$75.6M Total liquidity, includes $19.6M in unrestricted cash, providing strategic flexibility
$3.5M Operating cash flow, an increase of 20% year-over-year
Direct advertising up 7% on premium demand for our enthusiast audience
Strategic partnership with AltaML to accelerate agentic AI capabilities and drive operating leverage
Unless otherwise stated, all amounts are in US dollars.
TORONTO–(BUSINESS WIRE)–$FORA #VerticalScope–VerticalScope Holdings Inc. (“VerticalScope” or the “Company”) (TSX: FORA; OTCQX: VFORF), a technology company that has built and operates a cloud-based digital platform for online enthusiast communities, today announced financial results for the first quarter ended March 31, 2026 (“Q1” or “the quarter”).
“Q1 showed encouraging traction in the areas of the business we are actively building,” said Chris Goodridge, CEO of VerticalScope. “The quality of our audience continues to shine through, driving growth in direct advertising as brands seek out the depth and authenticity that our Fora communities offer. Our newest AI-driven commerce experience is surfacing more relevant product matches within community discussions, creating a scalable new growth lever for the business.”
“We are also pushing hard to become an AI-native company, moving quickly to apply AI in a meaningful way across our platform and operations,” added Chris Goodridge. “We see a near-term future where agentic tools are amplifying the output of every team. To accelerate this push, we recently launched a partnership with AltaML, a Canadian-based AI leader with deep expertise in deploying agentic workflows across work environments and industries. We expect to drive meaningful efficiencies and create further opportunities for growth as this work takes shape in the quarters ahead.”
Financial Highlights for the Three Months Ended March 31, 2026 (“Q1 2026”). All comparatives, unless otherwise noted, are versus the same period in the prior year.
- Revenue was $11.6M, reflecting the anticipated ‘lapping’ of peak pre-algorithm traffic volumes in early 2025. A reduction in programmatic impressions was partially offset by 7% year-over-year growth in the direct advertising channel, signaling the premium value of our contextually relevant enthusiast audience.
- Net loss was $3.1M, or ($0.14) per share, compared to a net loss of $2.4M in the prior year. The result was primarily driven by $5.1M in non-cash depreciation and amortization; excluding these charges, underlying operations remained profitable and cash-flow positive, as evidenced by the $3.5M in cash flow from operating activities.
- Liquidity remained strong with $75.6M in total available liquidity, including $19.6M in unrestricted cash. Disciplined working capital management drove $3.5M in cash flow from operating activities, an increase over the prior year, with an 86% Free Cash Flow conversion rate.
- Adjusted EBITDA was $2.3M, representing a 20% Adjusted EBITDA Margin. While impacted by seasonal lows and programmatic volume declines, we have executed on post-quarter cost optimizations that will be reinvested into AI and agentic workflows designed to drive incremental operating leverage.
“We are pleased with the financial profile we delivered in Q1. Operating cash flow grew 20% year-over-year to $3.5 million, and we converted 86% of Adjusted EBITDA to Free Cash Flow,” said Vince Bellissimo, CFO of VerticalScope. “In April, we repaid $12 million on our revolving credit facility, continuing to optimize our capital structure. AI and agentic workflows across our business remain our highest-priority area of investment, where we see meaningful operating leverage potential. Our balance sheet provides the flexibility we need to fund that work.”
Selected Business Performance Information
|
(Unaudited) |
Three Months Ended March 31, |
|
|
(in millions) |
2026 |
2025 |
|
Revenue |
$11.6 |
$13.6 |
|
Net loss |
($3.1) |
($2.4) |
|
Adjusted EBITDA |
$2.3 |
$3.6 |
|
Cash flow from operations |
$3.5 |
$3.0 |
|
Free Cash Flow |
$2.0 |
$3.1 |
|
|
|
|
|
Adjusted EBITDA Margin |
20% |
27% |
|
Free Cash Flow Conversion |
86% |
86% |
Earnings Conference Call and Webcast
Management will host a conference call and webcast to discuss the Company’s financial results at 8 a.m. ET on Wednesday, May 13, 2026.
Live Call Registration and Webcast:
https://www.netroadshow.com/events/login/1PeTHmohRJkZ2jwytWHCSBLZ1zSRhG05VkeJR
Joining Live by Telephone:
Canada: 1 833 950 0062
United States: 1 833 470 1428
Participant Access code: 294737
If you are unable to join live, an archived recording of the webcast will be available at: https://investors.verticalscope.com/.
