Ian Bremmer: The death of the internet as a democratizing force a harbinger of the death of democracy
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Two decades ago I sketched the 'J-curve,' which links a country's openness to its stability: mature democracies are stable because they are open, consolidated autocracies are stable because they are closed and countries stuck in the messy middle tend to crack under stress.
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But this relationship isn't static; it's shaped by technology. Back then, the world was riding a decentralizing telecommunications and internet revolution that connected people everywhere and armed them with more information than they'd ever had access to before, tipping the scales toward citizens and open political systems. From the fall of the Berlin Wall and the Soviet Union to the colour revolutions in eastern Europe and the Arab Spring in the Middle East, global liberalization appeared inexorable.
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That momentum has since slammed into reverse. The decentralizing information and communications technology revolution gave way to a centralizing data revolution built on network effects, digital surveillance and algorithmic nudging. Instead of diffusing power, this technology concentrated it, handing the small number of actors who control the largest datasets — whether governments or technology companies — the ability to shape what billions see, do and believe.
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As citizens were turned from principal agents to objects of technological filters and data collection, closed systems gained ground. And so, the gains made by the colour revolutions and the Arab Spring were reversed. Hungary and Turkey have muzzled their free press and politicized their independent judiciaries. Chinese President Xi Jinping has consolidated power and reversed two decades of Chinese economic opening. Most dramatically, the United States has turned from the world's leading exporter of democracy — however inconsistently and hypocritically — to the leading exporter of the tools that undermine it.
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The explosion of artificial intelligence capabilities is about to supercharge these trends. Models trained on our individual private data will soon 'know' us better than we know ourselves, programming humans faster than we can program them and transferring even more power to the handful of actors who control the data and algorithms.
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Globe and Mail
37 minutes ago
- Globe and Mail
These 3 Companies Shattered Quarterly Records
The 2025 Q2 earnings cycle continues to wind down, with the vast majority of S&P 500 companies already delivering results. The period has been one of resilience, with overall growth remaining strong alongside positive revisions for the upcoming Q3 cycle. But more specifically, this cycle, several companies – Apple AAPL, Eaton ETN, and DoorDash DASH – posted quarterly records in one way or another, with each also seeing favorable price action post-earnings. Let's take a closer look at what drove the positivity. Eaton Sees Big Backlog Eaton is an intelligent power management company that provides products for the data center, utility, industrial, commercial, machine building, residential, aerospace, and mobility markets. Shares have been a big beneficiary of the AI frenzy thanks to the data center exposure, up 25% over the past year and outperforming the S&P 500. Accelerating orders and continued backlog growth contributed to its record-breaking quarter, with adjusted EPS of $2.95 reflecting a Q2 record and up 8% year-over-year. Further adding to the positivity, organic sales grew 8% from the year-ago period, with segment margins of 23.9% also reflecting a Q2 record. Below is a chart illustrating the company's sales on a quarterly basis. ETN shares also reflect a great opportunity for those with an appetite for income, sporting a 7.5% five-year annualized dividend growth rate. Impressively, the company has paid a dividend on its shares every year since 1923. Below is a chart illustrating its dividends paid on an annual basis. Please note that the final value is calculated on a trailing twelve-month basis, as ETN's current fiscal-year