D-BOX Reports Second Quarter Fiscal 2027 Results; Record Royalties Lift Gross Margin to 64%

Royalties reach a record $5.1 million delivering $4.4 million in Adjusted EBITDA¹ at a margin of 36%

MONTREAL, Nov. 10, 2026 (GLOBE NEWSWIRE) — D-BOX Technologies Inc. (“D-BOX” or the “Company”) (TSX: DBO) today reported financial results for its second quarter of fiscal 2027, the three and six month periods ended September 30, 2026.

“Royalties reached a new quarterly record and accounted for 42% of total revenues, which supported a significant improvement in our gross margin,” said Naveen Prasad, CEO of D-BOX. “System sales were lower than in an exceptionally strong second quarter last year, reflecting the more traditional slowdown in exhibitor capital spending during the summer release period. We continued to grow our installed base, which reached 1,249 active screens, and we remain focused on disciplined cost management and capital allocation. We also signed partnerships with two new exhibitors this quarter, building upon the one announced at the end of last quarter. While these relationships will take time to scale, we are confident they will contribute meaningfully to our long-term goal of growing our global screen count. As we pursue these growth opportunities, we remain equally focused on operational discipline and cash generation, with cash flows from operations reaching $5.1 million in the quarter.”

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¹ See the “Non-IFRS and Other Financial Performance Measures”

Selected Financial Information (unaudited)

Review of Second Quarter Results

Total revenues for the quarter decreased 25% to $12.1 million from $16.1 million a year earlier. Royalties increased 14% to a record $5.1 million, driven by the combination of an 28.6%² increase in the North American domestic box office and a 15.2% increase in the Company’s installed base of active screens, which broadened the base of screens generating recurring licensing and maintenance fees. The quarter’s box office was unusually concentrated, with two films accounting for more than half of domestic receipts; D-BOX royalties generally benefit from a broader slate of strong titles, which allows exhibitors to program D-BOX content across more of their equipped screens.

System sales revenues decreased 40% to $7.0 million from $11.6 million. Theatrical system sales decreased 52% to $3.1 million, reflecting a return to more typical seasonal patterns as exhibitors slowed capital deployment during the summer months, compared with an exceptionally strong prior-year quarter. Sim racing and simulation and training system sales decreased 21% and 20%, respectively, reflecting moderated demand from certain third-party OEM partners that adjusted their production schedules. Revenues by customer group were as follows:

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² According to https://www.boxofficemojo.com/

Gross profit decreased 13% to $7.7 million from $8.9 million, while gross margin improved to 64% from 55%. The improvement reflects a higher proportion of high-margin rights for use, rental and maintenance revenues in the mix, together with a smaller contribution from lower-margin theatrical system sales.

Total operating expenses decreased 18% to $5.1 million, or 42% of total revenues compared with 27% a year earlier mainly reflecting higher share-based compensation, the valuation of which is influenced by the Company’s share price. Selling and marketing expenses increased 54% to $1.8 million, mainly due to higher share-based compensation ($0.2 million), professional fees ($0.2 million) and trade show travel costs ($0.1 million). Administration expenses increased 27% to $2.4 million, as a $1.0 million increase in share-based compensation was partially offset by a $0.5 million reduction in salaries. This increase reflects the Company’s commitment to tying management compensation directly to shareholder value creation. Research and development expenses decreased 28% to $0.8 million, primarily reflecting a $0.3 million increase in government assistance.

Net profit for the quarter was $2.6 million, or $0.012 per basic share and $0.011 per diluted share, compared with $4.5 million, or $0.020 per basic and diluted share, a year earlier. The decrease primarily reflects lower system sales and higher share-based compensation expense, partially offset by higher royalties and the resulting improvement in gross margin.

Review of Year-to-Date Results

For the six months ended September 30, 2026, total revenues decreased 13% to $25.5 million from $29.1 million, as lower system sales across all customer groups were partially offset by a 19% increase in royalties to $10.1 million. Gross margin improved to 61% from 56%, reflecting the higher proportion of royalties in the revenue mix. Net profit was $5.6 million, or $0.025 per basic share and $0.024 per diluted share, compared with $6.5 million, or $0.029 per basic and diluted share, and Adjusted EBITDA¹ was $8.6 million, compared with $8.9 million.

