16:01 ET Coveo Reports Third Quarter Fiscal 2026 Financial Results

SaaS Subscription Revenue(1) of $36.6 million, exceeding guidance Achieved record new business bookings Continued strength across Gen AI and Commerce offerings, from new and existing customers Coveo reports in U.S. dollars and in accordance with International Financial Reporting Standards ("IFRS") , /PRNewswire/ - Coveo (TSX: CVO), the leader in AI-Relevance, delivering best-in-class search and generative experiences, today announced financial results for its third quarter of fiscal year 2026 ended December 31, 2025. "I am pleased to report that we achieved the highest level of new business bookings in the company's history" said Laurent Simoneau, Co-Founder and CEO of Coveo. "We saw strong performance from all our important growth drivers, including our Gen AI and Commerce offerings, and welcomed many new marquee enterprise customers. Our success this quarter underscores our increasing strategic importance within the enterprise AI technology stack." "Coveo is uniquely positioned to deliver trusted AI experiences where scale, accuracy and governance matter," said Louis Têtu, Executive Chairman of Coveo. "The strong demand we saw this quarter continues to validate our strategy in this quickly evolving market." Third Quarter and Year-to-Date Fiscal 2026 Summary Financial Highlights The following table summarizes our financial results for the third quarter of fiscal year 2026: In millions of U.S. Dollars, except as otherwise indicated Q3 2026 Q3 2025 Change YTD FY2026 YTD FY2025 Change SaaS Subscription Revenue(1) $36.6 $32.3 13 % $106.6 $94.0 13 % Coveo core Platform(2) $35.8 $31.1 15 % $103.9 $89.7 16 % Qubit Platform(3) $0.8 $1.2 (30 %) $2.8 $4.3 (35 %) Total revenue $38.0 $34.0 12 % $110.9 $98.9 12 % Gross margin 78 % 78 % - 78 % 79 % (1 %) Product gross margin 81 % 82 % (1 %) 81 % 82 % (1 %) Net Income (loss) ($7.2) $4.0 (278 %) ($26.6) ($7.4) 258 % Adjusted EBITDA(4) ($0.2) $0.6 (134 %) ($1.6) $0.3 (576 %) Cash flows from operating activities $0.5 ($0.2) 348 % ($3.2) $4.3 (176 %) Third Quarter Fiscal 2026 Financial Highlights(All comparisons are relative to the three-month period ended December 31, 2024, unless otherwise stated) SaaS Subscription Revenue(1) of $36.6 million, an increase of 13% compared to $32.3 million. Within this, SaaS Subscription Revenue for Coveo's core Platform(2) was $35.8 million, an increase of 15%. Total revenue was $38.0 million compared to $34.0 million, an increase of 12%. Gross margin was 78% and Product gross margin was 81%, both broadly in line with the prior period. Operating loss was $6.3 million compared to $5.4 million. Net loss was $7.2 million compared to net income of $4.0 million in the prior period. Adjusted EBITDA(4) was ($0.2) million compared to $0.6 million last year. Cash flow from operating activities was $0.5 million compared to ($0.2) million in the prior year. Cash and cash equivalents were $100.8 million as of December 31, 2025. Net Expansion Rate(1) of 102% as of December 31, 2025. Net Expansion Rate(1) was 105% excluding customer attrition from customers using the Qubit Platform(5), in line with last year. During the quarter, Coveo purchased for cancellation ~1.1 million subordinate voting shares at a weighted average price of C$6.13 per share, for total consideration of $4.7 million, under its normal course issuer bid. Other Business and Subsequent Developments Record new business performance Coveo achieved the highest new bookings performance in the company's history. This performance was driven across all primary solution areas, and included Coveo's largest new customer win to date with a Fortune 500 global leader in the industrial sector. New bookings were diversified across land and expand transactions. Key growth drivers show continued momentum Generative AI solutions drove more than 25% of new bookings for the quarter. During the quarter, Coveo added new customers and expanded usage with existing customers of its Generative AI Solutions, including: Boston Scientific, Deloitte Digital, Tyler Technologies, Roper St.Francis Healthcare, Wind River Systems, and several more. Another record quarter for Commerce new business bookings, which accounted for nearly half of all new business bookings, influenced in part from the ongoing success of the company's SAP partnership. Marquee Commerce customers were added during Q3, including Insight Enterprises, Total Tools, La Vie en Rose, Metcash, Hugendubel Digital GmbH & Co., Tarkett S.A., Shorr Packaging Corp., and more. Continued innovation During the quarter, Coveo