Quarterhill Inc. (QTRHF)

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AI: Fair-priced

Canadian issuer, OTC identity and transportation technologyFACT: Quarterhill is a Canadian intelligent-transportation-systems company. QTRHF represents its ordinary common shares on OTCQX, while the same share class trades primarily on the Toronto Stock Exchange as QTRH.

FACT: Quarterhill Inc., CIK 0001518419, is a Canadian issuer reporting primarily under Canadian securities requirements through SEDAR+. QTRHF is its U.S. OTC trading symbol, not a Nasdaq or NYSE listing, separate U.S. corporation, depositary receipt or different economic share class. Financial results are reported in USD unless otherwise indicated, while its September financing was denominated in CAD. Operations encompass electronic tolling, roadside sensors, commercial-vehicle screening, weigh-in-motion, traffic-data collection, automated enforcement and associated software platforms. Key operations include Electronic Transaction Consultants and International Road Dynamics. Products and services combine roadside hardware, system integration, software, transaction processing, monitoring and multiyear maintenance. INFERENCE: Government contracts and established deployments create replacement and recurring-service opportunities, but substantial project implementation revenue remains sensitive to procurement and installation schedules.

Revenue, contract backlog, recurring services and marginsFACT: Q2 2026 revenue was $42.51M, down 1.3% year over year, while gross margin improved to 28.6% from 14.7%. Standalone backlog was $415M at June 30.

FACT: First-half revenue increased 5.4% to $81.13M from $76.96M. Q2 gross profit rose to $12.16M from $6.34M, supported by restructuring, improved tolling contract economics and stronger commercial-vehicle and enforcement performance. Q2 adjusted EBITDA reached $4.6M, an approximately 11% margin, versus negative $2.7M a year earlier. First-half adjusted EBITDA was $6.65M, compared with negative $6.12M. Q2 GAAP net loss remained $5.57M, with operating expenses of $17.4M. FACT: Management's $415M backlog is a non-IFRS measure covering contracted or reasonably assured work and certain expected extensions, potentially extending across 15 years. It is not equivalent to annual recurring revenue or guaranteed near-term sales. A separately verified annual maintenance revenue percentage or customer retention rate was unavailable. INFERENCE: Long contracts improve visibility, but government funding, milestone acceptance, expected renewals, change orders and contract-margin estimates can materially alter realized revenue and earnings.

Debt, free cash flow, financing and acquisition integrationFACT: June cash was $26.22M and carrying-value borrowings, including convertible debentures, totaled approximately $66.60M. September's CAD51.75M equity financing substantially changed liquidity and dilution.

FACT: June 30 financing liabilities included $39.79M convertible debentures, $26.25M long-term debt and $0.56M current long-term debt, excluding $4.07M lease liabilities. First-half operating cash flow was positive $0.26M, versus negative $8.19M a year earlier. Purchases of equipment totaled $0.74M and capitalized software development $4.16M. INFERENCE: Simplified first-half free cash flow including capitalized software was negative $4.64M. The $5.7M Q2 operating cash inflow is encouraging but is not a reliable annual run rate. FACT: On September 16, Quarterhill issued 20,867,100 common shares at CAD2.48, raising CAD51.75M gross, with proceeds intended for corporate purposes, debt repayment and growth including acquisitions. The offering increases outstanding shares materially relative to June weighted-average shares of approximately 120.5M. FACT: June 30 signed acquisition terms contemplate buying substantially all Conduent tolling-solutions assets for $70M cash plus shares representing approximately 7% of post-closing outstanding equity. MANAGEMENT EXPECTATION: Closing in Q4 2026 and subsequent integration. INFERENCE: Post-closing liquidity, net debt, financing costs, ownership and cash conversion cannot be inferred reliably from the June balance sheet plus gross offering proceeds alone. Systems integration, employee retention, contract novations, legacy technology and deferred project obligations create material acquisition risks.

Valuation, government concentration and execution risksINFERENCE: At the October 26 $1.99 OTC close and approximately 141.4M estimated post-placement shares, indicative equity value is $281M, before acquisition-share issuance.

INFERENCE: The share count uses approximately 120.5M June weighted-average shares plus 20.87M September-issued shares; it is not a verified October 28 outstanding-share total. June net debt was approximately $40.4M, excluding leases and subsequent financing. Combining this outdated net debt with post-placement equity capitalization would give an inconsistent enterprise valuation, so no definitive current EV/EBITDA multiple is asserted. MANAGEMENT EXPECTATION: The Conduent acquisition would approximately triple tolling revenue, establish combined backlog near $2B, generate pro forma annual revenue exceeding $400M and support adjusted EBITDA margins of 10%–15%. These projections are not achieved results and exclude execution uncertainty. INFERENCE: The $281M indicative equity value equals about 0.70x management's projected minimum combined annual revenue, but acquisition financing, share issuance and closing uncertainty invalidate direct standalone comparisons. Competitors include major transportation-systems integrators, electronic-tolling providers and roadside-enforcement technology vendors. Risks include concentrated government customers, competitive procurement, contract disputes, cybersecurity, data privacy, roadside installation delays, fixed-price overruns, maintenance obligations, foreign-exchange movements, acquisition integration and OTC trading liquidity. No independently substantiated contemporaneous peer multiple or property-specific intrinsic-value estimate was available.

