Coveo Reports Fourth Quarter and Fiscal 2025 Financial Results Français
Continued Generative AI momentum, with 3x y/y growth in customers
Cash Flow from Operations Activities of $11.1 million for FY25
Coveo reports in U.S. dollars and in accordance with International Financial Reporting Standards ("IFRS")
MONTREAL and SAN FRANCISCO, May 20, 2025 /CNW/ - Coveo (TSX: CVO), the leader in AI-Relevance, delivering best-in-class search and generative experiences that maximize business outcomes at every point-of-experience, today announced financial results for its fourth quarter and fiscal year 2025 ended March 31, 2025.
"We continue to see strong momentum in our business, as the market increasingly recognizes the importance of AI Search to their overall AI strategies," said Louis Têtu, Executive Chairman of Coveo. "We said that FY25 would see a market inflecting, with our customers moving from experimentation to adoption, and our results provide clear evidence of this. With strong bookings momentum seen in the past few quarters, we are now well positioned to deliver a re-acceleration of growth."
"Our customers continue to be a great source of validation for us. They are looking for tangible results and a clear ROI from their AI investments, and that is what our platform delivers. As we look ahead to fiscal year 2026, we will remain committed to delivering innovation, while focusing on customer excellence and operational discipline," said Laurent Simoneau, Co-Founder and CEO of Coveo.
Fourth Quarter and Fiscal 2025 Summary Financial Highlights
The following table summarizes our financial results for the fourth quarter and fiscal year 2025:
Fourth Quarter Fiscal 2025 Financial Highlights
(All comparisons are relative to the three-month period ended March 31, 2024, unless otherwise stated)
SaaS Subscription Revenue (1) of $32.6 million, an increase of 6% compared to $30.7 million. Within this, SaaS Subscription Revenue for Coveo's core Platform (2) was $31.6 million, an increase of 10%.
On a constant currency and constant days basis, growth in Coveo's core subscription was 12% (9).
Total revenue was $34.4 million compared to $32.6 million, an increase of 5%.
Gross margin was 79% and Product gross margin was 82%, comparable to the prior period.
Adjusted EBITDA (4) was $0.7 million compared to $0.2 million last year.
Operating loss was $7.6 million compared to $5.5 million. Net loss was $6.3 million compared to a net loss of $4.1 million.
The operating and net loss were impacted by an impairment loss of $2.9 million related to our Qubit operations as a result of the decision to formally fully deprecate the Qubit Platform. This is part of a strategic decision to concentrate R&D, sales and marketing efforts on the Coveo core Platform.
Cash flows from operating activities was $6.8 million compared to $4.6 million in the prior year.
Cash and cash equivalents were $124.8 million as of March 31, 2025.
Net Expansion Rate (1) of 103% as of March 31, 2025. Net Expansion Rate (1) improved to 107% excluding customer attrition from customers using the Qubit Platform (5), up 200 bps sequentially.
Full Year Fiscal 2025 Financial Highlights
(All comparisons are relative to the year ended March 31, 2024, unless otherwise stated)
SaaS Subscription Revenue (1) of $126.6 million compared to $118.6 million, an increase of 7%. Within this, SaaS Subscription Revenue for Coveo's core Platform (2) was $121.3 million compared to
$109.1 million, an increase of 11%.
Total revenue was $133.3 million compared to $126.1 million, an increase of 6%.
Gross margin was 79% compared to 78% in the prior period. Product gross margin was 82%, comparable to the prior period.
Adjusted EBITDA (4) was $1.0 million compared to ($2.4) million last year.
Operating loss was $25.9 million compared to $29.7 million, and net loss was $13.8 million compared to $23.6 million.
Cash flows from operating activities were $11.1 million, compared to $4.2 million in the prior year period.
Other Business Highlights
Ongoing bookings momentum:
The best Q4 new business bookings performance in the company's history.
Second half fiscal 2025 new business bookings, grew +50% over the comparable year ago period.
Diversification across both land and expand transactions, with particular strength in expansion activity. Customers who expanded their use of Coveo in the quarter included Nestlé, The Dow Chemical Company, Arm Holdings Ltd., and Cummins among others.
Coveo's Generative AI solutions saw another strong quarter:
Represented more than 25% of the company's Q4 new business bookings.
Customer count for Generative AI solutions increased ~30% sequentially and grew more than 3x from the prior year.