introduced RAG-as-a-Service for AWS Agentic AI Services, allowing organizations to seamlessly ground AWS agentic AI services including Amazon Bedrock AgentCore, Amazon Bedrock Agents and Amazon Quick Suite in their organizational knowledge using the new Coveo hosted MCP Server. Coveo also launched the Coveo app for ChatGPT by OpenAI. Coveo now allows business users to query their enterprise data in natural language, with responses grounded in permission-aware, up-to-date, accurate and relevant content – powered by the Coveo AI-Relevance™ platform. Partnership with Government of Canada to modernize public service with AI On December 17th, Coveo and the Government of Canada jointly announced the execution of a non-binding Memorandum of Understanding to modernize Canada's public service with AI, and boost innovation and adoption of AI in Canada. Financial Outlook SaaS Subscription Revenue and Total Revenue for the year are now expected to be at the upper end of our previously announced guidance ranges. We now expect SaaS Subscription Revenue(1), Total Revenue, and Adjusted EBITDA(4) for Q4 FY'26 and the Full Year FY'26 to be: Q4 FY'26 FY'26 SaaS Subscription Revenue(1) $35.6 – $36.1 million $142.2 – $142.7 million Total Revenue $37.1 – $37.6 million $148.0 – $148.5 million Adjusted EBITDA(4) Approximately breakeven Approximately breakeven The company expects to deliver positive operating cash flows for the full fiscal year. These statements are forward-looking and actual results may differ materially. Coveo's outlook constitutes "financial outlook" within the meaning of applicable securities laws and is provided for the purpose of, among other things, assisting investors and others in understanding certain key elements of our expected financial results, as well as our objectives, strategic priorities and business outlook, and in obtaining a better understanding of our anticipated operating environment. Investors and others are cautioned that it may not be appropriate for other purposes. Please refer to the "Forward-Looking Information" and "Financial Outlook Assumptions" sections below for additional information on the factors that could cause our actual results to differ materially from these forward-looking statements and a description of the assumptions underlying same. Q3 Conference Call and Webcast Information Coveo will host a conference call today at 5:00 p.m. Eastern Time to discuss its financial results for the third quarter of fiscal year 2026. The call will be hosted by Laurent Simoneau, Co-Founder & Chief Executive Officer, Louis Têtu, Executive Chairman, Brandon Nussey, Chief Financial Officer, and Karine Hamel, Incoming Interim Chief Financial Officer. Conference Call: https://emportal.ink/4jtuack Use the link above to join the conference call without operator assistance. If you prefer to have operator assistance, please dial: 1-888-699-1199 Live Webcast: https://app.webinar.net/r5GX8lAzKwo Webcast Replay: ir.coveo.com under the "News & Events" section Non-IFRS Measures and Ratios Coveo's unaudited condensed interim consolidated financial statements have been prepared in accordance with IFRS as issued by the International Accounting Standards Board. The information presented in this press release includes non-IFRS financial measures and ratios, namely (i) Adjusted EBITDA; (ii) Adjusted Gross Profit, Adjusted Product Gross Profit, and Adjusted Professional Services Gross Profit (collectively referred to as our "Adjusted Gross Profit Measures"); (iii) Adjusted Gross Margin, Adjusted Product Gross Margin, and Adjusted Professional Services Gross Margin (collectively referred to as our "Adjusted Gross Margin Measures"); (iv) Adjusted Sales and Marketing Expenses, Adjusted Research and Product Development Expenses, and Adjusted General and Administrative Expenses (collectively referred to as our "Adjusted Operating Expense Measures"); and (v) Adjusted Sales and Marketing Expenses (%), Adjusted Research and Product Development Expenses (%), and Adjusted General and Administrative Expenses (%) (collectively referred to as our "Adjusted Operating Expense (%) Measures"). These measures and ratios are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures and ratios are provided as additional information to complement IFRS measures by providing further understanding of the company's results of operations from management's perspective. Accordingly, these measures and ratios should not be considered in isolation nor as a substitute for analysis of the company's financial information reported under IFRS. Adjusted EBITDA, the Adjusted Gross