AI: News

October 15: LA Metro ExpressLanes modernization contractFACT: Quarterhill announced selection for a $28.2M subcontract supporting Los Angeles County Metropolitan Transportation Authority's ExpressLanes back-office modernization.

FACT: The company identified BRiC-TPS, LLC as prime-contract counterparty for the subcontract supporting customer-account management and electronic tolling operations. The announcement expands Quarterhill's U.S. tolling systems footprint while its Conduent acquisition remains pending. INFERENCE: The award improves project revenue visibility and demonstrates competitive positioning, but recognized revenue, margins and cash receipts will depend on implementation milestones, contractual acceptance and project execution. The award is not recurring annual revenue and should not automatically be added to June backlog without confirming whether it was already included.

September 16–24: Equity financing closes and UK product certification advancesFACT: Quarterhill closed a CAD51.75M bought-deal common-share placement September 16 and announced a TOPAS-registered UK traffic-intersection solution September 24.

FACT: The financing comprised 20,867,100 common shares issued at CAD2.48 each. Insiders subscribed for 806,500 shares, approximately CAD2.0M gross, under disclosed Canadian related-party exemptions. Proceeds were earmarked for working capital, debt repayment, acquisitions and growth. The September 24 announcement described a TOPAS-registered intersection solution for UK traffic-control applications. INFERENCE: Fresh equity supports acquisition financing and product development but dilutes existing ownership. UK certification creates a procurement opportunity rather than confirmed sales or guaranteed market share. The pending Conduent transaction remains the most consequential corporate catalyst.

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	2018	2017	2016	2015	2014	2013	2012	2011	2010
Revenue	$77.4M	$134.7M	$92.9M	$102.9M	N/A	N/A	$88.0M	$105.8M	$49.2M
Gross profit	N/A	$85.4M	$63.0M	$32.5M	N/A	N/A	$32.0M	$33.3M	$23.1M
Gross margin	N/A	63.40%	67.84%	31.55%	N/A	N/A	36.41%	31.51%	46.98%
Research & development	$3.6M	$3.3M	N/A	$2.4M	$2.4M	$2.9M	$20.2M	$19.6M	N/A
Operating expenses	N/A	$75.2M	$44.0M	$15.9M	$78.2M	$107.1M	$72.5M	$104.6M	$68.5M
Operating income	−$58.5M	$10.2M	$19.0M	$16.5M	$20.1M	−$18.9M	$15.5M	$1.2M	−$19.3M
Operating margin	−75.52%	7.59%	20.43%	16.07%	N/A	N/A	17.60%	1.11%	−39.11%
EBITDA	−$31.3M	$36.2M	$53.6M	$54.7M	$55.2M	$10.8M	$41.2M	$24.0M	$1.5M
EBITDA margin	−40.44%	26.88%	57.74%	53.17%	N/A	N/A	46.81%	22.64%	3.13%
Net income	−$49.1M	$10.2M	$11.1M	$10.0M	$9.7M	−$18.1M	−$14.5M	$31.8M	−$21.6M
Net profit margin	−63.46%	7.59%	11.90%	9.76%	N/A	N/A	−16.51%	30.05%	−43.89%
Basic EPSper basic share	-$0.41	$0.09	$0.09	$0.08	$0.08	-$0.15	-$0.12	$0.26	-$0.21
Diluted EPSper diluted share	-$0.41	$0.09	$0.09	$0.08	$0.08	-$0.15	-$0.12	$0.25	-$0.21

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Owners

Reported shareholders

Reference date Jun 30, 2026

Reported holdings Number of shares

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Top 2 reported holders of QTRHF
Holder	Shares held
Ancora Advisors LLC	21.66K
Comprehensive Financial Planning, Inc./PA	8.85K

Bars compare reported share counts. A matching total for this share class and reporting period is unavailable, so percentages are not shown.

Source: SEC Form 13F ↗Updated Oct 21, 2026 · Quarterly data

Insider buys & sells

Oct 1, 2024–Sep 30, 2026

Buys0$0.00 disclosed value

Sells (SEC code S)0$0.00 disclosed value

No insider transactions transactions were reported in the stored SEC coverage.

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