Customers such as Docusign selected Coveo's Generative AI solution after a competitive and extensive evaluation period where the Company demonstrated the ability to improve case deflection rates and provide tangible ROI. Other customer wins and growth across existing customers included: Okta, Athenahealth and Cymbiotika.
Customers are seeing success with Coveo's Generative AI solutions and are growing their usage. The initial cohort of customers using our Generative AI solutions are in aggregate spending >50% more on such solutions than they were initially.
Commerce momentum continues:
Ongoing momentum from the Company's SAP partnership, with Q4 being the strongest quarter of bookings originating from our SAP partnership since its inception.
Announced at SHOPTALK that Coveo is now a Shopify Premier Technology Partner and Coveo AI Search and Product Discovery for Shopify is now officially available for access in the Shopify App Store. Guillevin International selected Coveo via this partnership in the quarter for their B2B commerce experience.
Powering Agentic solutions:
Introduced Coveo for Agentforce, whereby Coveo expands its AI toolkit for developers with a suite of off-the-shelf APIs, and launched new Agentic AI Design Partner Program to make Gen AI and Agentic AI applications smarter, faster and better.
Financial Outlook
The company expects ongoing new business bookings momentum in fiscal 2026. This underpins the company's guidance, which reflects revenue growth acceleration during fiscal 2026.
Taking into account the anticipated final churn on the Qubit platform, the revenue guidance below infers that growth in Coveo's core SaaS Subscription revenue will be ~14% in Q1 of fiscal year 2026 and between 15-17% during the complete fiscal year 2026.
In light of the company's growth outlook and improved operational efficiency, Coveo is making select strategic investments in innovation and go-to-market initiatives, aimed at further accelerating our growth rates. At the same time, it remains committed to operational rigor, maintaining strong unit economics, and sustaining positive operating cash flows.
Considering these factors, Coveo anticipates SaaS Subscription Revenue (1), Total Revenue, and Adjusted EBITDA (4) for Q1 FY26 and fiscal year 2026 as follows:
The company expects to continue to deliver positive operating cash flows based on the above guidance of approximately $10 million for fiscal year 2026.
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.
Q4 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 its fourth quarter and fiscal year 2025. The call will be hosted by Louis Têtu, Executive Chairman, Laurent Simoneau, Co-Founder & Chief Executive Officer and Brandon Nussey, Chief Financial Officer.
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"); (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"), and (vi) SaaS Subscription Revenue in Coveo Core Platform at constant currency and constant days, including as a growth ratio (the "Constant Currency Measure/Ratio"). 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, the Adjusted Operating Expense (%) Measures and the Constant Currency Measure/Ratio 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 and full-year ended March 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 (except for the Constant Currency Measure/Ratio, which is defined in the tables appended to this press release). 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; (vii) Adjusted General and Administrative Expenses to general and administrative expenses, and (viii) SaaS Subscription Revenue in Coveo Core Platform at constant currency and constant days to SaaS Subscription Revenue.
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" 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. For greater certainty, for purposes of this press release, a "booking" is a binding commitment by a customer to purchase a Coveo solution. Bookings reflect annualized committed revenue under binding agreements and include transactions with new customers and increased or expanded usage of our solutions by existing customers.
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 ending June 30, 2025 and the year ending March 31, 2026, and expectations regarding the remaining Qubit SaaS ACV, bookings performance, revenue growth and operating cash flows (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; 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; our future capital requirements, and availability of capital generally; available liquidity under our credit facilities; 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 current and prospective macro-economic uncertainties, including without limitation as a result of trade and monetary policy worldwide, 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 . 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, 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:
Remaining Qubit SaaS ACV (6) will continue to churn in the first quarter of fiscal 2026 and until the end of fiscal 2026, with the revenue impact being that the SaaS Subscription Revenue (1) recognized in fiscal 2026 for subscriptions to the Qubit Platform will decline by more than half.
Accelerating Bookings performance throughout fiscal 2026.
Maintaining gross retention rates (7) at their historical 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.
Customers that are in the market continuing to prioritize and adopt AI search solutions despite macroeconomic uncertainty.
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 FY25 Q4 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 financial outlook does not include the impact of acquisitions that may be announced or closed from time to time.
Notes to this press release:
About Coveo
We strongly believe that the future is business-to-person. That experiences are today's competitive front line, a make or break for every business. We also believe that remarkable experiences not only enhance user satisfaction but also yield significant gains for enterprises. That is what we call the AI-experience advantage – the degree to which the content, products, recommendations, and advice presented to a person online aligns easily with their needs, intent, preferences, context, and behavior, resulting in superior business outcomes.
