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1. Company Snapshot

1.a. Company Description

Evertz Technologies Limited engages in the design, manufacture, and distribution of video and audio infrastructure solutions for the production, post-production, broadcast, and telecommunications markets in Canada, the United States, and internationally.The company offers contribution encoder, decoder, receiver, processing, and modulation products; and control panels, unified controls, accessories, and network management systems.It also provides encoding, transcoding, and multiplexing products comprising ASI/IP converters, multiplexers, scramblers, and modulators; contribution encoders/decoders; transport stream processors; and software defined accelerated encoding/transcoding/muxing products, as well as audio/data/RF transporters, CWDM/DWDM multiplexors, fiber routers, SONET/SDH transporters, and video transporters.


In addition, the company offers infrastructure and conversion products, including audio/data embedder/de-embedder, keyers, media and logo inserters, master control switchers, audio processing, closed captioning, conversion, audio/video delay system, distribution amplifier, and frame synchronizer products; and IP audio/video processing, media gateway, switch routing, timing, and software defined network orchestration products.Further, it provides 3D, auto changeover, film/post graticule generator, master clock/SPG, slave clock, test/reference generator, and timecode products for live media production; EMS media server, mediator content manager, and live integrated playout products; and multi viewers.Additionally, the company offers antennas, demodulators, fiber transporters, routers/switchers, and splitters and distribution amplifiers; and audio, bypass and auto changeover, data/LTC/tally, fiber/RF, magnum unified control, video routers, and panels.


It serves content creators, broadcasters, specialty channels, and television service providers.The company was founded in 1966 and is headquartered in Burlington, Canada.

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1.b. Last Insights on ET

Evertz Technologies' recent performance was driven by strong quarterly results, with revenue reaching $132.7 million, a 6% increase from the prior year. International revenue grew 12.5% to $34.2 million. The company's fiscal Q2 earnings jumped 17% year-over-year, beating analyst forecasts. A special dividend was declared, and a Normal Course Issuer Bid was approved, allowing the company to purchase up to 3,774,227 outstanding common shares. These developments showcase the company's financial strength and commitment to shareholder value.

1.c. Company Highlights

2. Evertz Technologies' Q2 FY2026 Earnings: A Strong Performance

Evertz Technologies reported a robust financial performance for the second quarter of fiscal 2026, with sales totaling $132.7 million, representing an 18.4% sequential increase from the prior quarter. The revenue growth was driven by a 24% sequential increase in the U.S./Canada region, which contributed $98.5 million to the total revenue. The company's gross margin was $77.8 million or 58.6%, compared to 59.3% in the second quarter of the prior year. Net earnings were $18.6 million, resulting in fully diluted earnings per share of $0.2421, beating estimates of $0.1833. The actual EPS figure indicates a significant improvement in profitability.

Publication Date: Dec -20

📋 Highlights
  • Q2 Revenue Growth:: Sales rose to $132.7M (+6% YoY, +18.4% QoQ), driven by $98.5M in U.S./Canada (+24% QoQ).
  • Software & Services Expansion:: Recurring software/services revenue hit $60.7M (+17.6% QoQ), 45.7% of total revenue.
  • Gross Margin Stability:: 58.6% margin in Q2 (vs. 59.3% prior year), staying within 56-60% target range despite product mix shifts.
  • Liquidity & Dividends:: $96.7M cash reserves and $205.7M working capital, with $0.205 regular + $1 special dividend declared ($0.24 EPS).
  • Backlog & Strategic Moves:: $286M combined PO backlog + November shipments, leveraging U.S./Canadian manufacturing for tariff risks and Canadian defense opportunities.

Revenue Breakdown and Growth

The revenue breakdown reveals that Software and Services revenue increased by 11% year-over-year to $60.7 million, while hardware revenue rose by 2% to $72 million. The growth in Software and Services revenue is a positive indicator, as it suggests a continued adoption of Evertz' products by its customers. As Brian Campbell noted, "We continue to have a very robust backlog, and you can see from the month shipments in November, along with a very strong quarter. We're firing on most of the cylinders."

Valuation Metrics and Future Prospects

With a P/E Ratio of 15.74 and an EV/EBITDA of 9.21, the market appears to have priced in a reasonable growth trajectory for Evertz Technologies. Analysts estimate revenue growth of 2.8% for the next year, which is relatively modest. The Dividend Yield of 13.46% is attractive, indicating a significant return for shareholders. The company's Return on Equity (ROE) of 24.08% and Return on Invested Capital (ROIC) of 21.55% suggest a strong ability to generate profits from its investments.

