Yellow Pages Limited (Y) Earnings Call Transcript

statements are based on assumptions and are subject to important risks and uncertainties. Yellow pages' actual results could differ materially from expectations discussed. Details of Yellow Page's caution regarding forward-looking information, including key assumptions and risks, can be found in Yellow Page's Management Discussion and Analysis for the third quarter of 2026. This call is being recorded and webcast, and all of the disclosure documents are available on the company's website and on Cedar Plus. I would now like to turn the meeting over to Ms. Sherilyn King, President and Chief Executive Officer. Please go ahead, Madeline.

Thank you, Howard. Good morning, everyone. Welcome to our third quarter 2026 analyst call. appreciate you taking the time to join our call this morning. Today I'm joined by Asunta Tortoise, our chief financial officer. I will begin with some overview comments and then Asunta will provide you more details on our financial results for the quarter. We will answer any questions you have at the end of this call. We are pleased with our results for our third quarter of 2026. In the third quarter, we continued to deliver good profitability and strong cash generation despite the ongoing revenue pressures. For the third quarter of 2026, we reported total revenue decline of 7% or 7.8% on an underlying basis once the impact of the Canada Post labor disruption in the prior year is adjusted for. We had a solid quarterly earnings as our adjusted EBITDA for the quarter was 18.8% of revenue. Our cash on hand at the end of October stood at approximately 49 million. During the third quarter of 2026, we announced the launch of an AI receptionist, a new AI powered solution designed to help Canadian businesses respond to their customers, capture opportunities and stay connected around the clock. This launch reflects the continued evolution of our digital marketing solutions, as artificial intelligence transforms how consumers discover, evaluate and engage with local businesses. Lastly, our Board has declared a dividend of $0.25 per common share to be paid on December 15th, 2026 to shareholders of record as of November 23rd, 2026. I will now pass it on to Asunta to provide additional details on the numbers.

Thanks, Sherilyn. Good morning, everyone. Let me take you through our financial results for the third quarter ended September 30, 2026. Our total revenues decreased by 3.3 million or 7% year over year and amounted to 45 million for the third quarter. The reported year over year decline benefited from a prior year timing impact as approximately 0.5 million of print revenue was deferred from the third quarter to the fourth quarter of 2025. due to the Canada Post labor disruption. Excluding this timing impact, total revenues would have decreased by 7.8% in the third quarter of 2026. The decrease in revenues is primarily due to the decline of our higher margin digital media and print products, and to a lesser extent to our lower margin digital services products, thereby creating pressure on our gross profit margin. Digital revenues decreased by 6.3% year-over-year and amounted to 37.5 million during the third quarter of 2026. The decline in digital revenue was mainly attributable to a lower digital customer count, partially offset by higher average spend per customer. The digital revenue decline rate was broadly stable at 6.3 compared to 6.2 in the same period last year. Print revenues decreased 9.9% year-over-year and amounted to €7.5 million for the three-month period ended September 30, 26. Excluding the timing impact on the 2025 comparative period I mentioned earlier, print revenues would have decreased by approximately 14.5%. 5% in the third quarter of 2026. The underlying decline in print revenue was mainly attributable to the decrease in the number of print customers, while the average spend per print customer improved year over year as the proportion of lower spending accounts declined. Adjusted EBITDA for the third quarter was impacted by lower revenues, pressure from product mix, and the impact of the company's share price on cash settled stock-based compensation. These factors were largely offset by optimizations in cost of sales and reductions in other operating costs. The change in YP's share price resulted in an expense of 0.9 million for the third quarter of 2026, compared to a recovery of 0.3 million for the same period last year. As a result, adjusted EBITDA decreased year-over-year by 1.5 million or 15.3% to 8.5 million for the quarter. Adjusted EBITDA margin decreased to 18.8% compared to 20.6% for the same period last year. Revenue pressures and change in product mix partially offset by continued optimizations and cost reductions will continue to cause pressure on margins in upcoming quarters. Adjusted EBITDA less capex for the third quarter decreased by 1.4 million year-over-year to 8.2 million, mainly driven by lower adjusted EBITDA. net income increased to 4.6 million for the third quarter of 2026 compared to 4 million for the same period last year. The increase was mainly due to a net recovery in restructuring and other charges and lower depreciation and amortization partially offset by lower adjusted EBITDA and increases in financial charges and income tax expense. As Sherilyn mentioned, our cash on hand at the end of October stood at approximately 49 million. Finally, the board has declared a cash dividend of 25 cents per common share payable on December 15, 2026, to shareholders of record as at November 23, 2026. This concludes our formal remarks. Thank you for taking the time to join us this morning. We will now take your questions.

Thank you. Ladies and gentlemen, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press star 1 1 again. If you're using a speakerphone, please pick up the handset before pressing the numbers. Again, if you have a question or comment at this time, please press star 1-1 on your telephone keypad. Please stand by while we compile the Q&A roster. Once again, ladies and gentlemen, if you have a question or comment, please press star 1 1 on your telephone keypad. I'm sure no questions in the queue at this time. I'd like to turn the conference back over to management for any closing remarks.

Thank you, Howard. Again, I just want to say thank you. We appreciate that you took the time to join our call today, and we will talk to you again when we release Q4 results in February of 2027. So, thank you.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. This live transcript is auto-generated without human intervention or review. [Call has ended.] This live transcript is auto-generated without human intervention or review.