To realize this AI-experience advantage at scale, enterprises require a robust, spinal and composable infrastructure capable of unifying content securely and delivering AI search, AI recommendations, true personalization, and a trusted generative experience at every touchpoint with each individual customer, partner and employee. Coveo is dedicated to bringing this advantage to every point-of-experience, using powerful data and AI models to transform the enterprise in commerce, customer service, website, and workplace.
The Coveo platform is ISO 27001 and ISO 27018 certified, SOC2 compliant, and HIPAA compatible, with a 99.999% SLA available. We are a Salesforce AppExchange Partner, an SAP Ⓡ Endorsed App, an Adobe Technology Gold Partner, a MACH Alliance member, Optimizely Partner, Shopify Partner and a Genesys AppFoundry Ⓡ ISV Partner.
Coveo is a trademark of Coveo Solutions Inc.
Coveo blog, and following Coveo on LinkedIn, Twitter, and YouTube.
(expressed in thousands of U.S. dollars)
The following table presents share-based payments and related expenses recognized by the company:
Reconciliation of Net Loss to Adjusted EBITDA
(expressed in thousands of U.S. dollars)
(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)
Reconciliation of Adjusted Operating Expense Measures and Adjusted Operating Expense (%) Measures
(expressed in thousands of U.S. dollars)
Three months ended
March 31,
Year ended
March 31,
2025
2024
2025
2024
$
$
$
$
Sales and marketing expenses
15,734
13,953
59,615
55,099
Sales and marketing expenses (% of total revenue)
46 %
43 %
45 %
44 %
Less: Share-based payments and related expenses
959
687
3,707
2,434
Adjusted Sales and Marketing Expenses
14,775
13,266
55,908
52,665
Adjusted Sales and Marketing Expenses (% of total revenue)
43 %
41 %
42 %
42 %
Research and product development expenses
8,537
8,769
35,904
35,804
Research and product development expenses (% of total revenue)
25 %
27 %
27 %
28 %
Less: Share-based payments and related expenses
1,095
1,223
5,334
5,845
Adjusted Research and Product Development Expenses
7,442
7,546
30,570
29,959
Adjusted Research & Product Development Expenses (% of total revenue)
22 %
23 %
23 %
24 %
General and administrative expenses
5,819
6,596
25,424
26,628
General and administrative expenses (% of total revenue)
17 %
20 %
19 %
21 %
Less: Share-based payments and related expenses
1,263
1,414
6,363
6,748
Less: Transaction-related expenses
-
98
388
98
Adjusted General and Administrative Expenses
4,556
5,084
18,673
19,782
Adjusted General and Administrative Expenses (% of total revenue)
13 %
16 %
14 %
16 %
Reconciliation of SaaS Subscription Revenue and SaaS Subscription Revenue at Constant Currency and Constant Days of the Coveo core Platform
(expressed in thousands of U.S. dollars)
Three months ended
March 31, 2025
$
SaaS Subscription Revenue, as reported
32,616
SaaS Subscription Revenue in Coveo core Platform (1)
31,605
Foreign exchange impact
351
Additional SaaS Subscription Revenue Day (2) impact
336
SaaS Subscription Revenue in Coveo core Platform in constant currency and constant days
32,292
Growth at constant currency and constant days (3)
12 %
(1)
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
(2)
As defined immediately below.
(3)
Growth in SaaS Subscription Revenue in the Coveo Core Platform at constant currency and constant days means the year-over-year change in SaaS Subscription Revenue in the Coveo Core Platform at constant currency including, for the current period, the Additional SaaS Subscription Revenue Day, divided by the SaaS Subscription Revenue in the Coveo Core Platform in the prior period of $28.7 million.
In this table, SaaS Subscription Revenue in currencies other than US dollars are converted into US dollars using the exchange rates from the prior period rather than the actual exchange rates in effect during the current period. Furthermore, SaaS Subscription Revenue of the Coveo core Platform for the current period is adjusted to add the Additional SaaS Subscription Revenue Day, as the prior period had one more full day of SaaS Subscription Revenue recognition as a result of calendar year 2024 being a leap year with 366 days.
"Additional SaaS Subscription Revenue Day" means an amount equal to the SaaS Subscription Revenue of the Coveo core platform for the three-month period ended March 31, 2025, divided by the number of days in the three-month period ended March 31, 2025, and multiplied by the number of days in comparative period of fiscal year 2024.