is still ongoing. Apple Remains Stellar Beloved tech titan Apple reported notably strong results, posting quarterly records for sales, iPhone revenue, and EPS. And for the cherry on top, Services revenue of $27.4 billion not only reflected a quarterly record but an all-time one as well. Below is a chart illustrating the company's Services revenue on a quarterly basis. Apple's installed base of active devices also reached a new all-time record, further adding to the positivity. The tech titan continued to generate serious cash throughout the period, with free cash flow totaling a sizable $24.4 billion. The company's rock-solid operations and fundamentals have allowed it to command a higher multiple over the years, with shares currently trading at a 29.3X forward 12-month earnings multiple, in line with the five-year median and reflecting a 30% premium relative to the S&P 500. EPS is currently forecasted to climb 8.6% in its current fiscal year and 6.6% in the next. DoorDash Orders Surge DoorDash shares have been red-hot in 2025, gaining more than 50% and widely outperforming relative to the S&P 500. Its latest set of quarterly results helped confirm the bullish trend, with DASH posting records for Total Orders, Marketplace GOV, and revenue. The company is clearly enjoying a growth surge, with Total Orders up 20% year-over-year alongside a 25% boost in sales. Adjusted EBITDA also saw a strong 52% move higher to $655 million, further solidifying the results. Below is a chart illustrating DASH's sales on a quarterly basis. But interestingly, the company also revealed some read-through into the consumer, stating – 'High levels of consumer engagement in the U.S. were evident across many metrics and widespread throughout our consumer cohorts. In the U.S., the size of our new consumer cohorts increased on a Y/Y basis in each of April, May, and June, with initial engagement levels that were consistent with the relevant year-ago period.' Further reinforced by the results, consumers continue to spend heavily on delivery, reflecting a positive takeaway about the broader economy overall. Bottom Line The 2025 Q2 earnings season is winding down, with the period largely positive and resilient. And throughout the period, several companies – Apple AAPL, Eaton ETN, and DoorDash DASH – posted quarterly records in one way or another. Research Chief Names "Single Best Pick to Double" From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all. This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months. Free: See Our Top Stock And 4 Runners Up Apple Inc. (AAPL): Free Stock Analysis Report Eaton Corporation, PLC (ETN): Free Stock Analysis Report DoorDash, Inc. (DASH): Free Stock Analysis Report
Globe and Mail
an hour ago
- Globe and Mail
VerticalScope Announces Second Quarter 2025 Financial Results
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 second quarter ended June 30, 2025 ("Q2" or "the quarter"). 'In Q2, our platform served 90 million MAUs and generated $14.5 million in revenue,' said Chris Goodridge, CEO of VerticalScope. 'The real story this quarter is the speed at which we've reshaped our teams and sharpened our focus to position the Company for long-term growth. Our profitable model and strong cash generation give us the firepower to invest decisively in high-impact initiatives, from expanding direct traffic to accelerating AI-powered innovation.' Mr. Goodridge added, 'The way people find and consume information is changing faster than ever, and that's creating new opportunities for platforms like ours. VerticalScope's communities deliver exceptional depth of expertise and engagement. As AI reshapes the digital landscape, we're focused on scaling what makes us unique — building stronger relationships with our large base of direct users, broadening how we monetize our audiences, and deploying AI to enhance user experience. We have the assets, the talent, and the strategy to capture meaningful growth in the years ahead.' Financial Highlights for the Three Months Ended June 30, 2025 Revenue decreased 13% to $14.5M, primarily due to a decline in MAUs, which impacted programmatic advertising. This follows a period of record-high MAU in the prior year. ARPU increased 17%, supported by a 41% year-over-year increase in e-commerce revenue. Adjusted EBITDA was $4.3M, down 39%, representing a 30% margin (compared to 42% in Q2 2024), reflecting lower revenue and increased investments in AI and traffic diversification. Operating Cash Flow increased 4% to $6.4M, inclusive of non-cash working capital changes from acquisitions. Free Cash Flow totaled $3.7M, reflecting 87% conversion of Adjusted EBITDA. Available Liquidity was $64.1M, comprised of $8.1M in unrestricted cash and $56.0M of undrawn revolver capacity. Net loss was $1.8M, compared to net income of $0.4M in the prior year, primarily due to lower revenue and $1.6M in one-time personnel and acquisition costs, partially offset by income tax recovery. 