Profit Measures, the Adjusted Gross Margin Measures, the Adjusted Operating Expense Measures, and the Adjusted Operating Expense (%) Measures are used to provide investors with supplemental measures and ratios of the company's operating performance and thus highlight trends in Coveo's core business that may not otherwise be apparent when relying solely on IFRS measures and ratios. The company's management also believes that securities analysts, investors, and other interested parties frequently use non-IFRS financial measures and ratios in the evaluation of issuers. Coveo's management uses non-IFRS financial measures and ratios in order to facilitate operating performance comparisons from period to period, and to prepare annual operating budgets and forecasts. See the "Non-IFRS Measures" section of our MD&A for the quarter ended December 31, 2025, which is available as of the date hereof under our profile on SEDAR+ at www.sedarplus.ca for a description of these measures. Please refer to the financial tables appended to this press release for additional information including a reconciliation of (i) Adjusted EBITDA to net loss; (ii) Adjusted Gross Profit to gross profit; (iii) Adjusted Product Gross Profit to product gross profit; (iv) Adjusted Professional Services Gross Profit to professional services gross profit; (v) Adjusted Sales and Marketing Expenses to sales and marketing expenses; (vi) Adjusted Research and Product Development Expenses to research and product development expenses; and (vii) Adjusted General and Administrative Expenses to general and administrative expenses. Key Performance Indicators This press release refers to "SaaS Subscription Revenue" and "Net Expansion Rate". They are operating metrics used in Coveo's industry. We monitor our key performance indicators to help us evaluate our business, measure our performance, identify trends, formulate business plans, and make strategic decisions. Our key performance indicators provide investors with supplemental measures of our operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS measures. We also believe that securities analysts, investors, and other interested parties frequently use industry metrics in the evaluation of issuers. Certain of our key performance indicators are measures that do not have any standardized meaning prescribed by IFRS Accounting Standards and therefore may not be comparable to similar measures presented by other issuers and cannot be reconciled to a directly comparable IFRS measure. Our key performance indicators may be calculated and designated in a manner different than similar key performance indicators used by other companies. "SaaS Subscription Revenue" means the company's SaaS subscription revenue, as presented in our financial statements in accordance with IFRS. "Net Expansion Rate" is calculated by considering a cohort of customers at the end of the period 12 months prior to the end of the period selected and dividing the SaaS Annualized Contract Value ("SaaS ACV", as defined below) attributable to that cohort at the end of the current period selected, by the SaaS ACV attributable to that cohort at the beginning of the period 12 months prior to the end of the period selected. Expressed as a percentage, the ratio (i) excludes any SaaS ACV from new customers added during the 12 months preceding the end of the period selected; (ii) includes incremental SaaS ACV made to the cohort over the 12 months preceding the end of the period selected; (iii) is net of the SaaS ACV from any customers whose subscriptions terminated or decreased over the 12 months preceding the end of the period selected; and (iv) is currency neutral and as such, excludes the effect of currency variation. In this section and throughout this press release, "SaaS Annualized Contract Value" or "SaaS ACV" means the SaaS annualized contract value of a customer's commitments calculated based on the terms of that customer's subscriptions, and represents the committed annualized subscription amount as of the measurement date. Please also refer to the "Key Performance Indicators" section of our latest MD&A, which is available under our profile on SEDAR+ at www.sedarplus.ca, for additional details on the abovementioned key performance indicators. Forward-Looking Information This press release contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities laws, including with respect to Coveo's "financial outlook" (within the meaning of applicable securities laws) and related assumptions (as set forth below and elsewhere in this press release) for the three months and the year ending