"SaaS Subscription Revenue in Coveo Core Platform at constant currency and constant days" means the SaaS Subscription Revenue of the Company 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, adjusted for the impact of foreign currency exchange fluctuations and to reflect the Additional SaaS Subscription Revenue Day.
(expressed in thousands of U.S. dollars)
Consolidated Statements of Cash Flows
(expressed in thousands of U.S. dollars)
SOURCE Coveo Solutions Inc.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Cision Canada
2 hours ago
- Cision Canada
First National Financial Corporation agrees to be acquired by Birch Hill Equity Partners and Brookfield, with existing shareholders Stephen Smith and Moray Tawse maintaining minority ownership
TORONTO, July 27, 2025 /CNW/ - First National Financial Corporation (the "Company" or "First National") (TSX: FN) (TSX: (TSX: today announced that it has entered into a definitive arrangement agreement (the "Arrangement Agreement") with Regal Bidco Inc. (the "Purchaser"), a newly-formed acquisition vehicle controlled by private equity funds managed by Birch Hill Equity Partners Management Inc. ("Birch Hill") and private equity funds managed by Brookfield Asset Management ("Brookfield"), whereby the Purchaser will acquire all of the outstanding common shares (the "Shares") of the Company, other than the Rollover Shares (as defined below) (the "Transaction"), for $48.00 per Share in cash (the "Purchase Price"). As part of the Transaction, the Company's founders, Stephen Smith and Moray Tawse (together with their associates and affiliates, the "Rolling Shareholders"), who currently hold approximately 37.4% and 34.0%, respectively, of the outstanding Shares, will each sell approximately two-thirds of their current shareholdings in the Company for the same cash consideration per Share as other shareholders, and have agreed to exchange their remaining Shares (the "Rollover Shares") for ownership interests in the Purchaser. As a result, on closing of the Transaction, Messrs. Smith and Tawse are each expected to maintain an indirect approximate 19% interest in First National, with Birch Hill and Brookfield holding the remaining approximate 62% interest. The Transaction is not subject to any financing condition and is expected to close in the fourth quarter of 2025, subject to obtaining the required shareholder, court and regulatory approvals and the satisfaction of other customary closing conditions. The Purchase Price represents a premium of approximately 15.2% and 22.8% to the 30 and 90-trading day volume weighted average trading price, respectively, of the Shares on the Toronto Stock Exchange (the "TSX") on July 25, 2025, the last trading day prior to the announcement of the Transaction. The Purchase Price is also above the 52-week high closing price of the Shares as of July 25, 2025 and represents a total shareholder return of approximately 2,149% on the Company's initial public offering Share price, including the Company's historical dividend payments. The Purchase Price implies an aggregate total equity value of approximately $2.9 billion, inclusive of the Rollover Shares, and values the Company at a 16.5x price-to-earnings multiple based on the Company's reported trailing twelve months net income attributable to common shareholders as of March 31, 2025. "This Transaction represents the start of an exciting new chapter for First National," said Jason Ellis, CEO of First National. "Birch Hill and Brookfield bring significant expertise in the Canadian financial services industry, and we are excited to partner with them to grow our platform, drive innovation, and deliver for our customers, employees and institutional partners." Transaction Details The Transaction emerged from a robust strategic review process conducted by the Company, under the oversight of a committee of independent directors (the "Special Committee") advised by independent and highly qualified legal and financial advisors. The review process involved a competitive process in which multiple acquisition proposals were received and reviewed by the Special Committee. The Company entered into the Arrangement Agreement based on the unanimous approval of the Company's board of directors (the "Board") (with conflicted directors abstaining) after receiving the unanimous recommendation of the Special Committee. Both the Board and the Special Committee determined, after receiving financial and legal advice, that the Transaction is in the best interests of the Company and the consideration to be received by the holders of the Shares (the "Shareholders") (other than the Rolling Shareholders) is fair, and recommend that Shareholders vote in favour of the Transaction at the special meeting of Shareholders to be held to approve the Transaction. In connection with the Transaction, the Rolling Shareholders, who collectively hold approximately 71.4% of the outstanding Shares, have entered into irrevocable voting agreements agreeing to vote their Shares in favour of the Transaction and against any competing acquisition proposals. In addition, each of the other directors and executive officers of the Company, who collectively hold less than 1% of the outstanding Shares, have entered into voting agreements agreeing to vote their Shares in favour of the Transaction. Under the terms of the Transaction, the Class A Preference Shares, Series 1 (the "Series 1 Preferred Shares") and