'Q2 demonstrated our ability to execute effectively while delivering a healthy Free Cash Flow conversion of 87% and a 30% Adjusted EBITDA margin,' said Vince Bellissimo, CFO of VerticalScope. 'Supported by a strong balance sheet and an efficient operating model, we continue to invest strategically in key initiatives that drive long-term value creation for our shareholders as we move into the second half of the year.' Earnings Conference Call and Webcast Management will host a conference call and webcast to discuss the Company's financial results at 7 a.m. ET on Wednesday, August 13, 2025. Live Call Registration and Webcast: Joining Live by Telephone: Canada: 1 833 950 0062 United States: 1 833 470 1428 Participant Access code: 628663 If you are unable to join live, an archived recording of the webcast will be available at: 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 100 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. 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, potential disruption from artificial intelligence technologies, and the factors discussed under "Risk Factors" in the Company's Annual Information Form dated March 31, 2025, which is available on the Company's profile on SEDAR Plus at 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 press release references certain non-IFRS measures, including Adjusted EBITDA and Free Cash Flow, and Free Cash Flow Conversion as described below. This press 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, share performance related bonuses, unrealized gains or losses from changes in fair value of derivative financial instruments, severance, adjustments to contingent consideration liabilities measured at fair value through profit and loss, gain or loss on sale of assets, gain or loss on sale of investments, 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. 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 The following table sets forth a reconciliation of Adjusted EBITDA and Free Cash Flow to net income (loss): (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (in thousands of US dollars) 2025 2024 2025 2024 Net income (loss) ($1,792) $423 ($4,208) ($561) Net interest and financing expense 816 1,075 1,563 2,238 Income tax expense (recovery) (935) 556 (1,389) 431 Depreciation and amortization 4,830 4,501 9,254 9,066 EBITDA 2,918 6,555 5,220 11,173 Share-based compensation (124) 368 1,128 789 Share performance related bonus (1) — — — (3) Unrealized loss (gain) from changes in derivative fair value of financial instruments (139) 19 (188) 75 Severance (2) 1,121 — 1,120 — Other income (2) — (2) — Gain on sale of assets (3) (1) (3) (5) Gain on sale of investments — — — (16) Foreign exchange loss 17 — 73 28 Realized other loss 26 — 94 — Unrealized other loss (26) — — — Other charges (3) 509 135 497 262 Adjusted EBITDA 4,299 7,076 7,940 12,302 Less capital expenditures (266) (399) (711) (834) Income taxes received (paid) (287) (120) (362) 258 Free Cash Flow $3,746 $6,557 $6,866 $11,726 (1) Share performance related bonus is included in wages and consulting on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). (2) Severance is included in wages and consulting on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). (3) Other charges are included in wages and consulting and general and administrative on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). For the three months ended June 30, 2025, these charges include direct and incremental business acquisition related costs. June 30, December 31, Assets Current assets: Cash $8,143,612 $5,189,315 Restricted cash 102,967 97,244 Trade and other receivables 11,533,480 14,874,882 Lease receivable 49,302 326,267 Income taxes receivable 822,621 784,332 