March 31, 2026 (for greater certainty, for operating cash flows, solely the year ending March 31, 2026), expectations regarding bookings performance for fiscal 2026, and our non-binding partnership with the Government of Canada (collectively, "forward-looking information"). This forward-looking information is identified by the use of terms and phrases such as "may", "would", "should", "could", "might", "will", "achieve", "occur", "expect", "intend", "estimate", "anticipate", "plan", "foresee", "believe", "continue", "target", "opportunity", "strategy", "scheduled", "outlook", "forecast", "projection", or "prospect", the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. In addition, any statements that refer to expectations, intentions, projections, or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates, and projections regarding future events or circumstances. Forward-looking information is necessarily based on a number of opinions, estimates, and assumptions (including those discussed under "Financial Outlook Assumptions" below and those discussed immediately hereunder) that we considered appropriate and reasonable as of the date such statements are made. Although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, actual results may vary from the forward-looking information contained herein. Certain assumptions made in preparing the forward-looking information contained in herein include, without limitation (and in addition to those discussed under "Financial Outlook Assumptions" below): our ability to capitalize on growth opportunities and implement our growth strategy; our ability to attract new customers, both domestically and internationally; our ability to expand our relationships with existing customers, and have existing customers renew their subscriptions; the success of our efforts to expand our product portfolio and market reach; our ability to maintain successful strategic relationships with partners and other third parties; market awareness and acceptance of enterprise AI solutions in general and our products in particular; the market penetration of our generative AI and other new solutions, both with new and existing customers, and our ability to continue to capture the AI opportunities; assumptions regarding our future capital requirements, and availability of capital generally; the accuracy of our estimates of market opportunity, growth forecasts, and expectations around operating cash flows; our success in identifying and evaluating, as well as financing and integrating, any acquisitions, partnerships, or joint ventures; the significant influence of our principal shareholders; our ability to generate pipeline, and to convert pipeline into bookings, and the timeframe thereof; and our ability to execute on our expansion and growth plans more generally. Moreover, forward-looking information is subject to known and unknown risks, uncertainties, and other factors, many of which are beyond our control, that may cause the actual results, level of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to macro-economic uncertainties and the risk factors described under "Risk Factors" in the company's most recently filed Annual Information Form and under "Key Factors Affecting our Performance" in the company's most recently filed MD&A, both available under our profile on SEDAR+ at www.sedarplus.ca. There can be no assurance that such forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. Accordingly, prospective investors should not place undue reliance on forward-looking information, which speaks only as of the date made. Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information. You should not rely on this forward-looking information, as actual outcomes and results may differ materially from those contemplated by this forward-looking information as a result of such risks and uncertainties. Additional information will also be set forth in other public filings that we make available under our profile on SEDAR+ at www.sedarplus.ca from time to time. The forward-looking information provided in this press release relates only to events or information as of the date hereof, and is expressly qualified in their entirety by this cautionary statement. Except as required by law, we do not assume any obligation to update or revise any forward-looking information, whether as a result of new information, future events, or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. Financial Outlook Assumptions Our financial outlook under the "Financial Outlook" section above and elsewhere in this press release is based on several