About VerticalScope Holdings Inc.
Founded in 1999 and headquartered in Toronto, Ontario, VerticalScope is a technology company that has built and operates a cloud-based digital platform for online enthusiast communities in high consumer spending categories. VerticalScope’s mission is to enable people with common interests to connect, explore their passions, and share knowledge about the things they love. Through targeted acquisitions and development, VerticalScope has built a portfolio of over 1,200 online communities and approximately 90 million monthly active users.
Forward-Looking Statements
This news release contains forward-looking information within the meaning of applicable securities legislation that reflects the Company’s current expectations regarding future events. When used in this news release, words such as “should”, “could”, “intended”, “expect”, “plan” or “believe” and similar expressions indicate forward-looking statements. Forward-looking information, including the Company’s plans for organic growth, deployment of capital, investments in our platform, the growth of revenue and MAU, information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, plans and objectives, is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company’s control.
Forward-looking information in this release includes statements about the Company’s positioning and outlook for 2026, expected stabilization and growth in MAU and direct advertising bookings, the expected impact of post-quarter cost actions, the Company’s ability to apply AI and agentic workflows across its platform and operations to improve monetization and drive operating leverage, the expected impact of the Company’s partnership with AltaML, the Company’s ability to scale new AI-enabled commerce experiences and other new products and achieve projected revenue or contribution levels, the Company’s capital allocation priorities (including debt repayment and balance sheet flexibility), the Company’s ability to pursue selective M&A opportunities, and the performance of the Company’s business model. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurances can be given that actual results will be consistent with these forward-looking statements. Such risks and uncertainties include, but are not limited to, the implementation and effectiveness of the Company’s capital allocation strategy, the availability of high-quality M&A opportunities, dependence on search algorithms and third-party traffic sources, the impact of artificial intelligence on search behavior, content discovery patterns and user traffic, the Company’s ability to adapt its platform and monetization strategies to AI-mediated discovery, opportunities to monetize content through data licensing arrangements, potential disruption from artificial intelligence technologies, the Company’s ability to realize the anticipated benefits of its partnership with AltaML and its broader AI initiatives, including operating leverage and cost savings, the Company’s ability to scale new products and achieve projected revenue or EBITDA contribution levels, evolving privacy and data regulations, macroeconomic conditions affecting advertiser spending, the Company’s ability to grow its direct user base, the Company’s ability to protect and enforce its intellectual property rights, including against unauthorized use of its content by artificial intelligence companies and other third parties, the outcome, costs, timing and impact of any current or future litigation, regulatory proceedings, or enforcement actions, including those relating to the use of the Company’s content by third parties, and the factors discussed under “Risk Factors” in the Company’s Annual Information Form dated March 31, 2026, which is available on the Company’s profile on SEDAR Plus at https://sedarplus.ca. Actual results could differ materially from those projected herein. VerticalScope does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.
Non-IFRS Measures
This news release references certain non-IFRS measures, including Adjusted EBITDA and Free Cash Flow, and Free Cash Flow Conversion as described below. This news release also makes reference to MAU, which is an operating metric used in our industry. These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.
The Company uses non-IFRS measures including:
“EBITDA” is calculated as net income (loss) excluding interest, income tax expense (recovery), and depreciation and amortization.
“Adjusted EBITDA” is calculated as EBITDA adjusted for share-based compensation, unrealized gains or losses from changes in fair value of derivative financial instruments, severance, other income, gain or loss on sale of assets, foreign exchange loss (gain), realized and unrealized other loss (gain) and other charges that include direct and incremental business acquisition related costs.
“Adjusted EBITDA Margin” measures Adjusted EBITDA as a percentage of revenue.
“Free Cash Flow” means Adjusted EBITDA less capital expenditures and income taxes paid during the period.
“Free Cash Flow Conversion” is equal to Free Cash Flow for the period divided by Adjusted EBITDA for the period.
“Monthly Active Users” (“MAU”) is defined as the number of individuals who have visited our communities within a calendar month, based on data as measured by Google Analytics. The Company excludes bot traffic, automated scrapers, and other non-human activity. To calculate average MAU in a given period, we sum the total MAU for each month in that period, divided by the number of months in that period.
SOURCE VerticalScope Holdings Inc.