Prepaid expenses 886,005 761,652 Derivative instruments 43,140 — 21,581,127 22,033,692 Property and equipment 349,587 482,276 Right-of-use asset 1,288,772 1,564,687 Intangible assets 38,961,754 37,597,990 Goodwill 52,635,164 52,635,164 Other assets 144,288 154,497 Deferred tax asset 19,174,931 17,937,708 Total assets $134,135,623 $132,406,014 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $8,574,197 $6,864,256 Income taxes payable 224,015 426,778 Derivative instruments — 145,068 Deferred revenue 1,394,824 1,125,592 Current portion of long-term debt 646,004 687,875 Lease liability 683,650 946,626 11,522,690 10,196,195 Long-term debt 44,000,000 38,000,000 Lease liability 936,673 1,180,878 Deferred tax liability 7,585 315,607 Other long-term liabilities 26,612 26,612 Total liabilities 56,493,560 49,719,292 Shareholders' equity: Share capital 158,703,767 163,250,013 Contributed surplus 22,552,185 25,413,119 Other comprehensive loss (145,494) (145,494) Deficit (103,468,395) (105,830,916) 77,642,063 82,686,722 Total liabilities and shareholders' equity $134,135,623 $132,406,014 VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss) (In U.S. dollars, except per share amounts) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Operating expenses: Wages and consulting 8,276,004 6,822,678 15,438,208 13,762,711 Share-based compensation (124,142) 367,575 1,127,851 788,816 Platform and technology 2,074,497 1,675,344 3,714,095 3,218,879 General and administrative 1,382,546 1,268,179 2,443,011 2,460,804 Depreciation and amortization 4,830,349 4,500,984 9,253,924 9,065,612 16,439,254 14,634,760 31,977,089 29,296,822 Operating income (loss) (1,898,938) 2,052,756 (3,871,256) 2,114,138 Other expenses (income): Other income (1,824) — (1,824) — Gain on sale of assets (2,601) (1,098) (2,941) (4,718) Net interest and financing expense 815,644 1,074,882 1,563,462 2,237,814 Gain on sale of investments — — — (16,398) Foreign exchange loss 17,385 261 73,040 27,641 Realized other loss 26,453 — 94,030 — Unrealized other loss (26,453) — — — 828,604 1,074,045 1,725,767 2,244,339 Income (loss) before income taxes (2,727,542) 978,711 (5,597,023) (130,201) Income tax expense (recovery) Current (255,579) 163,747 155,905 252,365 Deferred (679,785) 391,866 (1,545,241) 178,929 (935,364) 555,613 (1,389,336) 431,294 Net income (loss) ($1,792,178) $423,098 ($4,207,687) ($561,495) Other comprehensive income (loss) Items that may be reclassified to net income (loss): Foreign currency differences on translation of foreign operations — (13,399) — 12,846 Total comprehensive income (loss) ($1,792,178) $409,699 ($4,207,687) ($548,649) Earnings (loss) per share: Basic ($0.08) $0.02 ($0.19) ($0.03) Diluted (0.08) 0.02 (0.19) (0.03) VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Cash Flows (In U.S. dollars) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cash provided by (used in): Operating activities: Net income (loss) ($1,792,178) $423,098 ($4,207,687) ($561,495) Items not involving cash: Depreciation and amortization 4,830,349 4,500,984 9,253,924 9,065,612 Net interest and financing expense 815,644 1,074,882 1,563,462 2,237,814 Gain on sale of assets (2,601) (1,098) (2,941) (4,718) Gain on sale of investments — — — (16,398) Unrealized loss (gain) in derivative instruments (138,557) 19,035 (188,208) 74,703 Unrealized other gain (26,453) — — — Income tax expense (recovery) (935,364) 555,613 (1,389,336) 431,294 Share-based compensation (124,142) 367,575 1,127,851 788,816 2,626,698 6,940,089 6,157,065 12,015,628 Change in non-cash operating assets and liabilities 4,792,347 414,915 5,027,900 1,858,879 Interest paid (690,393) (1,070,476) (1,414,940) (2,233,328) Income taxes received (paid) (287,300) (119,557) (362,330) 257,529 6,441,352 6,164,971 9,407,695 11,898,708 Financing activities: Repayment of term loan — (625,000) — (1,250,000) Proceeds from issuance of revolving loan 3,000,000 — 6,000,000 — Repayment of revolving loan — (5,875,000) — (8,250,000) Cash settlement for vested RSUs (119,753) — (119,753) — Repurchase of share capital for cancellation (1,845,070) (435,859) (1,845,070) (669,085) Lease payments (232,372) (340,661) (555,651) (701,643) Proceeds from sublease 138,002 147,878 278,942 297,956 940,807 (7,128,642) 3,758,468 (10,572,772) Investing activities: Additions to property and equipment and intangible assets (268,712) (399,007) (714,654) (833,618) Proceeds from sale of assets 2,601 1,967 2,941 6,081 Proceeds from sale of investments — — — 16,398 Acquisitions (4,038,028) (200,178) (9,494,430) (200,178) Increase (decrease) in cash 3,078,020 (1,560,889) 2,960,020 314,619 Cash, beginning of period 5,014,293 7,908,036 5,189,315 6,015,184 Change in restricted cash balances (9,052) (3,287) (5,723) 979