assumptions, including the following, in addition to those set forth under the "Financial Outlook" section above and under the "Forward-Looking Information" section above: As previously announced, the Company has fully deprecated the Qubit Platform. Accordingly, SaaS Subscription Revenue for Q4 fiscal 2026 will only consist of Coveo core Platform(2) SaaS Subscription Revenue. Ongoing strength in bookings performance through the end of fiscal 2026. Maintaining gross retention rates(7) at their expected levels. Achieving expected levels of sales of SaaS subscriptions to new and existing customers, including timing of those sales, as well as expected levels of renewals of SaaS subscriptions with existing customers. Achieving expected levels of implementations and other sources of professional services revenue. Maintaining planned levels of operating margin represented by our Adjusted Gross Profit Measures(4) and Adjusted Gross Margin Measures(8). The market for our solutions showing ongoing improvements in customer buying behaviors. Our ability to attract and retain key personnel required to achieve our plans. Foreign exchange rates environment remaining consistent with end of Q3 levels, and similar or better inflation rates, interest rates, customer spending, and other macro-economic conditions. Our ability to collect from our customers as planned, and to otherwise manage our cash inflows (including government grants and tax credits) and outflows as we currently expect. Expected financial performance as measured by our Adjusted Operating Expense Measures(4) and Adjusted Operating Expense (%) Measures(8). Our ability to continue to successfully manage expenses in line with our plans. Our financial outlook does not include the impact of acquisitions that may be announced or closed from time to time. ***** Notes to this press release: (1) SaaS Subscription Revenue and Net Expansion Rate are Key Performance Indicators of Coveo. Please see the "Key Performance Indicators" section above. (2) SaaS Subscription Revenue earned in connection with subscriptions by customers to the Coveo core Platform for the period, and thus excluding revenue from subscriptions to the Qubit Platform. (3) SaaS Subscription Revenue earned through subscriptions to the Qubit Platform for the period covered. (4) The Adjusted Gross Profit Measures, the Adjusted Operating Expense Measures, and Adjusted EBITDA are non-IFRS financial measures which may not be comparable to similar measures or ratios used by other companies. Please see the "Non-IFRS Measures and Ratios" section above and the reconciliation tables within this release. (5) Net Expansion Rate excluding the effect of SaaS ACV attributable to subscriptions to the Qubit Platform. (6) SaaS ACV means the SaaS annualized contract value of a customer's commitments calculated based on the terms of that customer's subscriptions, and represents the committed annualized subscription amount as of the measurement date. (7) Gross retention rate ("GRR") is generally calculated for a period by subtracting SaaS ACV contractions and losses over the period selected from SaaS ACV at the beginning of the period selected and dividing the result by the SaaS ACV from the beginning of the period selected. We use GRR to provide insight into the company's success in retaining existing customers. (8) The Adjusted Gross Margin Measures, the Adjusted Operating Expense (%) Measures, and Adjusted Product Gross Margin are non-IFRS ratios. Please see the "Non-IFRS Measures and Ratios" section above and the reconciliation tables within this release. About CoveoCoveo brings superior AI-Relevance to every point-of-experience, transforming how enterprises connect with their customers and employees to maximize business outcomes. Relevance is about moving from persona to person, the degree to which the enterprise-wide content, products, recommendations, and advice presented to a person online aligns easily with their context, needs, preferences, behavior and intent, setting the competitive experience gold standard. Every person's journey is unique, and only AI can solve the complexity of tailoring experiences across massive, diverse audiences and large volumes and variety of content and products. Our Coveo AI-Relevance™ Platform enables enterprises to deliver hyper-personalization at every point-of-experience, unifying all their data securely, with the highest level of contextual and prescriptive accuracy while simultaneously optimizing business outcomes. Coveo brings AI-Relevance to the digital experiences of many of the world's premier and most