Yellow Pages (TSE:Y) reported lower revenue and adjusted earnings for the third quarter of 2026, as declines in digital and print products and changes in its product mix pressured margins.
Revenue fell 7% from a year earlier to CAD 45 million for the quarter ended September 30. Adjusted EBITDA declined 15.3% to CAD 8.5 million, while net income rose to CAD 4.6 million from CAD 4 million.
President and CEO Sherilyn King said the company continued to generate cash despite ongoing revenue pressures. Yellow Pages had approximately CAD 49 million in cash at the end of October, she said.
Digital and Print Revenue Decline
The reported revenue decline benefited from a timing difference in the prior year. CFO Assunta Tortis said approximately CAD 0.5 million in print revenue was deferred from the third quarter to the fourth quarter of 2025 because of the Canada Post labor disruption. Excluding that effect, third-quarter 2026 revenue would have declined 7.8%.
Digital revenue fell 6.3% to CAD 37.5 million, primarily because of a lower digital customer count, partially offset by higher average spending per customer. The rate of decline was broadly stable compared with the 6.2% decrease reported in the same period a year earlier.
Print revenue decreased 9.9% to CAD 7.5 million. Excluding the prior-year timing effect, it would have fallen approximately 14.5%, Tortis said. The underlying decline was mainly due to fewer print customers, although average spending per customer increased as the proportion of lower-spending accounts fell.
Tortis said revenue declines were concentrated in the company’s higher-margin digital media and print products and, to a lesser extent, lower-margin digital services products, creating pressure on gross profit margins.
Margins and Net Income
Adjusted EBITDA margin fell to 18.8% from 20.6% a year earlier. Tortis attributed the decline in adjusted EBITDA to lower revenue, product mix and the effect of the company’s share price on cash-settled stock-based compensation. Cost-of-sales improvements and reductions in other operating costs largely offset those factors.
The share price change resulted in a CAD 0.9 million expense in the quarter, compared with a CAD 0.3 million recovery a year earlier. Tortis said revenue pressure and product mix, partially offset by continued cost reductions, will continue to pressure margins in upcoming quarters.
Adjusted EBITDA less capital expenditures fell by CAD 1.4 million to CAD 8.2 million. Net income increased mainly because of a net recovery in restructuring and other charges and lower depreciation and amortization. Those benefits were partially offset by lower adjusted EBITDA and higher financial charges and income tax expense.
AI Product and Dividend
King said Yellow Pages launched an AI Receptionist during the quarter. The AI-powered product is designed to help Canadian businesses respond to customers, capture opportunities and remain connected around the clock, she said.
The board declared a cash dividend of CAD 0.25 per common share, payable December 15, 2026, to shareholders of record on November 23. No questions were asked during the call. King said the company expects to release fourth-quarter results in February 2027.
About Yellow Pages (TSE:Y)
Yellow Pages Ltd is a media and marketing solutions company in Canada, offering small and medium-sized enterprises (SMEs) services to help them connect with local consumers. The company has two reportable segments namely Yellow Pages and Other. It generates maximum revenue from the Yellow Pages segment.
