All financial references are in Canadian dollars unless otherwise noted.
Additionally, the Company provided its regular bi-weekly default status report in accordance with National Policy 12-203, Management Cease Trade Orders ("NP 12-203"), along with an update on the timing of its 2025 Annual General and Special Meeting of Shareholders (the "2025 AGM"), and reported on certain related matters.
Key Highlights
The Company reported preliminary unaudited FY 2025 results with revenue of approximately $440.6 million, net loss1 of approximately $(82.7) million, and Adjusted EBITDA2,3 of approximately $231.3 million.
The Company has launched an approximate $15-20 million annualized operational efficiency and cost optimization program, with approximately 60% of these run-rate annualized savings expected to be executed in FY 2026 and the balance in FY 2027.
FY 2026 is an investment year focused on executing the transformation strategy, with the business expected to stabilize in the second half of FY 2026 and return to growth in early FY 2027.
The previously announced sale of Credas for $146.0 million, which is expected to close by January 2026, will reduce leverage and strengthen liquidity, providing additional covenant flexibility and supporting the Company's operational and strategic initiatives.
1 Net loss has been calculated based on the Company's current expectations regarding amortization related to goodwill impairment and is subject to change pending completion of our annual impairment testing.
2 "Adjusted EBITDA" adjusts net loss by adding back financing costs, amortization, depreciation and impairment costs, taxes paid, stock-based compensation expense, loss on contingent receivables and assets held for sale, specific transaction-related expenses related to acquisition, listing and reorganization related expenses, integration and operational restructuring costs and other non-recurring expenses. Operational restructuring costs are incurred as a direct or indirect result of acquisition activities.
3 "Adjusted EBITDA" is not a recognized measure under IFRS, does not have a standardized meaning prescribed by IFRS and is therefore unlikely to be comparable to similar measures presented by other companies. Management believes Adjusted EBITDA provides supplementary information to IFRS measures used in assessing the performance of the business by providing further understanding of the Company's results of operations from management's perspective. For a reconciliation of Adjusted EBITDA to net loss, see the accompanying tables.
Preview of Unaudited FY 2025 and First Quarter FY 2026 Results
To provide investors with greater visibility into the Company's performance while it continues to finalize the filing of its audited financial statements and complete the previously disclosed review being undertaken by the Ontario Securities Commission (the "OSC"), the Company is releasing a preview of its unaudited financial results for the FY 2025, and for the first quarter of FY 2026 ended September 30, 2025.
For the full FY 2025, management anticipates unaudited financial results as follows:
Revenue: Approximately $440.6 million, a 3.7% decrease compared to the fiscal year ended June 30, 2024 ("FY 2024"). About half of this decline reflects macroeconomic headwinds in Canada, the impact of customer contract renewals on volume and pricing, and reduced acquisition activity, while the balance primarily reflects a reclassification between direct costs and gross revenue. This reclassification reduced the amount of revenue reported but had no impact on Adjusted EBITDA.
Net loss: Approximately $(82.7) million, an improvement from $(174.3) million in FY 2024, primarily driven by lower finance costs.
Adjusted EBITDA: Approximately $231.3 million, a 10% decrease compared to FY 2024, mainly due to the revenue impacts noted above and a lower capitalization rate as the Company temporarily shifted certain expenditures from capitalized projects to maintenance expense. This impact is expected to normalize as product streamlining and operational improvement initiatives progress.
The fourth quarter Adjusted EBITDA included cumulative adjustments totalling approximately $11 million, of which about $7 million was related to prior quarters. These adjustments reduced Adjusted EBITDA for the fourth quarter of FY 2025. Excluding these prior-period adjustments, unaudited Adjusted EBITDA for the quarter was approximately $50.3 million.
For the first quarter of FY 2026, management anticipates the unaudited financial results as follows:
Revenue: Approximately $109.4 million, an approximate 9% decrease compared to the first quarter of FY 2025, reflecting the same factors noted above that impacted the annual results for FY 2025.
Net loss: Approximately $(39.2) million, compared to $(9.3) million in the first quarter of FY 2024, primarily driven by lower revenue and higher finance costs.
Adjusted EBITDA: Approximately $49.7 million, an approximate 25% decrease year-over-year, primarily reflecting the same factors noted above that impacted the annual results for FY 2025 as well as the additional reinvestment in the business.
Based on the unaudited results noted above, the Company expects to be in compliance with the financial covenants under its senior credit agreement with respect to the fiscal quarters ended June 30, 2025, and September 30, 2025.
These figures remain subject to final review by management, the Audit Committee, and the Board of Directors (the "Board"), as well as completion of the Company's standard closing and audit procedures for FY 2025 and review procedures for the first quarter of FY 2026. The unaudited figures are not a substitute for audited financial statements prepared in accordance with IFRS, and while final audited results may differ as the OSC Review and audit are completed, they are not expected to differ materially from the information presented herein.
Updated Outlook
Following the appointment of George Tsivin as Chief Executive Officer at the beginning of June 2025, the Company took immediate and decisive action to strengthen its operational and financial foundation.
One of Mr. Tsivin's first initiatives was to launch a transformation program to drive cost savings across the business and create reinvestment capacity. The program is underway and being executed over the next two years through initiatives focused on improving operational efficiency, implementing automation, optimizing workflows, and aligning resources to support sustainable growth. The program is expected to deliver annualized run-rate savings of approximately $15-20 million by the end of FY 2027, with about 60% anticipated in FY 2026 and the remainder in FY 2027. While underway, these initiatives have not had a substantial impact on Q1 FY 2026 results.
Alongside this focus on operational efficiency, the Company is executing a broader transformation strategy centered on the customer-first strategic plan that was announced by the Board concurrent with third quarter FY 2025 results.
Product innovation is at the heart of Dye & Durham's customer-first strategy. Under the leadership of Chief Product Officer Nikesh Patel, the Company has initiated a comprehensive product rationalization program that will simplify offerings into three core platforms: (i) general practice management, (ii) vertical practice applications, and (iii) law data, search and file. This initiative is improving the customer experience, streamlining operations and enabling deeper integration across cloud-based technologies. Progress has been made, with plans to consolidate more than 40 SKUs into approximately 10 or fewer global products. The Company is also migrating to modern, multi-tenant cloud platforms in ...
