TeraGo (TSE:TGO) reported lower third-quarter revenue but improved adjusted earnings and a narrower net loss as it continued shifting toward larger enterprise customers and exiting unprofitable accounts.
Revenue fell to CAD 6.2 million from CAD 6.4 million a year earlier, while adjusted earnings before interest, taxes, depreciation and amortization rose 3.9% to CAD 1.01 million from CAD 971,000. The net loss narrowed to CAD 3.7 million from CAD 4.06 million.
President and CEO Daniel Vucinic said the company’s focus on larger, multi-location customers is helping increase average revenue per account, though those customers can take longer to install. He said TeraGo is also directing its resources away from lower-margin accounts that do not fit its strategy.
Higher bookings support revenue outlook
Chief Financial Officer Raj Sapra attributed the revenue decline primarily to the continuing impact of lower bookings in 2025 and the company’s decision to exit unprofitable accounts. Revenue from new customers partially offset those effects.
Asked whether revenue would stabilize, Vucinic said the business was near a turning point toward the end of 2026 and into 2027. “We should see that revenue increasing as we go forward,” he said.
Sapra said year-to-date bookings were much higher than a year earlier and net bookings were significantly positive. He said management believed revenue was bottoming out in the second and third quarters and expected it to move upward as deployments continued.
Average revenue per account rose 4.6% to CAD 1,298, compared with CAD 1,241 a year earlier. Quarterly churn edged up to 1.1% from 1%, while churn for the first nine months held at 1%. Sapra said he expected average revenue per account to continue increasing as TeraGo sheds smaller customers and adds locations for existing mid-market and enterprise clients.
The company serves more than 5,000 locations, Sapra said, compared with about 4,900 a couple of years ago. Over the same period, its customer count declined by roughly 100 from about 1,700.
Monthly recurring revenue in backlog at Sept. 30 was CAD 71,131, down from CAD 95,832 a year earlier. Sapra said the decrease reflected higher installation volumes as customers were brought into service and backlog was converted into recurring revenue.
Cash flow improves
Cash generated from operating activities rose 49% to CAD 1.7 million in the quarter, from CAD 1.1 million a year earlier. TeraGo ended the quarter with CAD 5.1 million in cash and cash equivalents.
For the first nine months of 2026, adjusted EBITDA rose 3.1% to CAD 3 million, while the net loss narrowed to CAD 10.7 million from CAD 11.9 million. Sapra said lower operating expenses and cost management helped drive the improvement in adjusted EBITDA.
Spectrum transition and auction
Vucinic said TeraGo’s existing fixed wireless spectrum will transition to flexible-use licences under the framework established by Innovation, Science and Economic Development Canada. He said the change could broaden potential applications to include mobility, private 5G networks, fixed satellite and advanced fixed wireless access.
A millimeter wave spectrum auction is scheduled for January 2028. Vucinic said he believes it could provide a market reference for spectrum value and bring new investment into the ecosystem. Asked whether TeraGo intended to buy more spectrum at the auction, he said the company was not prepared to discuss its positioning publicly.
Vucinic also pointed to Qualcomm’s work on connecting non-terrestrial and terrestrial networks using millimeter wave spectrum. In response to an analyst’s question, he said the technology had been tested in facilities and laboratories but was not yet in mainstream production.
For 2027, Vucinic said TeraGo’s priorities include converting larger sales opportunities into contracts, bringing customers into service, maintaining cost discipline and preparing for the spectrum transition and auction.
About TeraGo (TSE:TGO)
TERAGO provides managed network and security services to businesses across Canada ensuring highly secure, reliable, and redundant connectivity including private 5G wireless networks, Fixed Wireless access, fiber, and cable wireline network connectivity. As Canada’s biggest mmWave spectrum holders, the Company possesses spectrum licenses in the 24 GHz and 38 GHz spectrum bands, which it utilizes to provide secure, dedicated SLA guaranteed enterprise grade performance that is technology diverse from buried cables ensuring high availability connectivity services.
