Haivision Systems (TSE:HAI) reported first-quarter fiscal 2026 results highlighted by double-digit revenue growth and a sharp year-over-year improvement in adjusted EBITDA, while management pointed to procurement-related timing uncertainty that could weigh on near-term visibility.
Revenue up 25% as company cites third straight quarter of double-digit growth
President and CEO Miroslav Wicha said the company is “well into” its two-year strategic plan and delivered “a 25.1% revenue growth over Q1 of 2025,” along with “an EBITDA growth of 369% over Q1 2025.” He described the quarter as “a great start to 2026” and tied the performance to Haivision’s longer-term objective of reaching 20% EBITDA.
Adjusted EBITDA rises to CAD 2.6 million; margins pressured by product mix
Rabinowitz reported gross margin of 70.5%, down 150 basis points year over year. He attributed the decline largely to sales mix and higher sales in three product areas that are “on the lower end” of the company’s margin range, including transmitter products, HMP solutions (server-installed software sold as an appliance), and the timing of deliveries under a U.S. Navy contract that he described as a legacy of Haivision’s systems integrator business.
He said the gross margin outcome appeared “more happenstance and not a reflection of a systemic change to the business,” and noted that new transmitter products have a “better cost price profile” and will be manufactured in North America, which the company sees as an opportunity to improve margins over time.
Total expenses were CAD 25.0 million, up CAD 2.6 million from the prior year. Rabinowitz said the company made incremental investments in R&D and sales initiatives in the first half of fiscal 2025 that remain part of the cost structure, but emphasized that operating expenses have remained relatively flat over the last three quarters. He broke down the year-over-year increase as driven largely by compensation-related expenses, professional services, and share-based payments, along with higher spending in G&A and R&D tied to the product release schedule.
Higher revenue generated an incremental CAD 4.6 million in gross profit, and with expenses rising more modestly, the company’s operating loss narrowed to CAD 200,000, a CAD 2.0 million improvement from the prior year, Rabinowitz said.
Adjusted EBITDA totaled CAD 2.6 million, up from CAD 600,000 a year earlier, with an adjusted EBITDA margin of 7.5% versus 2% last year.
Recurring revenue grows modestly; long-term mix target outlined
Recurring revenue from maintenance, support contracts, and cloud services was CAD 7.3 million, up 4.5% year over year, and represented 21% of quarterly revenue, Rabinowitz said. Management said recurring revenue is expected to continue growing as product sales and renewals build.
Asked about the recurring revenue mix, Rabinowitz said the percentage shift reflected quarterly mathematics—recurring revenue is more stable while quarterly revenue can fluctuate. He also outlined a longer-term aspiration to have revenue split roughly evenly between hardware, software, and maintenance/support services—“a third, a third, a third”—while acknowledging it would take time to reach that level.
Product momentum: Kraken X1 and Falkon X2; inventory increased to meet transmitter demand
Wicha highlighted new products introduced recently, including an AI-based tactical edge processor for defense, military, and ISR markets called the Kraken X1 (KX1), which he said leverages NVIDIA Jetson GPU technology for real-time AI-enabled encoding. He said Haivision has begun volume shipping the KX1 and described early reception as strong.
In the Q&A session, Wicha said interest increased as the company moved into volume shipments and got early systems into key customers. He framed the product as an enabling technology for applying “very large scale AI models” to real-time video at the edge and said the initial feedback has been “extremely positive,” though Rabinowitz cautioned that such devices are not “plug-and-play” and that broader sales would come “sometime in the future” as customers evaluate how KX1 fits into sophisticated workflows.
Wicha also pointed to the company’s next-generation transmitter platform, Falkon X2, saying early demand exceeded initial production plans and Haivision increased supply-chain inventory to meet demand. He called Falkon X2 the company’s “most successful product launch” to date, citing customer adoption of 5G networks and MIMO antenna technology.
Guidance reaffirmed, but procurement timing creates uncertainty
Wicha reaffirmed full-year fiscal 2026 guidance of CAD 150 million+ in revenue. He said the company plans to keep operating expenses “pretty much flat” versus 2025 while delivering double-digit revenue growth, targeting “a 50%+ increase” in overall EBITDA over 2025. He also said Haivision expects to deliver double-digit EBITDA and revenue growth in fiscal 2026 and target a full year of 20% EBITDA performance in fiscal 2027.
At the same time, both executives flagged external factors affecting near-term timing. Wicha cited uncertainty tied to the war in Ukraine and “continuous funding politics” for the U.S. Department of Homeland Security, which he said is pushing significant border security projects “to the right.” Rabinowitz added that geopolitical events and U.S. government funding dynamics are contributing to slower contracting cycles, with procurement priorities shifting and deliverables moving later.
Management said it expects a stronger second half, similar to last year when the second half represented well over half of revenue. In response to an analyst question, Wicha said the company remained confident in a strong Q4 and still felt good about Q3, while monitoring conditions in Q2. Rabinowitz emphasized that the challenge is not internal execution—Haivision’s supply chain and manufacturing are designed to deliver quickly after purchase orders—but rather the pace of procurement processes and customer acceptance of deliveries.
Rabinowitz also discussed balance sheet items and capital allocation. Haivision ended the quarter with about CAD 17 million in cash, and borrowings on its line of credit increased by about CAD 2.8 million. He said the company purchased CAD 1.6 million in shares for cancellation under its normal course issuer bid during the quarter and renewed its NCIB in February 2026, allowing for the cancellation of up to 1.8 million additional shares. The credit facility remains at CAD 35 million with CAD 5.5 million outstanding, and it can be expanded to as much as CAD 65 million for acquisitions, though Rabinowitz said no transactions are currently in progress and it is unlikely the company will complete an M&A deal this fiscal year.
On supply chain and pricing, management cited tightening in the global memory semiconductor market and rising server-related costs driven by AI data center demand. Rabinowitz said Haivision has initiated price increases for software products that rely on standard servers and is watching supply closely, with more concern about potential shortages than margin compression.
About Haivision Systems (TSE:HAI)
Haivision is a leading global provider of mission-critical, real-time video streaming and visual collaboration solutions. Our connected cloud and intelligent edge technologies enable organizations globally to engage audiences, enhance collaboration, and support decision making. We provide high quality, low latency, secure, and reliable live video at a global scale. Haivision open sourced its award-winning SRT low latency video streaming protocol and founded the SRT Alliance to support its adoption.