Cash Flow and Working Capital Management

Evertz Technologies used $5.4 million in cash from operations during the quarter, primarily due to a $26.3 million change in non-cash working capital and current taxes. Excluding these effects, the company would have generated $25.2 million in cash from operations. The working capital stood at $205.7 million, including cash of $96.7 million as at October 31, 2025. The company's cash position and working capital management appear to be healthy, allowing it to declare a regular quarterly dividend and a special dividend.

3. NewsRoom

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3 TSX Dividend Stocks To Consider In Your Portfolio

Feb -05

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An Intrinsic Calculation For Evertz Technologies Limited (TSE:ET) Suggests It's 48% Undervalued

Jan -23

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Top TSX Dividend Stocks To Watch In January 2026

Jan -07

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Earnings Beat: Evertz Technologies Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models

Dec -12

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Evertz Technologies Reports a 17% Jump in Fiscal Q2 Earnings; Declares a Special Dividend

Dec -10

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Evertz Technologies Reports Quarterly Revenue of $132.7 Million in the Second Quarter Ended October 31, 2025

Dec -10

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Evertz Technologies Limited (ET) Announces TSX Approval of Normal Course Issuer Bid

Dec -09

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3 TSX Dividend Stocks With Yields Up To 6%

Dec -09

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.14%)

6. Segments

Hardware and Software

Expected Growth: 8%

Evertz Technologies' 8% growth in Hardware and Software is driven by increasing demand for high-quality broadcast equipment, growing adoption of IP-based infrastructure, and rising need for cloud-based solutions. Additionally, the company's focus on innovation, strategic partnerships, and expansion into new markets contribute to its growth momentum.

Services, including Warranty, Maintenance and Commissioning

Expected Growth: 10%

Evertz Technologies' Services segment, including Warranty, Maintenance, and Commissioning, is driven by increasing demand for broadcast and media solutions, expansion into new markets, and growing adoption of cloud-based services. The 10% growth rate is also fueled by the company's strategic partnerships, innovative product offerings, and a strong reputation for delivering high-quality services.

Long Term Contract

Expected Growth: 7%

Evertz Technologies' 7% long-term contract growth is driven by increasing demand for high-quality broadcast equipment, expansion into new geographic markets, and strategic partnerships. Additionally, the company's focus on research and development, leading to innovative products and services, contributes to its growth momentum.

7. Detailed Products

Dreamcatcher

A comprehensive monitoring and control system for broadcast and media facilities

EXE IPX

A high-density, scalable IP routing platform for broadcast and media facilities

Maestro

A comprehensive orchestration and control system for broadcast and media facilities

VIP

A high-performance, modular video processing platform for broadcast and media facilities

Neuron

A software-defined networking platform for broadcast and media facilities

XPS

A high-performance, modular audio processing platform for broadcast and media facilities

OvertureRT

A real-time, low-latency video processing platform for broadcast and media facilities

VUE

A comprehensive monitoring and analytics platform for broadcast and media facilities

8. Evertz Technologies Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Evertz Technologies Limited faces moderate threat from substitutes, as there are limited alternatives to its specialized broadcast equipment and services.

Bargaining Power Of Customers

Evertz Technologies Limited has a diverse customer base, and no single customer has significant bargaining power, reducing the threat of customer bargaining power.

Bargaining Power Of Suppliers

Evertz Technologies Limited relies on a few key suppliers for critical components, giving them moderate bargaining power.

Threat Of New Entrants

The high barriers to entry in the broadcast equipment industry, including significant capital requirements and technical expertise, reduce the threat of new entrants.

Intensity Of Rivalry

The broadcast equipment industry is highly competitive, with several established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 10.60%
Debt Cost 8.11%
Equity Weight 89.40%
Equity Cost 8.11%
WACC 8.11%
Leverage 11.85%

11. Quality Control: Evertz Technologies Limited passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Evertz Technologies

A-Score: 7.0/10

Value: 5.3

Growth: 3.8

Quality: 8.0

Yield: 10.0

Momentum: 7.0

Volatility: 8.0

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Growth: 5.3

Quality: 8.4

Yield: 5.0

Momentum: 10.0

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ClearOne

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Value: 8.1

Growth: 2.1

Quality: 3.5

Yield: 5.0

Momentum: 6.0

Volatility: 0.3

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Vecima Networks

A-Score: 4.0/10

Value: 6.0

Growth: 5.4

Quality: 2.8

Yield: 3.0

Momentum: 0.5

Volatility: 6.3

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Knowles

A-Score: 3.9/10

Value: 2.8

Growth: 1.4

Quality: 6.0

Yield: 0.0

Momentum: 7.0

Volatility: 6.3

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Clearfield

A-Score: 3.6/10

Value: 3.0

Growth: 4.7

Quality: 4.5

Yield: 0.0

Momentum: 6.0

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

14.82$

Current Price

14.82$

Potential

-0.00%

Expected Cash-Flows