're still holding the number.

Great. Thank you.

Next question is: your profits are already flat and margin dropped year-to-date. You mentioned that product mix was a part of it.

Can you expand and explain, including how merchandising was part of this and what the impact on the rest of the year will be if merchandising grows?

We'll stick to the merchandising theme. Merchandising was part of this, obviously.

As we stated, was the fact that we saw growth in our existing larger clients, right, who naturally have lower margins. When you grow your highest volume, lower-margin business, it's going to drop your overall margin, but it's still very positive and very positive signals to the business.

The reality of merchandising specifically is that gross margins are lower, but don't be fooled by focusing too much on that gross margin line, because merchandising has lower gross margins, but the programs have similar profitability as almost all of the costs of merchandising really are sitting inside the delivery itself, right? Merchandising is a hands-on situation in the literal sense.

Since almost all of the costs of merchandising are above in that gross margin costs, what happens in terms of when it grows is that it still has that profitability. I actually look forward to seeing revenue grow, I look forward to seeing the lower margins, and the higher profits that will happen as well.

Great. Thank you for that.

Let's see. The next one: you funded new sales capacity, merchandising, grocery, and AI investment without issuing a single share.

How are you self-funding this, and what should shareholders take from it?

The answer to that's pretty simple. The underlying business is healthy.

If we chose to focus strictly on profitability, we could put in a different P&L out. If you took a look at the last six years and include the pandemic, you'll see that we lost 70% of our revenue in Q2 of 2020, and we still never raised funds.

In fact, we were EBITDA positive throughout the entire pandemic. We are proven that we are very well-managed financially, right, and that we simply watch the cash the business can throw off.

We know that's what we have access to, and we ensure we always spend less than that. I would say that my dad used to tell me, if you spend less than you have, you'll be all right.

In our case, it means that we follow the principles and we don't have to issue shares.

Excellent. I do see one more question here.

It says: you have a number of studies, and your convenience study now covers nearly 3,000 site visits across 14 brands. Is that a large expense, and how does it convert into pipeline and signed contracts?

Look, short answer is yes, it's a relatively large expense for us. For some companies it might not be, but it's not a large expense in the scheme of what it meets.

When we do a study like that one, the one you referenced that I was just on stage in Los Angeles in early August presenting, we do have to essentially absorb the cost of goods sold for those visits, right? We still have to do all the visits, and we don't have anybody paying us for it, we absorb the cost of goods sold, and that's really the cost.

Looking at that study specifically, it's not that we just have the study, right, which we can put on our website, we send it to prospects, we use it on social media, right, we leverage the data. It gets us earned media, things like that, but it also gets us on the main stage of an industry-leading event, it gets us a front-page article in an industry-leading publication in that industry, right?

We get all of that, and the only cost we had was the cost of goods sold on the shops themselves and, of course, the internal team who pulls the analysis. I would also mention we have some studies, such as our QSR drive-through study, for example, which is another staple in the QSR industry, it's actually paid for by the brands who want the data, because that data's so valuable, brands pay us to get access to it, right, and so we still get all the same benefits from that one.

We get a stage presentation, we get the media presentation, we get to use all the data, we get coverage on that one half the time in The Wall Street Journal. We get lots of value for what we get.

It is an expense, but that's the investment in marketing. Relative to marketing dollars, it's very cost-effective spend, because it also helps to get that pipeline and sign contracts, right?

Because being the thought leader means people will take your calls. I would ask everybody who's listening to this, think about the fact that when someone calls you or an email comes in and you don't recognize that call or you don't know who that email is coming from, do you answer the phone?

Do you read the email, right? Most of us have a previewer, and the answer is no, right?

The old activities that used to work don't work anymore. By being a thought leader, by being out there, right, we have a leg up on our competition because people will take our calls.

Then when we actually get into a bid process, we also have an advantage because we are that industry leader. There's that old saying, you don't get fired for picking IBM.

These guys, if they want to make sure they've picked the right vendor, why would you not pick the vendor who everybody in the industry knows as the leader who does that type of data capture, right? They're not cheap, but they're very good spend, they're within our marketing budget, and I think they deliver a great outcome.

Great. Thank you, Cameron.

I see no further questions at this time. If an investor does have a question who might be listening on demand, please feel free to reach out to InTouch Insight or myself, James, at haydenir.com, and we'll get you answers to your questions.

Now I'll pass it back to Cameron for any closing remarks.

I would like to start by just apologizing. I noticed people had trouble logging in, we delayed the start a little bit for technical difficulties, and I appreciate everybody else that was not having technical difficulties sitting tight there in the beginning.

I hope that the takeaway you have from this call is that we are essentially doing what we said we were going to do, that all of the information we've presented in our financial MD&A is showing that we are on plan with our plan, and that we look forward to kind of heading into the future together. I appreciate everyone who's taking the time to listen to this.

That concludes our webinar. You may now disconnect your lines.

Have a great day.