Class A Preference Shares, Series 2 (the "Series 2 Preferred Shares" and, together with the Series 1 Preferred Shares, the "Preferred Shares") of the Company are expected to remain outstanding in accordance with their terms following closing of the Transaction. The Preferred Shares will continue to be listed on the TSX and, as a result, the Company will continue to be a reporting issuer under applicable Canadian securities laws following closing of the Transaction. The 2.961% Series 3 Senior Unsecured Notes due November 17, 2025, 7.293% Series 4 Senior Unsecured Notes due September 8, 2026 and the 6.261% Series 5 Senior Unsecured Notes due November 1, 2027 (collectively, the "Company Notes") will be redeemed on the closing of the Transaction to the extent outstanding at such time. Each holder of Company Notes outstanding at such time will receive a cash amount equal to the applicable redemption price, plus accrued and unpaid interest, as of the closing date in accordance with the terms of such holder's Company Notes. First National intends to continue paying its regular monthly cash dividend of $0.208334 per Share in the ordinary course through to closing of the Transaction and regular quarterly dividends on the Preferred Shares in accordance with their terms. Transaction Rationale The conclusions and recommendations of the Special Committee and the Board were based on a number of factors, including the following: Compelling Value and Immediate Liquidity to Shareholders: The all-cash Purchase Price provides Shareholders with certainty of value and immediate liquidity. The Purchase Price represents a premium of approximately 15.2% and 22.8% to the 30 and 90-trading day volume weighted average trading price, respectively, per Share as of July 25, 2025, and is also above the 52-week high closing price of the Shares as of that date. Market Check: The Transaction is the result of a robust strategic review process led by the Company's financial advisor, RBC Capital Markets, which included outreach to a broad pool of potential buyers and resulted in multiple acquisition proposals, of which the proposal submitted by the Purchaser offered the highest value to Shareholders. Formal Valuation: The Special Committee received an opinion from its independent valuator and financial advisor BMO Capital Markets ("BMO") that, as of July 27, 2025, and based on BMO's analysis and subject to the assumptions, limitations and qualifications to be set forth in BMO's written valuation, the fair market value of the Shares is in the range of $44.00 to $50.00 per Share. Fairness Opinion: The Special Committee received an opinion from BMO that, as of July 27, 2025, and subject to the assumptions, limitations and qualifications to be set forth in BMO's written fairness opinion, the consideration to be received by Shareholders (other than the Rolling Shareholders) pursuant to the Transaction is fair, from a financial point of view, to such Shareholders. Arrangement Agreement Terms: The Arrangement Agreement is the result of a comprehensive negotiation process that was undertaken at arm's length with the oversight and participation of the Special Committee advised by independent and highly qualified legal and financial advisors and resulted in terms and conditions that are reasonable in the judgment of the Special Committee and the Board. Ability to Respond to Superior Proposal: Under the Arrangement Agreement, the Board of Directors, in certain circumstances until Shareholder approval is obtained, is able to consider any unsolicited acquisition proposals, and where the Board determines that an acquisition proposal is a superior proposal may, subject to a right to match in favour of the Purchaser, withdraw, modify or amend its recommendation that Shareholders vote to approve the Arrangement. However, under the Arrangement Agreement the Company is required to proceed with holding a vote on the Transaction, even if the Board has changed its recommendation. Break Fee: The break fee payable by the Company of $50 million is only payable in limited circumstances such as where the Arrangement Agreement is terminated as a result of a change in the Board's recommendation. Reverse Break Fee: The Company is entitled to a reverse break fee of $75 million in certain circumstances, including if the Arrangement Agreement is terminated by the Company as a result of the Purchaser's failure to close. No Financing Condition: The Transaction is not subject to a financing condition. Minority Vote and Court Approval: The Transaction must be approved by two-thirds of the votes cast by Shareholders, as well as by a simple majority of the votes cast by Shareholders excluding the Shares held by the Rolling Shareholders and any other Shareholders required to be excluded from such vote in the context of a "business combination" pursuant to Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"), and by the Ontario Superior Court of Justice (Commercial List), which will consider the fairness and reasonableness of the Transaction to Shareholders. Support for the Transaction: As described above, the Rolling Shareholders as well as all of the directors and executive officers of the Company have entered into voting agreements, pursuant to which they have agreed to, among other things, vote in favour of the Transaction at the special meeting of Shareholders to be held to approve the Transaction. Formal Valuation and Fairness Opinion