National Post
an hour ago
- National Post
VerticalScope Announces Second Quarter 2025 Financial Results
Article content Unless otherwise stated, all amounts are in US dollars. Article content TORONTO — 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 second quarter ended June 30, 2025 ('Q2' or 'the quarter'). Article content Article content 'In Q2, our platform served 90 million MAUs and generated $14.5 million in revenue,' said Chris Goodridge, CEO of VerticalScope. 'The real story this quarter is the speed at which we've reshaped our teams and sharpened our focus to position the Company for long-term growth. Our profitable model and strong cash generation give us the firepower to invest decisively in high-impact initiatives, from expanding direct traffic to accelerating AI-powered innovation.' Article content Mr. Goodridge added, 'The way people find and consume information is changing faster than ever, and that's creating new opportunities for platforms like ours. VerticalScope's communities deliver exceptional depth of expertise and engagement. As AI reshapes the digital landscape, we're focused on scaling what makes us unique — building stronger relationships with our large base of direct users, broadening how we monetize our audiences, and deploying AI to enhance user experience. We have the assets, the talent, and the strategy to capture meaningful growth in the years ahead.' Article content Financial Highlights for the Three Months Ended June 30, 2025 Article content Revenue decreased 13% to $14.5M, primarily due to a decline in MAUs, which impacted programmatic advertising. This follows a period of record-high MAU in the prior year. ARPU increased 17%, supported by a 41% year-over-year increase in e-commerce revenue. Adjusted EBITDA was $4.3M, down 39%, representing a 30% margin (compared to 42% in Q2 2024), reflecting lower revenue and increased investments in AI and traffic diversification. Operating Cash Flow increased 4% to $6.4M, inclusive of non-cash working capital changes from acquisitions. Free Cash Flow totaled $3.7M, reflecting 87% conversion of Adjusted EBITDA. Available Liquidity was $64.1M, comprised of $8.1M in unrestricted cash and $56.0M of undrawn revolver capacity. Net loss was $1.8M, compared to net income of $0.4M in the prior year, primarily due to lower revenue and $1.6M in one-time personnel and acquisition costs, partially offset by income tax recovery. Article content 'Q2 demonstrated our ability to execute effectively while delivering a healthy Free Cash Flow conversion of 87% and a 30% Adjusted EBITDA margin,' said Vince Bellissimo, CFO of VerticalScope. 'Supported by a strong balance sheet and an efficient operating model, we continue to invest strategically in key initiatives that drive long-term value creation for our shareholders as we move into the second half of the year.' Article content Earnings Conference Call and Webcast Article content Management will host a conference call and webcast to discuss the Company's financial results at 7 a.m. ET on Wednesday, August 13, 2025. Article content Live Call Registration and Webcast: Joining Live by Telephone: Canada: 1 833 950 0062 United States: 1 833 470 1428 Participant Access code: 628663 Article content If you are unable to join live, an archived recording of the webcast will be available at: Article content About VerticalScope Holdings Inc. Article content 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 100 million monthly active users. Article content Forward-Looking Statements Article content 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. 