Quarterhill’s bet on the emerging industrial internet of things market is showing early signs of paying off after the Ottawa-based company reported a jump in revenues and a return to profitability on Thursday.
The firm announced in April that it would be changing its name from WiLAN and branching out from its traditional patent licensing strategy. Its first two acquisitions – International Road Dynamics and Viziya – closed this past quarter, and contributed in part to the firm’s rising revenues.
Quarterhill’s total revenues for the three-month period ending June 30 were $18.6 million, an increase of 16 per cent year-over-year. Of those revenues, $12.8 million came from WiLAN’s traditional patent licensing stream – a decrease from $16 million a year ago, despite securing license agreements with Amazon and Ericsson this past quarter. (All figures in USD.)
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The remainder of the revenues were drawn from the firm’s two acquisitions, though these channels were not active for the full quarter. Interim CEO Shaun McEwan told analysts and investors during Quarterhill’s earnings call that had the two firms been secured from the start of the quarter, total revenues would have been $23.8 million.
“Even though the acquired businesses had only a partial contribution to our Q2 financials, we are already seeing the positive impact they can have on our revenue and margins,” said Mr. McEwan in a statement.
Net income for the quarter was $3.6 million, as compared to a net loss of $3.2 million a year previous. Cash on hand as of June 30 stood at $49 million, though Quarterhill (TSX:QTRH) (NASDAQ:QTRH) has already dipped into this fund for another acquisition.
The firm announced last month that it had acquired Belgium’s iCOMS Detections S.A. in a $1.1 million deal. Quarterhill called the move a “tuck-in” acquisition, planning to fold iCOMS’ radar microwaves manufacturing business into previously-acquired IRD.
The firm also announced last month that it had secured a C$5 million contract with a B.C. trucking company, providing road management, support and maintenance technology through IRD.
Quarterhill shares were down 6.3 per cent, or 11 cents, on the Toronto Stock Exchange in midday trading on Thursday.