In connection with its review and consideration of the Transaction, the Special Committee engaged BMO as its independent valuator and financial advisor and requested that BMO prepare a formal valuation in accordance with MI 61-101. BMO delivered an oral opinion that, as of July 27, 2025, and based on BMO's analysis and subject to the assumptions, limitations and qualifications to be set forth in BMO's written valuation, the fair market value of the Shares is in the range of $44.00 to $50.00 per Share. In addition, BMO provided an oral opinion that, as of July 27, 2025, and subject to the assumptions, limitations and qualifications to be set forth in BMO's written fairness opinion, the consideration to be received by Shareholders (other than the Rolling Shareholders) pursuant to the Transaction is fair, from a financial point of view, to such Shareholders. Additional Transaction Details The Transaction is to be completed by way of a plan of arrangement under the Business Corporations Act (Ontario). The Transaction is subject to a number of conditions customary for transactions of this nature, including, among others: (i) the approval of at least two-thirds of the votes cast by Shareholders (including the Rolling Shareholders) at a special meeting of Shareholders; (ii) the approval of a simple majority of the votes cast by Shareholders other than the Rolling Shareholders and any other Shareholders required to be excluded pursuant to MI 61-101 at such special meeting; (iii) clearance under the Competition Act (Canada); and (iv) court approval. Completion of the Transaction is not subject to a financing condition. The Company expects to hold the special meeting of Shareholders to consider and vote on the Transaction in September 2025. If approved at the meeting, the Transaction is expected to close in the fourth quarter of 2025, subject to court approval, Competition Act (Canada) clearance and other customary closing conditions. Following closing of the Transaction, the Purchaser intends to cause the Shares to be delisted from the TSX. The Preferred Shares will remain listed on the TSX. Jason Ellis is expected to remain First National's Chief Executive Officer and lead the business in all aspects of its operations. First National's current leadership team is also expected to continue following the conclusion of the Transaction. Further information regarding the terms and conditions of the Transaction are set out in the Arrangement Agreement, which will be publicly filed under the Company's SEDAR+ profile at Additional information regarding the terms of the Arrangement Agreement, the background to the Transaction, the independent valuation and fairness opinion and the rationale for the recommendation by the Special Committee and the Board will be provided in the information circular for the special meeting of Shareholders, which will also be filed under the Company's SEDAR+ profile at Early Warning Disclosure by the Rolling Shareholders Further to the requirements of National Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, Stephen Smith, 16 York Street, Suite 1900, Toronto, Ontario, M5J 0E6, will file an amended early warning report in connection with his participation in the Transaction as a Rolling Shareholder and for which he has entered into an irrevocable voting agreement agreeing to vote his Shares in favour of the Transaction and against any competing acquisition proposals, which agreement restricts the ability to vote for, support or participate in a competing transaction for as long as the Arrangement Agreement is in force and for a period of four months following the termination of the Arrangement Agreement in certain circumstances, including as a result of the failure to obtain the required Shareholder approval. Stephen Smith, through Smith Financial Corporation ("SFC") and FNSC Holdings Inc. ("FNSC", and together with SFC, the "Smith Entities"), currently owns 22,409,355 of the issued and outstanding Shares representing approximately 37.4% of the issued and outstanding Shares (on a fully diluted basis). SFC intends to transfer ownership of its Rollover Shares to a newly formed Ontario limited partnership prior to closing of the Transaction in exchange for units of the partnership. Following completion of the Transaction, Stephen Smith will beneficially own an indirect approximate 19% interest in First National. The Smith Entities hold Shares for investment purposes and expect to review from time to time the investment in the Company and may, depending on the market and other conditions: (i) acquire additional securities, options or related derivatives in the open market, in privately negotiated transactions or otherwise, and (ii) dispose of all or a portion of the securities, options or related derivatives over which they now or hereafter exercise, or may be deemed to exercise, control or direct. A copy of Stephen Smith's related early warning report will be filed with the applicable securities commissions and will be filed under the Company's SEDAR+ profile at Further information and a copy of the early warning report of Stephen Smith may be obtained by contacting: Justin Brenner, SVP, Managing Director, Smith Financial Corporation, [email protected], (647) 446-2122. Further to the requirements of National Instrument 62-104 – Take-Over Bids and Issuer Bids and National Instrument 62-103 – The Early Warning System and Related Take-Over Bid and Insider