Related Links
http://www.verticalscope.com
The following table sets forth a reconciliation of Adjusted EBITDA and Free Cash Flow to net loss:
|
(Unaudited) |
Three Months Ended March 31, |
||
|
(in thousands of US dollars) |
2026 |
2025 |
|
|
Net loss |
($3,120) |
($2,416) |
|
|
Net interest and financing expense |
656 |
748 |
|
|
Income tax expense |
(1,089) |
(454) |
|
|
Depreciation and amortization |
5,079 |
4,424 |
|
|
EBITDA |
1,527 |
2,302 |
|
|
Share-based compensation |
459 |
1,252 |
|
|
Unrealized loss (gain) from changes in derivative fair value of financial instruments |
27 |
(50) |
|
|
Severance (1) |
41 |
— |
|
|
Other income |
(19) |
— |
|
|
Gain on sale of assets |
(1) |
— |
|
|
Foreign exchange loss |
23 |
56 |
|
|
Realized other loss |
— |
68 |
|
|
Unrealized other loss |
— |
26 |
|
|
Other charges (2) |
280 |
(12) |
|
|
Adjusted EBITDA |
2,336 |
3,641 |
|
|
Less capital expenditures |
(235) |
(446) |
|
|
Income taxes paid |
(89) |
(75) |
|
|
Free Cash Flow |
$2,012 |
$3,120 |
|
|
(1) |
|
Severance is included in wages and consulting on the condensed consolidated interim statements of net loss. |
|
(2) |
|
Other charges are included in wages and consulting and general and administrative on the condensed consolidated interim statements of net loss. For the three months ended March 31, 2026 and March 31, 2025, these charges include direct and incremental business acquisition related costs and non-recurring legal related costs. |
|
VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Financial Position (In US dollars) (Unaudited) |
|||
|
|
March 31, |
December 31, |
|
|
|
2026 |
2025 |
|
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash |
$19,586,318 |
$16,373,449 |
|
|
Restricted cash |
163,980 |
164,496 |
|
|
Trade and other receivables |
12,768,610 |
15,122,763 |
|
|
Lease receivable |
128,525 |
126,668 |
|
|
Income taxes receivable |
606,970 |
349,547 |
|
|
Prepaid expenses |
842,785 |
574,390 |
|
|
Derivative instruments |
— |
10,729 |
|
|
|
34,097,188 |
32,722,042 |
|
|
|
|
|
|
|
Property and equipment |
251,920 |
282,566 |
|
|
Right-of-use asset |
511,233 |
535,990 |
|
|
Intangible assets |
21,101,303 |
25,846,567 |
|
|
Goodwill |
54,908,063 |
54,908,063 |
|
|
Other assets |
96,060 |
73,942 |
|
|
Deferred tax asset |
19,068,126 |
17,871,911 |
|
|
Lease receivable |
67,124 |
99,960 |
|
|
|
|
|
|
|
Total assets |
$130,101,017 |
$132,341,041 |
|
|
|
|
|
|
|
Liabilities and Shareholders’ Equity |
|||
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable and accrued liabilities |
$10,344,780 |
$10,086,039 |
|
|
Income taxes payable |
586,798 |
318,650 |
|
|
Derivative instruments |
15,988 |
— |
|
|
Deferred revenue |
1,005,219 |
1,011,933 |
|
|
Current portion of long-term debt |
577,853 |
619,313 |
|
|
Lease liability |
480,490 |
448,982 |
|
|
|
13,011,128 |
12,484,917 |
|
|
|
|
|
|
|
Long-term debt |
44,000,000 |
44,000,000 |
|
|
Lease liability |
449,591 |
555,399 |
|
|
Other long-term liabilities |
26,613 |
26,612 |
|
|
Total liabilities |
57,487,332 |
57,066,928 |
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
Share capital |
159,769,751 |
159,382,348 |
|
|
Contributed surplus |
23,391,431 |
23,319,659 |
|
|
Other comprehensive loss |
(145,494) |
(145,494) |
|
|
Deficit |
(110,402,003) |
(107,282,400) |
|
|
|
72,613,685 |
75,274,113 |
|
|
Total liabilities and shareholders’ equity |
$130,101,017 |
$132,341,041 |
|
|
VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Net Loss (In US dollars) (Unaudited) |
||||
|
|
|
Three Months Ended March 31, |
||
|
|
|
2026 |