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, potential disruption from artificial intelligence technologies, and the factors discussed under 'Risk Factors' in the Company's Annual Information Form dated March 31, 2025, which is available on the Company's profile on SEDAR Plus at 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. Article content Non-IFRS Measures Article content This press release references certain non-IFRS measures, including Adjusted EBITDA and Free Cash Flow, and Free Cash Flow Conversion as described below. This press 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. Article content The Company uses non-IFRS measures including: Article content 'EBITDA' is calculated as net income (loss) excluding interest, income tax expense (recovery), and depreciation and amortization. Article content 'Adjusted EBITDA' is calculated as EBITDA adjusted for share-based compensation, share performance related bonuses, unrealized gains or losses from changes in fair value of derivative financial instruments, severance, adjustments to contingent consideration liabilities measured at fair value through profit and loss, gain or loss on sale of assets, gain or loss on sale of investments, foreign exchange loss (gain), realized and unrealized other loss (gain) and other charges that include direct and incremental business acquisition related costs. Article content 'Free Cash Flow' means Adjusted EBITDA less capital expenditures and income taxes paid during the period. Article content 'Free Cash Flow Conversion' is equal to Free Cash Flow for the period divided by Adjusted EBITDA for the period. Article content '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. 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. Article content Related Links The following table sets forth a reconciliation of Adjusted EBITDA and Free Cash Flow to net income (loss): Article content (Unaudited) Three Months Ended June 30, Six Months Ended June 30, (in thousands of US dollars) 2025 2024 2025 2024 Net income (loss) ($1,792) $423 ($4,208) ($561) Net interest and financing expense 816 1,075 1,563 2,238 Income tax expense (recovery) (935) 556 (1,389) 431 Depreciation and amortization 4,830 4,501 9,254 9,066 EBITDA 2,918 6,555 5,220 11,173 Share-based compensation (124) 368 1,128 789 Share performance related bonus (1) — — — (3) Unrealized loss (gain) from changes in derivative fair value of financial instruments (139) 19 (188) 75 Severance (2) 1,121 — 1,120 — Other income (2) — (2) — Gain on sale of assets (3) (1) (3) (5) Gain on sale of investments — — — (16) Foreign exchange loss 17 — 73 28 Realized other loss 26 — 94 — Unrealized other loss (26) — — — Other charges (3) 509 135 497 262 Adjusted EBITDA 4,299 7,076 7,940 12,302 Less capital expenditures (266) (399) (711) (834) Income taxes received (paid) (287) (120) (362) 258 Free Cash Flow $3,746 $6,557 $6,866 $11,726 Article content (1) Share performance related bonus is included in wages and consulting on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). (2) Severance is included in wages and consulting on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). (3) Other charges are included in wages and consulting and general and administrative on the condensed consolidated interim statements of income (loss) and comprehensive income (loss). For the three months ended June 30, 2025, these charges include direct and incremental business acquisition related costs. Article content June 30, December 31, 2025 2024 Assets Current assets: Cash $8,143,612 $5,189,315 Restricted cash 102,967 97,244 Trade and other receivables 11,533,480 14,874,882 Lease receivable 49,302 326,267 Income taxes receivable 822,621 784,332 Prepaid expenses 886,005 761,652 Derivative instruments 43,140 — 21,581,127 22,033,692 Property and equipment 349,587 482,276 Right-of-use asset 1,288,772 1,564,687 Intangible assets 38,961,754 37,597,990 Goodwill 52,635,164 52,635,164 Other assets 144,288 154,497 Deferred tax asset 19,174,931 17,937,708 Total assets $134,135,623 $132,406,014 Liabilities and Shareholders' Equity Current liabilities: Accounts payable and accrued liabilities $8,574,197 $6,864,256 Income taxes payable 224,015 426,778 Derivative instruments — 145,068 Deferred revenue 1,394,824 1,125,592 Current portion of long-term debt 646,004 687,875 Lease liability 683,650 946,626 11,522,690 10,196,195 Long-term debt 44,000,000 38,000,000 Lease liability 936,673 1,180,878 Deferred tax liability 7,585 315,607 Other long-term liabilities 26,612 26,612 Total liabilities 56,493,560 49,719,292 Shareholders' equity: Share capital 158,703,767 163,250,013 Contributed surplus 22,552,185 25,413,119 Other comprehensive