Reporting Issues, Moray Tawse, 16 York Street, Suite 1900, Toronto, Ontario, M5J 0E6 will file an amended early warning report in connection with his participation in the Transaction as a Rolling Shareholder and for which he has entered into an irrevocable voting agreement agreeing to vote his Shares in favour of the Transaction and against any competing acquisition proposals, which agreement restricts the ability to vote for, support or participate in a competing transaction for as long as the Arrangement Agreement is in force and for a period of four months following the termination of the Arrangement Agreement in certain circumstances, including as a result of the failure to obtain the required Shareholder approval. Moray Tawse, through 801420 Ontario Limited ("Tawse Holdco") and The Tawse Family Charitable Foundation (The Tawse Family Charitable Foundation together with Tawse Holdco, the "Tawse Entities"), currently owns 20,404,355 Shares representing approximately 34.0% of the issued and outstanding Shares (on a fully diluted basis). Tawse Holdco intends to transfer ownership of its Rollover Shares to a newly formed Ontario limited partnership prior to closing of the Transaction in exchange for units of the partnership. Following completion of the Transaction, Moray Tawse will beneficially own an indirect approximate 19% interest in First National. The Tawse Entities hold Shares for investment purposes and expect to review from time to time the investment in the Company and may, depending on the market and other conditions: (i) acquire additional securities, options or related derivatives in the open market, in privately negotiated transactions or otherwise, and (ii) dispose of all or a portion of the securities, options or related derivatives over which they now or hereafter exercise, or may be deemed to exercise, control or direct. A copy of Moray Tawse's related early warning report will be filed with the applicable securities commissions and will be filed under the Company's SEDAR+ profile at Further information and a copy of the early warning report of Moray Tawse may be obtained by contacting: Eric Torelli, Chief Financial Officer, Chambertin Asset Management Ltd., [email protected], (416) 994-7507. The Company's head office address is 16 York Street, Suite 1900, Toronto, Ontario, M5J 0E6. Advisors RBC Capital Markets is acting as financial advisor to the Company. BMO Capital Markets is acting as financial advisor and independent valuator to the Special Committee. Torys LLP is acting as legal advisor to the Company. Blake, Cassels & Graydon LLP is acting as legal advisor to the Special Committee. CIBC Capital Markets is acting as financial advisor and Davies Ward Phillips & Vineberg LLP is acting as legal advisor to Birch Hill and Brookfield. Birch Hill and Brookfield's debt financing for the transaction was fully underwritten by Canadian Imperial Bank of Commerce, RBC Capital Markets, and TD Securities, as Joint Bookrunners and Co-Lead Arrangers. Initial commitments were also provided by The Bank of Nova Scotia and National Bank of Canada, and will be followed by a general syndication. About First National First National Financial Corporation is the parent company of First National Financial LP, a Canadian-based originator, underwriter and servicer of predominantly prime residential (single-family and multi-unit) and commercial mortgages. With more than $155 billion in mortgages under administration, First National is one of Canada's largest non-bank mortgage originators and underwriters. For more information, please visit About Birch Hill Birch Hill is a Canadian mid-market private equity firm with a long history of driving growth in its portfolio companies and delivering returns to its investors. Based in Toronto, Birch Hill currently has over $6 billion in capital under management. Since 1994, the firm has made 73 investments, with 59 fully realized. Today, Birch Hill's 14 partner companies collectively represent one of Canada's largest corporate entities with over $8 billion in total revenue and more than 40,000 employees. About Brookfield Brookfield Asset Management (NYSE: BAM, TSX: BAM) is a leading global alternative asset manager with over US$1 trillion of assets under management. Brookfield invests client capital for the long term with a focus on real assets and essential service businesses that form the backbone of the global economy. Brookfield offers a range of alternative investment products to investors around the world — including public and private pension plans, endowments and foundations, sovereign wealth funds, financial institutions, insurance companies and private wealth investors. Brookfield's private equity business, which manages over US$145 billion of assets under management, focuses on driving operational transformation in businesses providing essential products and services. Forward-Looking Information This news release contains statements that are "forward-looking information" within the meaning of applicable securities laws. In some cases, forward-looking information can be identified by the use of terms such as "may", "will, "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "predict", "potential", "continue" or other similar expressions concerning matters that are not historical facts. Forward-looking statements include, among other things, statements with respect to the Transaction, including statements with respect