Theatrical system sales decreased 36% to $6.8 million, sim racing system sales decreased 11% to $4.4 million, simulation and training system sales decreased 20% to $3.2 million and other system sales decreased 16% to $1.1 million. Operating expenses increased 5% to $10.1 million, as higher share-based compensation was largely offset by lower salary costs, reflecting severance incurred in the prior-year period that did not recur, and by higher government assistance for research and development.

D-BOX’s revenue base continues to shift toward recurring royalties, which are linked to box office performance and to the size of the Company’s installed base. System sales, by contrast, depend on the timing of exhibitor capital spending, which is subject to seasonality and cyclicality and tends to vary with the strength of the global film slate and the cash flows of exhibitor partners. System sales in fiscal 2026 reflected an exceptionally strong period of exhibitor investment, and the level of system sales achieved in that year may not be indicative of the level of system sales in other periods. Given this variability, management continues to emphasize the importance of assessing the Company’s performance on a trailing twelve-month basis.

Financial Position, Cash Flows and Capital Allocation

Cash and cash equivalents were $19.9 million as at September 30, 2026, compared with $17.6 million as at March 31, 2026. Working capital increased $4.6 million to $29.3 million, and equity increased $5.1 million to $39.7 million, reflecting net profit and share-based compensation for the period, partially offset by share repurchases.

Total debt¹ was $0.2 million and net cash¹ was $19.7 million as at September 30, 2026, compared with net cash of $17.3 million as at March 31, 2026. The Company’s $8.0 million credit facility with National Bank of Canada remained undrawn.

For the six months ended September 30, 2026, cash flows provided by operating activities were $5.1 million, compared with $4.2 million a year earlier, mainly reflecting higher share-based compensation expense and a favorable change in the fair value of derivative financial instruments, partially offset by lower net profit. Cash flows used in investing activities were $0.6 million, compared with $0.4 million, reflecting higher additions to intangible assets. Cash flows used in financing activities were $2.2 million, compared with $1.0 million, primarily reflecting share repurchases, together with scheduled debt and lease repayments.

Under its normal course issuer bid, the Company repurchased 1,376,200 Class A common shares during the three month quarter ended and 1,860,700 Class A common shares during the six-month period for total cash consideration of $1.9 million. Of these, 1,781,000 shares were cancelled and 79,700 shares were held in treasury pending cancellation as at September 30, 2026.

Total finance leases receivable increased $0.5 million to $1.8 million, reflecting growing adoption of D-BOX’s financing offerings, which allow exhibitor partners to deploy haptic systems with reduced upfront capital.

This release should be read in conjunction with the Company’s unaudited interim condensed consolidated financial statements and the Management’s Discussion and Analysis dated November 10, 2026. These documents are available at www.sedarplus.ca.

Non-IFRS and Other Financial Performance Measures

D-BOX uses the following non-IFRS financial performance measures in its MD&A and other communications. The non-IFRS measures do not have any standardized meaning prescribed by IFRS and are unlikely to be comparable to similarly titled measures reported by other companies. Investors are cautioned that the disclosure of these metrics is meant to add to, and not to replace, the discussion of financial results determined in accordance with IFRS. Management uses both IFRS and non-IFRS measures when planning, monitoring and evaluating the Company’s performance. The non-IFRS performance measures are described as follows:

Adjusted EBITDA

EBITDA represents earnings before interest and financing, income taxes and depreciation and amortization. Adjustments to EBITDA are for items that are not necessarily reflective of the Company’s underlying operating performance. As there is no generally accepted method of calculating EBITDA, this measure is not necessarily comparable to similarly titled measures reported by other issuers. Adjusted EBITDA provides useful and complementary information, which can be used, in particular, to assess profitability and cash flow from operations. Adjusted EBITDA margin is defined as Adjusted EBITDA divided by total revenues. The following table reconciles adjusted EBITDA to net profit:

Total Debt, Net Debt and Total Debt to Adjusted EBITDA

Total debt is defined as the total bank indebtedness, long-term debt (including any current portion), and net debt is calculated as total debt net of cash and cash equivalents. The Company considers total debt and net debt to be important indicators for management and investors to assess the financial position and liquidity of the Company and measure its financial leverage. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Total debt to Adjusted EBITDA ratio is calculated as total debt divided by the last four quarters’ Adjusted EBITDA. We believe that total debt to Adjusted EBITDA is a useful metric to assess the Company’s ability to manage debt and liquidity.

