Haivision Systems (TSE:HAI) reported a record fourth quarter for fiscal 2025, with management citing accelerating demand across its mission-critical and broadcast markets and reaffirming fiscal 2026 guidance calling for revenue above CAD 150 million and at least 50% growth in Adjusted EBITDA.
Record Q4 revenue and improving profitability
President and CEO Mirko Wicha said the company delivered “a Haivision record quarterly revenue in Q4,” eclipsing $40 million for the first time, alongside a 17.6% EBITDA margin. Wicha reiterated that the company has historically viewed 20%+ EBITDA as achievable at greater scale, previously discussed around the $150 million to $160 million revenue range, and said the company is “very close” to demonstrating that earnings potential.
Adjusted EBITDA for Q4 was $7.1 million versus $2.9 million in the prior year period, an increase of 140%, with an adjusted EBITDA margin of 17.6%. For the full year, adjusted EBITDA was $12.8 million compared with $17.3 million last year, which Rabinowitz attributed to incremental investments in sales and marketing and research and development to position the business for growth in fiscal 2026 and beyond.
Control room mix shift and recurring revenue growth
Rabinowitz emphasized ongoing progress in the company’s control room business model shift away from systems integration and toward a more manufacturer-driven approach. He said control room sales for the year increased by over 35%, while sales of third-party components declined by another 20%. He noted that the U.S. Navy contract is a legacy systems integration model and will continue to include third-party components.
Recurring revenue from maintenance support contracts and cloud services increased, with Q4 recurring revenue of $7.3 million, up 8.6% year over year. For the full year, recurring revenue was $28.9 million, up 10.2%, and represented about 21% of full-year revenue.
Gross margin in Q4 was 73%, consistent with the prior year. Rabinowitz said margins are influenced by quarterly volume (which helps leverage fixed costs in cost of sales), seasonality tied to U.S. government year-end spending, the timing of Navy contract deliveries that include third-party components, and the mix between hardware shipments and higher-margin software-only or virtual machine deployments. Full-year gross margin was 72.5%, slightly below 73.1% in the prior year and in line with the company’s long-term expectations.
Expense trends, litigation, and balance sheet notes
Total expenses in Q4 were $25.4 million, up $3.6 million year over year, driven by higher sales compensation (including variable compensation tied to better-than-expected revenue), increased R&D investment, foreign exchange differences, and higher non-cash share-based payments. Rabinowitz also outlined anticipated future reductions in amortization as acquisition-related technology intangibles become fully amortized: about $600,000 per quarter beginning around the five-year anniversary of the Haivision MCS acquisition, and about $350,000 per quarter beginning around the five-year anniversary of Haivision France.
For the full year, expenses totaled $101 million, up $11.8 million. Rabinowitz cited currency impacts, non-cash share-based payments, and a non-recurring litigation expense related to the VITEC case. He said VITEC has appealed the judge’s ruling and that Haivision has recorded the full liability including damages, interest, and trial costs.
Haivision ended Q4 with $17.2 million in cash, up $6.3 million from the end of the prior quarter. Rabinowitz also said the amount outstanding on the company’s line of credit declined by $5.2 million during the quarter, resulting in an $11.6 million net increase in cash, though the financial statements reflected less change due to share repurchases and other cash uses. During the year, the company purchased about 1.1 million shares for cancellation for $4.9 million, and over the last two NCIB programs it purchased about 1.8 million shares for cancellation at a total investment of $8.1 million.
The company’s credit facility was described as CAD 35 million, with CAD 2.7 million outstanding at year-end and room to expand if strategic opportunities arise. Rabinowitz also said inventories decreased $1.6 million during fiscal 2025 and were down $8.1 million since peaking in Q2 2023.
Product momentum: Falcon X2, Kraken X1, and a new sports partnership
Wicha highlighted several product and market developments during fiscal 2025. He said the company launched the Kraken X1 (KX1), an AI-based hardware tactical edge processor for defense, military, and ISR markets, which he said has been “extremely well received” and leverages NVIDIA chip technology for real-time AI-enabled encoding.
He also said Haivision showcased its next-generation transmitter platform, Falcon X2, at the NAB Show and is now shipping the product “in volume.” Wicha said early demand has outstripped the company’s initial production plans and that Haivision is increasing inventory and supply chain support to meet demand. He described Falcon as the most successful product launch in the company’s history, citing customer interest in private 5G networks and more efficient MIMO antennas, particularly in Europe.
Haivision also announced it has been selected as the official video encoder of Minor League Baseball. Wicha said Makito will play a role in contribution from minor league stadiums and delivery of over 8,000 games for streaming and TV, calling the partnership a vote of confidence that expands the company’s reach across North America.
Guidance reaffirmed; long-term margin target framed as a 2027 objective
Management reiterated confidence in fiscal 2026. Wicha reconfirmed guidance for CAD 150 million-plus in revenue, and Rabinowitz said the company anticipates leveraging “relatively flat operating expenses” with Adjusted EBITDA expected to grow by at least 50%.
During Q&A, Rabinowitz and Wicha addressed questions about the path to 20% EBITDA margins. They noted that the company’s strongest quarter is typically Q4, aligned with U.S. government year-end spending, and that quarterly revenue is not expected to hold at $40 million every quarter. Rabinowitz said the company is “being cautiously optimistic” and that while a 50% increase in EBITDA is considered “very doable,” full-year margins could still be below 20% due to seasonal revenue mix. Wicha added that, on a full-year basis, 2027 is the target to reach the 20% level.
Management also discussed revenue mix, describing the business as roughly split into thirds across broadcast, defense-related applications, and enterprise/government/control room markets (with some classification overlap, such as government projects that could also be considered defense). Wicha also pointed to strong pipeline activity in banking tied to cybersecurity-driven control room deployments, alongside long-duration programmatic defense and government opportunities.
On manufacturing and tariffs, Rabinowitz said Haivision’s proprietary products are covered by the USMCA trade agreement with no tariffs on products manufactured in Canada and sold into the U.S., and that next-generation transmitter products will be manufactured in North America, which he said mitigates the impact of 15% tariffs and could represent a competitive advantage versus overseas-manufacturing competitors.
In another Q&A topic, Rabinowitz said management has raised the idea of more aggressive share repurchases with the board and that the board has asked management to prepare a more specific program for discussion at the next meeting. He said the company intends to renew its NCIB for 2026 and beyond, while noting the board maintains a conservative approach given the company’s size.
Finally, Wicha said the company is focused on space-related opportunities and cited SpaceX, Blue Origin, and NASA as major customers, adding that Haivision is developing new technologies expected to be announced later in the year related to next-generation video distribution for customers such as NASA.
About Haivision Systems (TSE:HAI)
Haivision Systems Inc is a provider of infrastructure solutions for the video streaming market, servicing enterprises and governments globally. The organizations use company solutions to communicate, collaborate and educate customers and stakeholders. It delivers high quality, low latency, secure and reliable video through the entire IP video lifecycle, using a broad range of software, hardware, and services. Its geographical segments are Canada, International, and the United States, of which the majority of its revenue comes from the United States.