loss (145,494) (145,494) Deficit (103,468,395) (105,830,916) 77,642,063 82,686,722 Total liabilities and shareholders' equity $134,135,623 $132,406,014 Article content VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Income (Loss) and Comprehensive Income (Loss) (In U.S. dollars, except per share amounts) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Revenue $14,540,316 $16,687,516 $28,105,833 $31,410,960 Operating expenses: Wages and consulting 8,276,004 6,822,678 15,438,208 13,762,711 Share-based compensation (124,142) 367,575 1,127,851 788,816 Platform and technology 2,074,497 1,675,344 3,714,095 3,218,879 General and administrative 1,382,546 1,268,179 2,443,011 2,460,804 Depreciation and amortization 4,830,349 4,500,984 9,253,924 9,065,612 16,439,254 14,634,760 31,977,089 29,296,822 Operating income (loss) (1,898,938) 2,052,756 (3,871,256) 2,114,138 Other expenses (income): Other income (1,824) — (1,824) — Gain on sale of assets (2,601) (1,098) (2,941) (4,718) Net interest and financing expense 815,644 1,074,882 1,563,462 2,237,814 Gain on sale of investments — — — (16,398) Foreign exchange loss 17,385 261 73,040 27,641 Realized other loss 26,453 — 94,030 — Unrealized other loss (26,453) — — — 828,604 1,074,045 1,725,767 2,244,339 Income (loss) before income taxes (2,727,542) 978,711 (5,597,023) (130,201) Income tax expense (recovery) Current (255,579) 163,747 155,905 252,365 Deferred (679,785) 391,866 (1,545,241) 178,929 (935,364) 555,613 (1,389,336) 431,294 Net income (loss) ($1,792,178) $423,098 ($4,207,687) ($561,495) Other comprehensive income (loss) Items that may be reclassified to net income (loss): Foreign currency differences on translation of foreign operations — (13,399) — 12,846 Total comprehensive income (loss) ($1,792,178) $409,699 ($4,207,687) ($548,649) Earnings (loss) per share: Basic ($0.08) $0.02 ($0.19) ($0.03) Diluted (0.08) 0.02 (0.19) (0.03) Article content VERTICALSCOPE HOLDINGS INC. Condensed Consolidated Interim Statements of Cash Flows (In U.S. dollars) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2025 2024 2025 2024 Cash provided by (used in): Operating activities: Net income (loss) ($1,792,178) $423,098 ($4,207,687) ($561,495) Items not involving cash: Depreciation and amortization 4,830,349 4,500,984 9,253,924 9,065,612 Net interest and financing expense 815,644 1,074,882 1,563,462 2,237,814 Gain on sale of assets (2,601) (1,098) (2,941) (4,718) Gain on sale of investments — — — (16,398) Unrealized loss (gain) in derivative instruments (138,557) 19,035 (188,208) 74,703 Unrealized other gain (26,453) — — — Income tax expense (recovery) (935,364) 555,613 (1,389,336) 431,294 Share-based compensation (124,142) 367,575 1,127,851 788,816 2,626,698 6,940,089 6,157,065 12,015,628 Change in non-cash operating assets and liabilities 4,792,347 414,915 5,027,900 1,858,879 Interest paid (690,393) (1,070,476) (1,414,940) (2,233,328) Income taxes received (paid) (287,300) (119,557) (362,330) 257,529 6,441,352 6,164,971 9,407,695 11,898,708 Financing activities: Repayment of term loan — (625,000) — (1,250,000) Proceeds from issuance of revolving loan 3,000,000 — 6,000,000 — Repayment of revolving loan — (5,875,000) — (8,250,000) Cash settlement for vested RSUs (119,753) — (119,753) — Repurchase of share capital for cancellation (1,845,070) (435,859) (1,845,070) (669,085) Lease payments (232,372) (340,661) (555,651) (701,643) Proceeds from sublease 138,002 147,878 278,942 297,956 940,807 (7,128,642) 3,758,468 (10,572,772) Investing activities: Additions to property and equipment and intangible assets (268,712) (399,007) (714,654) (833,618) Proceeds from sale of assets 2,601 1,967 2,941 6,081 Proceeds from sale of investments — — — 16,398 Acquisitions (4,038,028) (200,178) (9,494,430) (200,178) (4,304,139) (597,218) (10,206,143) (1,011,317) Increase (decrease) in cash 3,078,020 (1,560,889) 2,960,020 314,619 Cash, beginning of period 5,014,293 7,908,036 5,189,315 6,015,184 Change in restricted cash balances (9,052) (3,287) (5,723) 979 Effect of movement of exchange rates on cash and restricted cash held 60,351 (22,881) — (9,803) Cash, end of period $8,143,612 $6,320,979 $8,143,612 $6,320,979 Article content Article content Article content Article content Article content Contacts Article content For further information Investor and media inquiries:
