VIQ Solutions Posts Fifth Straight Positive Adjusted EBITDA Quarter

Globe and Mail

2 days ago

VIQ Solutions Inc. ('VIQ' or 'the Company') (TSX: VQS), a global leader in AI-powered digital documentation, today announced financial results for the three and six months ended June 30, 2025. The Company reported continued margin expansion, its fifth consecutive quarter of positive Adjusted EBITDA, and secured its largest SaaS deployment to date, reinforcing its leadership in secure, evidence-based transcription for regulated sectors.
Second Quarter 2025 Financial Highlights
Revenue: $10.4 million, decrease of 10%, from the same period in the prior year, reflecting the timing of customer volumes and market conditions.
Gross Margin: 48%, up from 45.5% from the same period in the prior year, driven by automation and productivity gains.
Adjusted EBITDA: $1 million, increase of $0.2 million or 24% from the same period in the prior year, marking the fifth consecutive quarter of positive results.
Adjusted Operating Loss: $0.8 million, compared to $0.6 million from the same period in the prior year.
First Half 2025 Financial Highlights
Revenue: $20 million, decrease of 7%, from the same period in the prior year, reflecting the timing of customer volumes and market conditions.
Gross Margin: Nearly 50%, up from 44.9% from the same period in the prior year, driven by automation and productivity gains.
Adjusted EBITDA: $1.8 million, increase of $1.1 million or 164% from the same period in the prior year, reflecting sustained cost discipline and efficiency gains.
Adjusted Operating Loss: $1.5 million, an improvement of $0.9 million.
Strategic and Operational Highlights
Landmark SaaS Court Deployment: In July 2025, VIQ secured its largest SaaS engagement to date, implementing NetScribe® across 9 judicial districts and 22 counties in the U.S. Midwest. This milestone accelerates VIQ's transition to a higher-margin, subscription-based revenue model.
AI-Driven Workflow Automation: The deployment integrates NetScribe®, aiAssist™, Advanced Formatter, supporting internally produced transcription with scalability and optional add-ons including domain-specific language models, advanced post-processing rules, multilingual support, and automated summarization.
First Half 2025 Organic Bookings Momentum: VIQ secured $1.9 million of new bookings during first half of 2025, supporting ongoing gross margin expansion and strengthening long-term free cash flow prospects.
Management Commentary
'In the first half of 2025, VIQ delivered 164% growth in Adjusted EBITDA, expanded gross margins to nearly 50%, and achieved our fifth consecutive quarter of positive EBITDA,' said Alexie Edwards, CFO of VIQ Solutions. 'While we reported a net loss, this includes approximately $2.0 million in non-cash expenses, such as depreciation, amortization, and stock-based compensation, with $1.1 million recorded in Q2. These charges impact earnings per share but do not affect our cash flow.'
'With our largest SaaS deployment now in motion, increased bookings, and a clear focus on strengthening the balance sheet and reducing debt, we are expanding our financial flexibility to reinvest in growth. Our AI-driven platform and automation strategy continue to fuel stronger margins and sustained EBITDA gains, laying the foundation for long-term growth and value creation.'
A copy of the Company's unaudited financial statements and accompanying MD&A for the three and six months ended June 30, 2025 (collectively, the 'Financial Information') will be available under the Company's profile on SEDAR+ at www.sedarplus.ca.
Conference Call Details
VIQ will host a conference call and webcast to discuss Financial Information on August 14, 2025, at 11:00 a.m. (Eastern time). The call will consist of updates by Alexie Edwards, VIQ's Chief Financial Officer followed by a question-and-answer period.
Investors may access a live webcast of the call on the Company's website at www.viqsolutions.com/investors or by dialing 1-888-440-4052 (North America toll-free) or [phone] (international) to be connected to the call by an operator using conference ID number 4983233. Participants should dial at least 10 minutes before the call starts.
A replay of the webcast will be available on the Company's website through the same link approximately one hour after the conference call concludes.
For more information about VIQ, please visit viqsolutions.com.
About VIQ Solutions
VIQ Solutions is a global provider of secure, AI-driven, digital voice and video capture technology and transcription services. VIQ offers a seamless, comprehensive solution suite that delivers intelligent automation, enhanced with human review, to drive transformation in the way content is captured, secured, and repurposed into actionable information. The cyber-secure, AI technology and services platform are implemented in the most rigid security environments including criminal justice, legal, insurance, government, corporate finance, media, and transcription service provider markets, enabling them to improve the quality and accessibility of evidence, to easily identify predictive insights and to achieve digital transformation faster and at a lower cost.
Forward-looking Statements
Certain statements included in this press release constitute forward-looking statements or forward-looking information (collectively, 'forward-looking statements') under applicable securities legislation. Such forward-looking statements or information are provided for the purpose of providing information about management's current expectations and plans relating to the future. Readers are cautioned that reliance on such information may not be appropriate for other purposes.