2025 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$11,560,546 |
$13,565,517 |
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
Wages and consulting |
|
6,659,202 |
7,162,204 |
|
|
Share-based compensation |
|
459,175 |
1,251,993 |
|
|
Platform and technology |
|
1,710,748 |
1,639,598 |
|
|
General and administrative |
|
1,201,920 |
1,060,465 |
|
|
Depreciation and amortization |
|
5,079,149 |
4,423,575 |
|
|
|
|
15,110,194 |
15,537,835 |
|
|
|
|
|
|
|
|
Operating loss |
|
(3,549,648) |
(1,972,318) |
|
|
|
|
|
|
|
|
Other expenses (income): |
|
|
|
|
|
Other income |
|
(19,159) |
— |
|
|
Gain on sale of assets |
|
(632) |
(340) |
|
|
Net interest and financing expense |
|
655,945 |
747,818 |
|
|
Foreign exchange loss |
|
22,733 |
55,655 |
|
|
Realized other loss |
|
— |
67,577 |
|
|
Unrealized other loss |
|
— |
26,453 |
|
|
|
|
658,887 |
897,163 |
|
|
|
|
|
|
|
|
Loss before income taxes |
|
(4,208,535) |
(2,869,481) |
|
|
|
|
|
|
|
|
Income tax expense (recovery) |
|
|
|
|
|
Current |
|
107,283 |
411,484 |
|
|
Deferred |
|
(1,196,215) |
(865,456) |
|
|
|
|
(1,088,932) |
(453,972) |
|
|
|
|
|
|
|
|
Net loss |
|
($3,119,603) |
($2,415,509) |
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
Loss per share basic and diluted |
|
($0.14) |
($0.11) |
|
|
Weighted average shares outstanding basic and diluted |
|
21,674,252 |
21,696,890 |
|
|
VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Cash Flows (In US dollars) (Unaudited) |
||||
|
|
|
Three Months Ended March 31, |
||
|
|
|
2026 |
2025 |
|
|
|
|
|
|
|
|
Cash provided by (used in): |
|
|
|
|
|
|
|
|
|
|
|
Operating activities: |
|
|
|
|
|
Net loss |
|
($3,119,603) |
($2,415,509) |
|
|
Items not involving cash: |
|
|
|
|
|
Depreciation and amortization |
|
5,079,149 |
4,423,575 |
|
|
Net interest and financing expense |
|
655,945 |
747,818 |
|
|
Gain on sale of assets |
|
(632) |
(340) |
|
|
Unrealized loss (gain) in derivative instruments |
|
26,717 |
(49,651) |
|
|
Unrealized other loss |
|
— |
26,453 |
|
|
Income tax expense (recovery) |
|
(1,088,932) |
(453,972) |
|
|
Other income |
|
(19,159) |
— |
|
|
Share-based compensation |
|
459,175 |
1,251,993 |
|
|
|
|
1,992,660 |
3,530,367 |
|
|
Change in non-cash operating assets and liabilities |
|
2,347,164 |
235,553 |
|
|
Interest paid |
|
(703,765) |
(724,547) |
|
|
Income taxes paid |
|
(89,456) |
(75,030) |
|
|
Net cash provided by operating activities |
|
3,546,603 |
2,966,343 |
|
|
|
|
|
|
|
|
Financing activities: |
|
|
|
|
|
Proceeds from issuance of revolving loan |
|
— |
3,000,000 |
|
|
Lease payments |
|
(135,239) |
(323,279) |
|
|
Proceeds from sublease |
|
33,970 |
140,940 |
|
|
Net cash provided by (used in) financing activities |
|
(101,269) |
2,817,661 |
|
|
|
|
|
|
|
|
Investing activities: |
|
|
|
|
|
Additions to property and equipment and intangible assets |
|
(234,762) |
(445,942) |
|
|
Proceeds from sale of assets |
|
1,781 |
340 |
|
|
Acquisitions |
|
— |
(5,456,402) |
|
|
Net cash used in investing activities |
|
(232,981) |
(5,902,004) |
|
|
|
|
|
|
|
|
Increase (decrease) in cash |
|
3,212,353 |
(118,000) |
|
|
|
|
|
|
|
|
Cash, beginning of period |
|
16,373,449 |
5,189,315 |
|
|
|
|
|
|
|
|
Change in restricted cash balances |
|
516 |
3,329 |
|
|
Effect of movement of exchange rates on cash and restricted cash held |
|
— |
(60,351) |
|
|
|
|
|
|
|
|
Cash, end of period |
|
$19,586,318 |
$5,014,293 |
|
Contacts
For further information
Investor and media inquiries:
VerticalScope — Vincenzo Bellissimo, Chief Financial Officer, Tel: 416-341-7166, [email protected]