innovative brands, serving millions of people across billions of interactions. Coveo is a trademark of Coveo Solutions Inc.Stay up to date on the latest Coveo news and content by subscribing to the Coveo blog, and following Coveo on LinkedIn, Twitter, and YouTube. Condensed Interim Consolidated Statements of Loss and Comprehensive Loss(expressed in thousands of U.S. dollars, except share and per share data, unaudited) Three months ended December 31, Nine months ended December 31, 2025 2024 2025 2024 $ $ $ $ Revenue SaaS subscription 36,592 32,284 106,644 94,015 Coveo core Platform 35,781 31,130 103,861 89,724 Qubit Platform 811 1,154 2,783 4,291 Professional services 1,427 1,681 4,257 4,907 Total revenue 38,019 33,965 110,901 98,922 Cost of revenue SaaS subscription 6,865 5,932 19,896 17,107 Professional services 1,349 1,410 4,358 4,039 Total cost of revenue 8,214 7,342 24,254 21,146 Gross profit 29,805 26,623 86,647 77,776 Operating expenses Sales and marketing 17,830 15,282 54,885 43,881 Research and product development 9,949 8,322 30,525 27,367 General and administrative 6,894 6,709 20,604 19,605 Depreciation of property and equipment 399 610 1,558 1,985 Amortization and impairment of intangible assets 462 743 1,391 2,205 Depreciation of right-of-use assets 533 355 1,498 1,091 Total operating expenses 36,067 32,021 110,461 96,134 Operating loss (6,262) (5,398) (23,814) (18,358) Net financial revenue (787) (1,052) (3,010) (4,040) Foreign exchange loss (gain) 1,186 (6,546) 4,645 (5,804) Income (loss) before income tax expense (recovery) (6,661) 2,200 (25,449) (8,514) Income tax expense (recovery) 527 (1,844) 1,180 (1,077) Net income (loss) (7,188) 4,044 (26,629) (7,437) Net income (loss) per share – Basic and diluted (0.08) 0.04 (0.28) (0.07) Weighted average number of shares outstanding – Basic and diluted 95,538,821 104,858,139 95,880,422 99,237,691 The following table presents share-based payments and related expenses recognized by the company: Three months ended December 31, Nine months ended December 31, 2025 2024 2025 2024 $ $ $ $ Share-based payments and related expenses SaaS subscription cost of revenue 194 241 868 601 Professional services cost of revenue 91 148 451 329 Sales and marketing 1,720 900 5,935 2,748 Research and product development 927 1,361 4,338 4,239 General and administrative 1,700 1,603 6,171 5,100 Share-based payments and related expenses 4,632 4,253 17,763 13,017 Reconciliation of Net Loss to Adjusted EBITDA(expressed in thousands of U.S. dollars, unaudited) Three months ended December 31, Nine months ended December 31, 2025 2024 2025 2024 $ $ $ $ Net income (loss) (7,188) 4,044 (26,629) (7,437) Net financial revenue (787) (1,052) (3,010) (4,040) Foreign exchange loss (gain) 1,186 (6,546) 4,645 (5,804) Income tax expense (recovery) 527 (1,844) 1,180 (1,077) Share-based payments and related expenses(1) 4,632 4,253 17,763 13,017 Amortization and impairment of intangible assets 462 743 1,391 2,205 Depreciation expenses(2) 932 965 3,056 3,076 Transaction-related expenses(3) 43 - 43 388 Adjusted EBITDA (193) 563 (1,561) 328 (1) These expenses relate to issued stock options and share-based awards under our share-based plans to our employees and directors as well as related payroll taxes that are directly attributable to the share-based payments. These costs are included in product and professional services cost of revenue, sales and marketing, research and product development, and general and administrative expenses. (2) Depreciation expenses include depreciation of property and equipment and depreciation of right-of-use assets. (3) These expenses relate to professional, legal, consulting, accounting, advisory, and other fees relating to transactions that would otherwise not have been incurred. These costs are included in general and administrative expenses. Reconciliation of Adjusted Gross Profit Measures and Adjusted Gross Margin Measures(expressed in thousands of U.S. dollars, unaudited) Three months ended December 31, Nine months ended December 31, 2025 2024 2025 2024 $ $ $ $ Total revenue 38,019 33,965 110,901 98,922 Gross profit 29,805 26,623 86,647 77,776 Gross margin 78 % 78 % 78 % 79 % Add: Share-based payments and related expenses 285 389 1,319 930 Adjusted Gross Profit 30,090 27,012 87,966 78,706 Adjusted Gross Margin 79 % 80 % 79 % 80 % Product revenue 36,592 32,284 106,644 94,015 Product cost of revenue 6,865 5,932 19,896 17,107 Product gross profit 29,727 26,352 86,748 76,908 Product gross margin 81 % 82 % 81 % 82 % Add: Share-based payments and related expenses 194 241 868 601 Adjusted Product Gross Profit 