to the rationale of the Special Committee and the Board for entering into the Arrangement Agreement, the terms and conditions of the Arrangement Agreement, the premium to be received by Shareholders, the expected benefits of the Transaction, the intention to continue to pay monthly dividends on the Shares and regular quarterly dividends on the Preferred Shares, the anticipated timing and the various steps to be completed in connection with the Transaction, including receipt of Shareholder, court and regulatory approvals, the anticipated timing for closing of the Transaction, the anticipated delisting of the Shares from the TSX, the anticipated treatment of the Preferred Shares and the Company Notes and the Company's status as a reporting issuer under applicable securities laws. Forward-looking statements are necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking information. Important factors that could cause actual results to differ, possibly materially, from those indicated by the forward-looking information include, but are not limited to: the possibility that the Transaction will not be completed on the terms and conditions, or on the timing, currently contemplated, and that it may not be completed at all due to a failure to obtain or satisfy, in a timely manner or otherwise, required shareholder and court approvals and other conditions of closing necessary to complete the Transaction or for other reasons; the possibility of adverse reactions or changes in business relationships resulting from the announcement or completion of the Transaction; risks relating to the retention of key personnel during the interim period; the possibility of litigation relating to the Transaction; risks related to the diversion of management's attention from the Company's ongoing business operations; and the other risk factors identified under "Risks and Uncertainties Affecting the Business" in the Company's latest management's discussion and analysis and in other periodic filings that the Company has made and may make in the future with the securities commissions or similar regulatory authorities in Canada, all of which are available under the Company's SEDAR+ profile at These factors are not intended to represent a complete list of the factors that could affect the Company. However, such risk factors should be considered carefully. There can be no assurance that such estimates and assumptions will prove to be correct. You should not place undue reliance on forward-looking information, which speaks only as of the date of this release and is subject to change after such date. Management and First National disclaim any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as required under securities laws.
Cision Canada
3 hours ago
- Cision Canada
JBO Thailand Launches Esports World Cup Promotion with Rewards Up to 30,000 Jcoin
BANGKOK, July 27, 2025 /CNW/ -- JBO, a well-established online gaming and entertainment platform, is pleased to announce an exciting new promotion tailored for the highly anticipated Esports World Cup 2025. Esports enthusiasts in Thailand now have a compelling opportunity to win up to 30,000 Jcoin by placing wagers on the thrilling "World Cup Qualifiers" matches. This shows JBO Thailand's commitment to giving great value and fun experiences to all its players. This exclusive event is ongoing and will conclude on August 24, 2025, at 23:59 (GMT+8). This period strategically aligns with the intensified global esports calendar, leading up to the Esports World Cup and its critical qualifying rounds. JBO Thailand is actively creating an immersive environment that allows fans to engage more deeply with preferred teams and competitive events. Participation in the promotion is straightforward. Players are simply required to place bets on eligible "Esports World Cup Qualifiers" matches through JBO's designated esports betting providers, IM Esports and TF Esports. The promotion is conveniently accessible via the "Reward Corner" section on the JBO platform, ensuring a seamless and intuitive user experience for all participants. At the core of this attractive offer is JBO's innovative Jcoin reward system. Players who log in to JBO and achieve a weekly turnover exceeding 3,000 in the Esports category will automatically qualify for Jcoin rewards. The reward system gives bigger prizes as you play more, with up to 30,000 Jcoin available each week. JBO also ensures a smooth and secure experience through the easy-to-use JBO app available for both Android and iOS devices. With fast withdrawals and smooth gameplay, the platform is ideal for esports fans to enjoy and earn real rewards. JBO is trusted across Asia and has Dimitar Berbatov as its brand ambassador, showing it as a top sportsbook and esports operator. JBO or Just Bet Online, is a trusted online gaming website that started in 2019 catering Thailand users. Players can bet on popular games like DOTA 2, CS:GO, and ROV, or enjoy fun slot machines and real-time casino tables. It also hosts fun events such as the JBO Thailand Super Cup engaging football fans.
Cision Canada
3 hours ago
- Cision Canada
Media Advisory - Monday, July 28, 2025 Français
OTTAWA, ON, July 27, 2025 /CNW/ - Note: All times local Prince County, Prince Edward Island 10:30 a.m. The Prime Minister will announce new measures to lower costs for Canadians. A media availability will follow. Note for media: Open coverage This document is also available at
