TeraGo (TSE:TGO) executives highlighted improving customer metrics alongside continued revenue pressure during the company’s fourth-quarter and full-year 2025 earnings call, pointing to macroeconomic headwinds, longer procurement cycles, and deliberate customer base optimization as key factors weighing on top-line results.
Management: Customer focus, financing, and positioning for AI-driven demand
Chief Executive Officer Daniel Vucinic said the company maintained a “disciplined focus” on customers and operational efficiency in 2025, while positioning the business to capitalize on rising bandwidth and low-latency requirements as artificial intelligence reshapes enterprise connectivity needs. He said AI-related needs are driving demand for increased bandwidth quality, secondary connections, and lower latency.
On the go-to-market approach, Vucinic emphasized differentiation through reliability, responsiveness, and end-to-end managed accountability for business continuity. He said those “proof points” are reflected in lower churn and higher average revenue per account.
The company also announced a customer leadership appointment. Vucinic noted that May Daou was appointed Chief Customer Officer and will be accountable for building a customer-first culture focused on serving, maintaining, and growing client relationships.
Operating metrics: ARPA and churn improved
VP of Finance Parveen Mitra, speaking in place of CFO Raj Sapra who was said to be away on personal matters, reviewed key performance indicators for the quarter. Mitra said average revenue per customer (ARPA) in the connectivity business increased 4.4% to CAD 1,265 in Q4 2025, up from CAD 1,212 in the prior-year period. He attributed the improvement to “favorable shifts” in customer base and product mix.
Mitra also reported churn of 0.7% in the quarter, compared with 0.8% a year earlier. He said churn improvement reflects execution of the company’s mid-market and large-scale customer strategy and enhanced renewal and retention programs.
Financial results: Revenue declined; net loss widened
Mitra said total revenue was CAD 6.2 million in Q4 2025, down from CAD 6.57 million in the same period last year. For fiscal 2025, total revenue was CAD 25.36 million, compared with CAD 26.16 million in the prior fiscal year.
Management attributed the year-over-year decline primarily to:
- Decreased bookings
- Delays in installations tied to multi-site deployments
- A reduction in one-time revenues
- Ongoing initiatives to discontinue service for unprofitable accounts
Mitra said the decrease was “partially offset” by revenue from new customers.
Adjusted EBITDA was CAD 885,000 in the fourth quarter, compared with CAD 1.2 million a year earlier. For the full year, Adjusted EBITDA was CAD 3.79 million, down from CAD 4.02 million in fiscal 2024. Mitra said the decline reflected revenue pressures, partially offset by disciplined cost management and continued operational efficiencies.
Net loss widened to CAD 4.9 million in Q4 2025, compared with a net loss of CAD 3.2 million in the prior-year quarter. For fiscal 2025, net loss was CAD 16.8 million, compared with CAD 13.3 million in the prior year. Mitra attributed the increase in net loss primarily to higher finance costs associated with increased debt following financings during the year, as well as non-cash impacts, including an accounting adjustment related to a sale-and-leaseback transaction.
Balance sheet and cash flow
On the balance sheet, Mitra said the company ended the fourth quarter with CAD 12.6 million in cash and cash equivalents. He also reported that in fiscal 2025 the company generated CAD 2.9 million in cash from operations, compared with CAD 5.0 million in the prior year.
Outlook commentary: Revenue growth timing and spectrum consultation
During the Q&A, Cormark analyst David McFadgen asked how long it may take for revenue to return to growth given improving ARPA and churn. Vucinic said lower bookings were partly driven by macroeconomic conditions and the company’s exit from unprofitable customers. He added that the company’s focus on larger multi-site customers has extended installation timelines, noting that different sites often have different contract end dates with incumbent carriers, requiring TeraGo to wait until contracts are near expiration before installing.
Vucinic said management is seeing momentum in the sales funnel and increased engagement, but added that it takes time for bookings to translate into installed services and billing. He suggested a “potential revenue increase towards later this year.”
McFadgen also asked about timing for a decision by Innovation, Science and Economic Development Canada (ISED) on whether millimeter wave spectrum—referred to on the call as the 24 GHz and 38 GHz bands—will be reclassified for flexible use. Vucinic said ISED issued its consultation in March and received responses by the end of June. He said the company is “predicting unofficially” that a decision could come around the summer of this year, roughly one year after the consultation closed, while adding that management is “cautiously optimistic” it will come out “within this year.”
Earlier in prepared remarks, Vucinic said TeraGo is “uniquely positioned” by owning 91% of millimeter wave spectrum and operating a national backbone network with more than 400 wireless hubs. He also discussed potential use cases for millimeter wave technology in private networks and dense venues, while noting the company is encouraged by ISED’s progress on its consultation.
Closing the call, Vucinic thanked customers, shareholders, and employees and said the company looks forward to providing an update on the next quarterly earnings call.
About TeraGo (TSE:TGO)
TeraGo provides wireless connectivity and private 5G wireless networking services to businesses operating across Canada. The Company holds 2120 MHz of exclusive spectrum licenses in the 24 GHz and 38 GHz spectrum bands, which it utilizes to provide secure and reliable enterprise grade networking and connectivity services. TeraGo serves over 1,800 Canadian and Global businesses operating in major markets across Canada, including Toronto, Montreal, Calgary, Edmonton, Vancouver, Ottawa and Winnipeg, and has been providing wireless services since 1999.