Forward-looking statements typically contain statements with words such as 'anticipate', 'believe', 'expect', 'plan', 'intend', 'estimate', 'propose', 'project' or similar words, including negatives thereof, suggesting future outcomes or that certain events or conditions 'may' or 'will' occur. These statements are only predictions. Forward-looking statements in this press release include but are not limited to statements with respect to the Company's ability to accelerate automation, optimize costs, and improve scalability in the future, expected margin improvement, the Company's focus and its priorities, the filing of the Financial Information on SEDAR+ and the conference call to discuss the Company's financial results.
Forward-looking statements are based on several factors and assumptions which have been used to develop such statements, but which may prove to be incorrect. Although VIQ believes that the expectations reflected in such forward-looking statements are reasonable, undue reliance should not be placed on forward-looking statements because VIQ can give no assurance that such expectations will prove to be correct. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding, among other things, recent initiatives, cost savings from workforce and product optimization, cost reductions from the Company's workflow solutions and that sales and prospects may increase revenue. Readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions that have been used.
Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that while considered reasonable by the Company as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions, and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking statements, including but not limited to the factors described in greater detail in the 'Risk Factors' section of the Company's annual information form and in the Company's other materials filed with the Canadian securities regulatory authorities.
These factors are not intended to represent a complete list of the factors that could affect the Company; however, these factors should be considered carefully. Such estimates and assumptions may prove to be incorrect or overstated. The forward-looking statements contained in this press release are made as of the date of this press release and the Company expressly disclaims any obligations to update or alter such statements, or the factors or assumptions underlying them, whether as a result of new information, future events or otherwise, except as required by law.
Non-IFRS Measures
The Company prepares its financial statements in accordance with IFRS. Non-IFRS measures are provided by management to provide additional insight into our performance and financial condition. VIQ believes non-IFRS measures are an important part of the financial reporting process and are useful in communicating information that complements and supplements the consolidated financial statements.
Adjusted EBITDA and adjusted operating loss are not measures recognized by IFRS and do not have a standardized meanings prescribed by IFRS. Therefore, Adjusted EBITDA and adjusted operating loss may not be comparable to similar measures presented by other issuers. Investors are cautioned that Adjusted EBITDA and adjusted operating loss should not be construed as alternatives to net income (loss) as determined in accordance with IFRS. For a reconciliation of net income (loss) to Adjusted EBITDA and adjusted operating loss please see the Company's MD&A for three and six months ended June 30, 2025.
To evaluate the Company's operating performance as a complement to results provided in accordance with IFRS, the term 'Adjusted EBITDA' refers to net income (loss) before adjusting earnings for stock-based compensation, depreciation, amortization, interest expense, accretion, and other financing expense, (gain) loss on revaluation of options, (gain) loss on revaluation of restricted share units, gain (loss) on revaluation of derivative warrant liability, restructuring costs, strategic review costs, loss on modification of debt, impairment of property and equipment, impairment of goodwill and intangibles, other expense (income), foreign exchange (gain) loss, current and deferred income tax expense. We believe that the items excluded from Adjusted EBITDA are not connected to and do not represent the operating performance of the Company.
We believe that Adjusted EBITDA is useful supplemental information as it provides an indication of the results generated by the Company's main business activities prior to taking into consideration how those activities are financed and taxed as well as expenses related to stock-based compensation, depreciation, amortization, impairment of goodwill and intangibles, loss on modification or extinguishment of debt, other expense (income), and foreign exchange (gain) loss. Accordingly, we believe that this measure may also be useful to investors in enhancing their understanding of the Company's operating performance.
The term 'adjusted operating loss' refers to net income (loss) excluding the impact of strategic review costs. Management believes it is appropriate to adjust for this item because strategic review costs do not relate to operating activities of the Company and is useful supplemental information as it provides an indication of the results generated by the Company's main business activities. The presentation of this measure enables investors and analysts to better understand the underlying performance of our business activities.
We calculate 'bookings' for a given period as the estimated contract value (for services tied to volume) of our recurring client contracts entered into during the period from (i) new clients and (ii) net upgrades by existing clients within the same workload, plus the actual (not annualized) estimated value of professional services consulting, advisory or project-based orders received, software licenses, subscriptions, SaaS, and hardware during the period.
Trademarks
This press release includes trademarks, such as 'NetScribe', which are protected under applicable intellectual property laws and are the property of VIQ. Solely for convenience, our trademarks referred to in this press release may appear without the ® or TM symbol, but such references are not intended to indicate, in any way, that we will not assert our rights to these trademarks, trade names, and services marks to the fullest extent under applicable law. Trademarks that may be used in this press release, other than those that belong to VIQ, are the property of their respective owners.
