Posts year-over-year MAU and Adjusted EBITDA growth
Adjusted EBITDA Margin expands to 32% with 81% Free Cash Flow Conversion
Revenue increased 20% from Q1, outpacing seasonal trends

Unless otherwise stated, all amounts are in US dollars.

Company Website: https://www.verticalscope.com/
TORONTO -- (Business Wire)

VerticalScope Holdings Inc. (“VerticalScope” or the “Company”) (TSX: FORA; OTCQX: VFORF), a technology company that has built and operates a cloud-based digital platform for online enthusiast communities, today announced financial results for the second quarter ended June 30, 2026 ("Q2" or "the quarter").

"Q2 delivered the gains we've been building toward and marked a turning point," said Chris Goodridge, CEO of VerticalScope. "Revenue grew 20% over Q1, which outpaced our typical seasonal growth patterns, while Adjusted EBITDA grew both sequentially and year-over-year, with margins expanding to 32%. MAU also increased by 14%. Our results highlight our core fundamentals: a high-intent audience, a cost base we rigorously optimize, and a disciplined cash-generating model.”

"We are growing our investments in AI and we’re starting to see that reflected in our results,” added Mr. Goodridge. "AI is driving improvement in programmatic monetization and is powering new Fora commerce experiences, contributing new sources of revenue. AI is also making us a more efficient business, helping us reduce our operating expenses by re-aligning our workforce, and invest into our applied AI work with AltaML, where the agentic workflows being created are expected to deliver growth and further efficiency."

Financial Highlights for the Three Months Ended June 30, 2026 ("Q2 2026"). All comparatives, unless otherwise noted, are versus the same period in the prior year.

• Revenue grew 20% sequentially from Q1 to $13.8M, exceeding typical seasonal patterns, and declined 5% year-over-year. The improvement was led by programmatic advertising, including contributions from AudienceEngine, and continued growth in direct advertising.

• Net loss narrowed to $0.8M, or ($0.04) per share, from $1.8M in the prior year, as operating expenses declined $2.1M. The result includes $4.0M in non-cash depreciation and amortization. Excluding these charges, underlying operations remained profitable and cash flow positive.

• Adjusted EBITDA grew 4% to $4.5M, with Adjusted EBITDA Margin expanding to 32% from 30%. The improvement reflects the cost savings executed in April and early efficiencies from expanding applied AI use across the organization.

• Liquidity remained strong at $75.3M, including $7.3M in unrestricted cash, after repaying $12.0M in debt during the quarter. Free Cash Flow was $3.6M, representing an 81% conversion from Adjusted EBITDA, reflecting $0.4M of planned investment in AI initiatives.

“Our balance sheet is doing exactly what we built it to do,” said Vince Bellissimo, CFO of VerticalScope. “In the quarter, we converted 81% of Adjusted EBITDA into Free Cash Flow, inclusive of $0.4 million in applied AI capital investments. Year-to-date, we have reduced debt by $6 million, reflecting a $12 million repayment in Q2, offset by our $6 million July draw to fund our strategic investment in AltaML via a secured promissory note and warrant. While operating cash flow reflects receivables growth as AudienceEngine scales, those balances convert quickly to cash. Our near-term capital priorities remain unchanged: grow our high-conviction AI investments and continue to strengthen our balance sheet.”

Selected Business Performance Information

Earnings Conference Call and Webcast

Management will host a conference call and webcast to discuss the Company's financial results at 8:00 a.m. ET on Friday, August 14, 2026.

Live Call Registration and Webcast: https://www.netroadshow.com/events/login/1PeTHmohOPwo1FwQg6j37HZoSO27hjT2AOYLt

Joining Live by Telephone:
Canada: 1 833 950 0062
United States: 1 833 470 1428
Participant Access code: 266510

If you are unable to join live, an archived recording of the webcast will be available at: https://investors.verticalscope.com/.

Related Party Matters

The Company's applied AI engagement and investment with AltaML, as previously disclosed, are related party transactions. Cory Janssen, a director of the Company, is the Chief Executive Officer of AltaML. Mr. Janssen did not participate in the Board of Directors' approval of either transaction. Both transactions were negotiated at arm's length and on commercially reasonable terms. For additional details, including applicable exemptions under Multilateral Instrument 61-101, refer to the Company's condensed consolidated interim financial statements for the three and six months ended June 30, 2026.

About VerticalScope Holdings Inc.

Founded in 1999 and headquartered in Toronto, Ontario, VerticalScope is a technology company that has built and operates a cloud-based digital platform for online enthusiast communities in high consumer spending categories. VerticalScope's mission is to enable people with common interests to connect, explore their passions, and share knowledge about the things they love. Through targeted acquisitions and development, VerticalScope has built a portfolio of over 1,200 online communities and approximately 100 million monthly active users.

Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable securities legislation that reflects the Company's current expectations regarding future events. When used in this news release, words such as “should”, “could”, “intended”, “expect”, “plan” or “believe” and similar expressions indicate forward-looking statements. Forward-looking information, including the Company’s plans for organic growth, deployment of capital, investments in our platform, the growth of revenue and MAU, information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, plans and objectives, is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the Company's control.

Forward-looking information in this release includes statements about the Company's positioning and outlook for 2026, expected stabilization and growth in MAU and direct advertising revenue, cost actions executed during the quarter, the Company's ability to apply AI and agentic workflows across its platform and operations to improve monetization and drive operating leverage, the expected impact of the Company's applied AI engagement with, and investment in AltaML, the Company's ability to scale new AI-enabled commerce experiences and other new products and achieve projected revenue or contribution levels, the Company's capital allocation priorities (including debt repayment and balance sheet flexibility), the Company's ability to pursue selective M&A opportunities, and the performance of the Company's business model. Although the Company believes that its expectations reflected in these forward-looking statements are reasonable, such statements involve risks and uncertainties and no assurances can be given that actual results will be consistent with these forward-looking statements. Such risks and uncertainties include, but are not limited to, the implementation and effectiveness of the Company's capital allocation strategy, the availability of high-quality M&A opportunities, dependence on search algorithms and third-party traffic sources, the Company's reliance on third-party media-buying, monetization, and distribution platforms in connection with its traffic diversification initiatives, and changes to the policies, algorithms, or commercial terms of those platforms, the impact of artificial intelligence on search behavior, content discovery patterns and user traffic, the Company's ability to adapt its platform and monetization strategies to AI-mediated discovery, opportunities to monetize content through data licensing arrangements, potential disruption from artificial intelligence technologies, the Company's ability to realize the anticipated benefits of its applied AI engagement with, and investment in, AltaML and its broader AI initiatives, including operating leverage and cost savings, the Company's ability to scale new products and achieve projected revenue or EBITDA contribution levels, evolving privacy and data regulations, macroeconomic conditions affecting advertiser spending, changes in international trade policy and tariffs and their potential impact on advertiser spending and consumer behavior, regional and global geopolitical instability, including armed conflicts in the Middle East and their potential impact on the Company's Israeli operations, personnel, and asset valuations, the Company’s ability to grow its direct user base, the Company's ability to protect and enforce its intellectual property rights, including against unauthorized use of its content by artificial intelligence companies and other third parties, the outcome, costs, timing and impact of any current or future litigation, regulatory proceedings, or enforcement actions, including those relating to the use of the Company's content by third parties, and the factors discussed under "Risk Factors" in the Company’s Annual Information Form dated March 31, 2026, which is available on the Company’s profile on SEDAR Plus at https://sedarplus.ca. Actual results could differ materially from those projected herein. VerticalScope does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required under applicable securities laws.

Non-IFRS Measures

This news release references certain non-IFRS measures, including Adjusted EBITDA, Adjusted EBITDA Margin, Free Cash Flow, and Free Cash Flow Conversion as described below. This news release also makes reference to MAU, which is an operating metric used in our industry. These non-IFRS measures are not recognized measures under IFRS and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the Company’s financial information reported under IFRS.

The Company uses non-IFRS measures including:

“EBITDA” is calculated as net income (loss) excluding interest, income tax expense (recovery), and depreciation and amortization.

“Adjusted EBITDA” is calculated as EBITDA adjusted for share-based compensation, unrealized gains or losses from changes in fair value of derivative financial instruments, severance, other income, gain or loss on sale of assets, foreign exchange loss (gain), realized and unrealized other loss (gain) and other charges that include direct and incremental business acquisition related costs.

“Adjusted EBITDA Margin” measures Adjusted EBITDA as a percentage of revenue.

“Free Cash Flow” means Adjusted EBITDA less capital expenditures and income taxes paid during the period.

“Free Cash Flow Conversion” is equal to Free Cash Flow for the period divided by Adjusted EBITDA for the period.

“Monthly Active Users” (“MAU”) measures the total audience reach across the Company’s network and is defined as the sum of unique individuals who visit our communities and content within a calendar month. This metric is based on data, including as measured by Google Analytics, subject to adjustments by the Company to identify and exclude bot traffic, scrapers, and non-human activity. These processes may not capture all non-human traffic. To calculate average MAU for a multi-month period, we sum the total MAU for each month and divide by the number of months in that period. Our MAU reflects both organic visitors and traffic acquired through paid audience-acquisition, creating a blended audience across our enthusiast communities and specialized content properties. Because of this composition, MAU is not solely indicative of community engagement and should be evaluated together with our other operating metrics and results.

Related Links
http://www.verticalscope.com

The following table sets forth a reconciliation of Adjusted EBITDA and Free Cash Flow to net loss:

View source version on businesswire.com: https://www.businesswire.com/news/home/20260813832794/en/

Contacts:

For further information
Investor and media inquiries:

VerticalScope — Vincenzo Bellissimo, Chief Financial Officer
Tel: 416-341-7166, IR@verticalscope.com

Source: VerticalScope Holdings Inc.