Supplementary Financial Measures
Gross margin is defined as gross profit divided by total revenues.
Operating expenses as a percentage of total revenues are defined as operating expenses divided by total revenues.
Operating margin is defined as operating income divided by total revenues.
Working capital is defined as current assets less current liabilities.

ABOUT D-BOX

D-BOX Technologies Inc. (TSX: DBO) is a global leader in haptic technology, delivering immersive motion experiences that engage the body and spark the imagination. Our patented systems synchronize motion, vibration, and texture with on-screen content, enhancing storytelling across various platforms. With over 25 years of innovation, D-BOX’s solutions are utilized in movie theaters, sim racing, and simulation & training. Headquartered in Montreal, Canada, with offices in Los Angeles, USA, D-BOX continues to redefine how audiences experience media worldwide. Visit https://www.d-box.com/.

FOR FURTHER INFORMATION, PLEASE CONTACT:

David Reid
Chief Financial Officer
D-BOX Technologies Inc.
dreid@d-box.com

D-BOX Media Relations

media@d-box.com 

DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS

Certain information included in this press release may constitute “forward-looking information” within the meaning of applicable Canadian securities legislation. Forward-looking information may include, among others, statements regarding the future plans, activities, objectives, operations, strategy, business outlook, and financial performance and condition of the Company, or the assumptions underlying any of the foregoing. In this document, words such as “may”, “would”, “could”, “will”, “likely”, “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate” and similar words and the negative form thereof are used to identify forward-looking statements. Forward-looking statements should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether, or the times at or by which, such future performance will be achieved. Forward-looking information, by its very nature, is subject to numerous risks and uncertainties and is based on several assumptions which give rise to the possibility that actual results could differ materially from the Company’s expectations expressed in or implied by such forward-looking information and no assurance can be given that any events anticipated by the forward-looking information will transpire or occur, including but not limited to the future plans, activities, objectives, operations, strategy, business outlook and financial performance and condition of the Company.

Forward-looking information is provided in this press release for the purpose of giving information about Management’s current expectations and plans and allowing investors and others to get a better understanding of the Company’s operating environment. However, readers are cautioned that it may not be appropriate to use such forward-looking information for any other purpose.

Forward-looking information provided in this document is based on information available at the date hereof and/or management’s good-faith belief with respect to future events and are subject to known or unknown risks, uncertainties, assumptions and other unpredictable factors, many of which are beyond the Company’s control.

The risks, uncertainties and assumptions that could cause actual results to differ materially from the Company’s expectations expressed in or implied by the forward-looking information include, but are not limited to, the performance and concentration of the film slate and the box office; the level and timing of exhibitor capital spending on system purchases; demand from OEM partners in the sim racing and simulation and training markets; the sustainability of royalty revenues; fluctuations in the exchange rate between the Canadian dollar and the U.S. dollar; and the Company’s ability to maintain cost discipline. These and other risk factors that could cause actual results to differ materially from expectations expressed in or implied by the forward-looking information are discussed under “Risk Factors” in the Company’s annual information form for the fiscal year ended March 31, 2026, a copy of which is available on SEDAR+ at www.sedarplus.ca.

Except as may be required by Canadian securities laws, the Company does not intend nor does it undertake any obligation to update or revise any forward-looking information contained in this press release to reflect subsequent information, events, circumstances or otherwise.

The Company cautions readers that the risks described above are not the only ones that could have an impact on it. Additional risks and uncertainties not currently known to the Company or that the Company currently deems to be immaterial may also have a material adverse effect on the Company’s business, financial condition or results of operations.

*All dollar amounts are expressed in Canadian currency

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