June 30, 2025
December 31, 2024
Assets
Current assets
Cash
$
1,117,164
$
1,573,341
Trade and other receivables, net of allowance for doubtful accounts
4,422,766
3,768,699
Inventories
25,914
23,508
Prepaid expenses and other deposits
890,576
1,183,496
Non-current assets
6,456,420
6,549,044
Restricted cash
177,560
169,097
Property and equipment, net
541,883
654,223
Right-of-use assets, net
349,610
153,794
Intangible assets
5,183,967
5,661,614
Goodwill
11,929,976
11,628,213
Total assets
$
24,639,416
$
24,815,985
Liabilities
Current liabilities
Trade and other payables and accrued liabilities
$
6,846,250
$
5,673,346
Income taxes payable
61,890
29,765
Share-based payment liability
643
19,366
Derivative warrant liability
38,019
35,238
Current portion of long-term debt
17,099,730
15,988,401
Current portion of lease obligations
206,345
204,802
Contract liabilities
1,475,909
1,635,041
Non-current liabilities
25,728,786
23,585,959
Long-term lease obligations
167,884
–
Other long-term liabilities
924,371
949,622
Total liabilities
26,821,041
24,535,581
Shareholders' equity
Capital stock
77,665,053
77,593,993
Contributed surplus
9,364,786
9,145,162
Accumulated other comprehensive loss
(1,341,494
)
(1,356,521
)
Deficit
(87,869,970
)
(85,102,230
)
Total shareholders' equity
(2,181,625
)
280,404
Total liabilities and shareholders' equity
$
24,639,416
$
24,815,985
VIQ Solutions Inc.
Interim Condensed Consolidated Statements of Loss and Comprehensive Loss
(Expressed in US dollars, unaudited)
Three months ended June 30,
Six months ended June 30,
2025
2024
2025
2024
Revenue
$
10,445,488
$
11,575,614
$
20,024,513
$
21,497,287
Cost of sales
5,436,220
6,312,797
10,040,105
11,841,912
Gross profit
5,009,268
5,262,817
9,984,408
9,655,375
Expenses
Selling and administrative expenses
3,866,110
4,328,687
7,676,752
8,639,461
Research and development expenses
179,957
155,416
320,476
320,526
Stock-based compensation
292,682
111,283
291,865
139,816
Gain on revaluation of RSUs
(21,482
)
(18,534
)
(19,553
)
(47,311
)
Loss (gain) on revaluation of the derivative Warrant liability
8,260
7,479
1,238
(49,686
)
Foreign exchange gain
(354,295
)
(590,719
)
(438,327
)
(487,886
)
Depreciation
175,864
194,237
340,547
389,221
Amortization
658,581
813,889
1,366,158
1,620,346
Interest expense
439,704
405,965
928,326
794,889
Accretion and other financing costs
456,029
425,216
875,059
752,094
Restructuring costs (recovery)
37,349
5,874
36,066
(3,820
)
Strategic review costs
119,124
–
1,294,726
–
Other income
(1,911
)
(10,208
)
(8,118
)
(21,413
)
Total expenses
5,855,972
5,828,585
12,665,215
12,046,237
Current income tax expense
52,654
6,063
86,933
21,107
Income tax expense
52,654
6,063
86,933
21,107
Net loss for the period
$
(899,358
)
$
(571,831
)
$
(2,767,740
)
$
(2,411,969
)
Exchange (loss) gain on translation of foreign operations
16,115
(483,076
)
15,027
(795,107
)
Comprehensive loss for the period
$
(883,243
)
$
(1,054,907
)
$
(2,752,713
)
$
(3,207,076
)
Net loss per share
Basic
(0.02
)
(0.01
)
(0.05
)
(0.05
)
Diluted
(0.02
)
(0.01
)
(0.05
)
(0.05
)
Weighted average number of common shares outstanding – basic
52,563,142
51,348,578
52,449,214
48,065,488
Weighted average number of common shares outstanding – diluted
52,563,142
51,348,578
52,449,214
48,065,488
The following is a reconciliation of Net Loss to Adjusted EBITDA, the most directly comparable IFRS measure for the three and six months ended June 30, 2025, and 2024:
Three months ended
June 30
Six months
June 30
(Unaudited)
2025
2024
2025
2024
Net Loss
(899,358)
(571,831)
(2,767,740)
(2,411,969)
Add:
Depreciation
175,864
194,237
340,547
389,221
Amortization
658,581
813,889
1,366,158
1,620,346
Interest expense
439,704
405,965
928,326
794,889
Current income tax (recovery) expense
52,654
6,063
86,933
21,107
EBITDA
427,445
848,323
(45,776)
413,594
Accretion and other financing costs
456,029
425,216
875,059
752,094
Gain on revaluation of RSUs
(21,482)
(18,534)
(19,553)
(47,311)
Loss (Gain) on revaluation of the derivative warrant liability
8,260
7,479
1,238
(49,686)
Restructuring costs
37,349
5,874
36,066
(3,820)
Strategic Review Costs
119,123
-
1,294,726
-
Other income
(1,911)
(10,208)
(159,978)
(21,413)
Stock-based compensation
292,682
111,283
291,865
139,816
Foreign exchange gain
(354,295)
(590,719)
(438,327)
(487,886)
Adjusted EBITDA
963,201
778,714
1,835,320
695,388
The following is a reconciliation of Net Loss to Adjusted operating loss, the most directly comparable IFRS measure for the three and six months ended June 30, 2025, and 2024: