Mr. Bill Di Nardo reports

PIVOTREE ANNOUNCES SECOND QUARTER 2026 RESULTS

Pivotree Inc. has released financial results for the three-month and six-month periods ended June 30, 2026. All amounts are expressed in Canadian dollars unless otherwise stated.

"Q2 reflects our disciplined execution, strengthening our balance sheet by adding $1.2-million of cash from operations and reaching the highest cash position since early 2023," said Bill Di Nardo, chief executive officer of Pivotree. "We are delivering cash while investing and seeing significant strategic progress as we approach the completion of converting our entire service catalogue to AI-enabled [artificial intelligence] delivery. In fact, AI-enabled delivery contributed to 22 per cent of total revenue for the quarter. Importantly, this quarter saw continued positive momentum in our qualified pipeline build, a leading indicator that positions us well as client conversations shift toward deploying AI-augmented solutions against their data."

Pivotree also announced today that it has released a letter to shareholders from Mr. Di Nardo. The letter can be accessed from the company's website and filed on SEDAR+.

Second quarter 2026 financial highlights (all figures are in Canadian dollars and all comparisons are relative to the three-month period ended June 30, 2025, unless otherwise stated):

• Net loss of $400,000, which reflects a strategic investment of $600,000 in restructuring costs aimed at optimizing the company's European footprint and structural changes to the company's product and R&D (research and development) team; the year-over-year comparison is impacted by a significant non-recurring gain of $2.4-million in the prior-year period resulting from the sale of the company's WMS (warehouse management system) technology assets;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $900,000 (7.2-per-cent margin), compared with $1.7-million (10.1-per-cent margin) in the prior-year period; this marks the company's seventh consecutive quarter of positive adjusted EBITDA, demonstrating the company's operational discipline as Pivotree transitions its revenue mix toward AI-enabled services;
• Total revenue for the quarter was $12.6-million; this result reflects the company's strategic realignment as Pivotree continues to execute the planned wind-down of legacy managed services (LMS) and complete specific system integration projects in the company's professional services segment; this pro-active evolution of Pivotree's revenue mix is a key component of the company's continuing transition toward higher-value, AI-enabled service delivery:
  • Managed and IP Solutions (MIPS) revenue decreased 5.3 per cent to $3.5-million in Q2 2026, from $3.7-million in Q2 2025, driven by the reduction in application hosting and support contracts, partially offset by increased transactional SKU (stock-keeping unit) volumes delivered to customers;
  • Legacy managed services (LMS) revenue declined 46.9 per cent to $1.6-million in Q2 2026, from $3-million in Q2 2025, related to churn and melt of Legacy Oracle customers;
  • Professional services revenue of $7.4-million, a decrease of 29.5 per cent from $10.5-million in Q2 2025; the decline was driven by the completion of certain system integration projects;
• Gross margin of 46.9 per cent, yielding gross profit of $5.9-million, compared with $8-million or 46.2 per cent of revenue for the prior-year period; the improvement in gross margin percentage reflects continued delivery discipline, automation and increased leverage of AI;
• Cash flow from operating activities generated $1.2-million compared with $700,000 for the same period in the prior year, with the benefits coming in as a result of stronger DSOs (days sales outstanding).

Second quarter 2026 business highlights:

• Commerce total contract value (TCV) bookings were primarily driven by the extension of existing professional services engagements and expansion, including a significant contract for a Shopify project. Additionally, commerce successfully secured several managed services support contract extensions during the quarter, including contracts for SAP and Oracle ATG.
• Data bookings included a three-year contract to build and optimize a customer technology road map, which will largely leverage Pivotree's AI-enabled services. Bookings continue to demonstrate deeper relationships and extension with Pivotree's existing customers across Syndigo and Stibo.
• Supply chain bookings were primarily driven by the expansion and renewal of contracts within the Fluent and Sterling OMS (order management system) platform as customers continue to value the expertise and approach to managing their OMSs. This included a $2.5-million signing, encompassing both MIPS and PS components, which was expected end of the prior quarter.

Results of operations

The following table outlines Pivotree's consolidated statements of comprehensive income (loss) for the three and six months ended June 30, 2026, and 2025.

Conference call

Management will host a live Google Meet video webinar on Tuesday, Aug. 18, 2026 at 8:30 a.m. ET to discuss these second quarter 2026 results. The webinar can be accessed through Pivotree's website.

A replay will be available approximately two hours after the conclusion of the live event and posted on Pivotree's website.

About Pivotree Inc.

Pivotree, a leader in frictionless commerce, strategizes, designs, builds and manages digital commerce, data management and supply chain solutions for over 150 major retailers and branded manufacturers globally. With a portfolio of digital products as well as managed and professional services, Pivotree provides businesses of all sizes with true end-to-end solutions. Headquartered in Toronto, Canada, with offices and customers in the Americas, EMEA (Europe, the Middle East and Africa) and Asia Pacific, Pivotree is widely recognized for its partnership with top brands across industries.

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