29,921 26,593 87,616 77,509 Adjusted Product Gross Margin 82 % 82 % 82 % 82 % Professional services revenue 1,427 1,681 4,257 4,907 Professional services cost of revenue 1,349 1,410 4,358 4,039 Professional services gross profit (loss) 78 271 (101) 868 Professional services gross margin 5 % 16 % (2 %) 18 % Add: Share-based payments and related expenses 91 148 451 329 Adjusted Professional Services Gross Profit 169 419 350 1,197 Adjusted Professional Services Gross Margin 12 % 25 % 8 % 24 % Reconciliation of Adjusted Operating Expense Measures and Adjusted Operating Expense (%) Measures(expressed in thousands of U.S. dollars, unaudited) Three months ended December 31, Nine months ended December 31, 2025 2024 2025 2024 $ $ $ $ Sales and marketing expenses 17,830 15,282 54,885 43,881 Sales and marketing expenses (% of total revenue) 47 % 45 % 49 % 44 % Less: Share-based payments and related expenses 1,720 900 5,935 2,748 Adjusted Sales and Marketing Expenses 16,110 14,382 48,950 41,133 Adjusted Sales and Marketing Expenses (% of total revenue) 42 % 42 % 44 % 42 % Research and product development expenses 9,949 8,322 30,525 27,367 Research and product development expenses (% of total revenue) 26 % 25 % 28 % 28 % Less: Share-based payments and related expenses 927 1,361 4,338 4,239 Adjusted Research and Product Development Expenses 9,022 6,961 26,187 23,128 Adjusted Research & Product Development Expenses (% of total revenue) 24 % 20 % 24 % 23 % General and administrative expenses 6,894 6,709 20,604 19,605 General and administrative expenses (% of total revenue) 18 % 20 % 19 % 20 % Less: Share-based payments and related expenses 1,700 1,603 6,171 5,100 Less: Transaction-related expenses 43 - 43 388 Adjusted General and Administrative Expenses 5,151 5,106 14,390 14,117 Adjusted General and Administrative Expenses (% of total revenue) 14 % 15 % 13 % 14 % Condensed Interim Consolidated Statements of Financial Position(expressed in thousands of U.S. dollars, unaudited) December 31, 2025 March 31, 2025 $ $ Assets Current assets Cash and cash equivalents 100,810 124,752 Trade and other receivables 34,288 36,564 Government assistance 10,615 6,280 Prepaid expenses 8,246 9,845 153,959 177,441 Non-current assets Contract acquisition costs 12,595 10,908 Property and equipment 3,545 4,192 Intangible assets 1,830 3,012 Right-of-use assets 13,895 5,179 Deferred tax assets 2,505 3,337 Goodwill 26,972 26,290 Total assets 215,301 230,359 Liabilities Current liabilities Trade payable and accrued liabilities 20,394 18,602 Deferred revenue 73,912 77,387 Current portion of lease obligations 2,221 1,999 Accrued liability for shares to be repurchased under automatic securities purchase plan 8,312 - 104,839 97,988 Non-current liabilities Lease obligations 13,828 5,464 Total liabilities 118,667 103,452 Shareholders' Equity Share capital 752,846 768,754 Contributed surplus 91,351 76,273 Deficit (704,458) (669,351) Accumulated other comprehensive loss (43,105) (48,769) Total shareholders' equity 96,634 126,907 Total liabilities and shareholders' equity 215,301 230,359 Condensed Interim Consolidated Statements of Cash Flows(expressed in thousands of U.S. dollars, unaudited) Nine months ended December 31, 2025 2024 $ $ Cash flows from (used in) operating activities Net loss (26,629) (7,437) Items not affecting cash Amortization of contract acquisition costs 3,671 3,248 Depreciation of property and equipment 1,558 1,985 Amortization and impairment of intangible assets 1,391 2,205 Depreciation of right-of-use assets 1,498 1,091 Share-based payments 16,782 13,528 Interest on lease obligations 399 323 Deferred income tax expense 1,070 (478) Unrealized foreign exchange loss (gain) 4,356 (5,826) Changes in operating assets and liabilities (7,342) (4,368) (3,246) 4,271 Cash flows used in investing activities Additions to property and equipment (701) (836) Additions to intangible assets (99) (17) (800) (853) Cash flows used in financing activities Proceeds from exercise of stock options 1,065 1,116 Tax withholding for net share settlement (3,656) (2,454) Payments on lease obligations (2,135) (1,869) Shares repurchased and cancelled (14,299) (46,868) Shares repurchased for settlement of share-based awards (1,513) - (20,538) (50,075) Effect of foreign exchange rate changes on cash and cash equivalents 642 (821) Decrease in cash and cash equivalents during the period (23,942) (47,478) Cash and cash equivalents – beginning of period 124,752 166,586 Cash and cash equivalents – end of period 100,810 119,108 Cash 55,357 42,875 Cash equivalents 45,453 76,233 SOURCE Coveo Solutions Inc.