Mr. Doug Vickerson reports

RENOWORKS ANNOUNCES THIRD QUARTER 2025 FINANCIAL RESULTS

Renoworks Software Inc. has released its financial results for the three and nine months ended Sept. 30, 2025. The financial statements and related management discussion and analysis (MD&A) can be viewed on SEDAR+. Unless otherwise stated, all dollar amounts are in Canadian dollars.

Financial highlights for the nine months ended Sept. 30, 2025 (year-to-date 2025), with comparatives for the nine months to Sept. 30, 2024 (YTD 2024) are as follows:

• Total revenue of $6,015,564, up 15 per cent from $5,210,091 in YTD 2024;
• Recurring licensing and hosting revenue of $2,672,998, up 36 per cent from $1,961,850 in YTD 2024;
• Libraries revenue of $703,756, up 41 per cent from $498,537 in YTD 2024;
• Gross margin improved to 76 per cent, compared with 74 per cent in YTD 2024;
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $196,921, up from $49,793 in YTD 2024;
• Net income of $113,070, compared with a net loss of $2,333 in YTD 2024;
• Deferred revenue of $2,386,726 at Sept. 30, 2025, compared with $2,519,797 at Dec. 31, 2024;
• Working capital positive at $275,658, compared with a deficit of $121,451 at Dec. 31, 2024; excluding deferred revenue, a significant non-cash item included in working capital, the company's working capital at Sept. 30, 2025, is positive $2,440,210 (Dec. 31, 2024: $2,157,879);
• Cash balance at Sept. 30, 2025, was $1,548,953, flat from $1,536,671 at year-end 2024;
• As at Sept. 30, 2025, the company had 40,817,968 common shares issued and outstanding, versus 40,664,635 at Dec. 31, 2024;
• Sixth consecutive quarter of profitability, reflecting disciplined cost management and recurring revenue expansion.

Financial highlights for the three months ended Sept. 30, 2025 (Q3 2025), with comparatives for the three months to Sept. 30, 2024 (Q3 2024), are as follows:

• Revenue of $2,002,749, up 6 per cent from $1,894,911 in Q3 2024;
• Recurring licensing and hosting revenue of $911,989, up 38 per cent from $662,321 in Q3 2024;
• Gross margin of 78 per cent, compared with 74 per cent in Q3 2024;
• Net income of $20,241, compared with $110,364 in Q3 2024;
• Adjusted EBITDA of $52,563, compared with $125,395 in Q3 2024.

Chief executive officer commentary

"These results highlight the strength of our strategic shift toward scalable, recurring revenue," said Doug Vickerson, chief executive officer of Renoworks. "Licensing and hosting revenue grew by 36 per cent year over year as more of our enterprise customers adopt AI-driven [artificial intelligence] solutions, replacing one-time design services with ongoing SaaS [software-as-a-service] licensing. This transition is improving both our gross margins and the predictability of our revenue streams. We're seeing strong traction with customers adopting Renoworks Pro and AI-based platform features, as evidenced by the recent launch of eight new enterprise visualizers for leading North American manufacturers and distributors, with 15 more scheduled by the end of Q1 2026. Based upon our current sales pipeline, including current customers, new prospects and contractors, we anticipate continued growth in our annual recurring revenue through the addition of new contractors and the expansion of our enterprise accounts. These changes are driving higher-value, long-term relationships that position Renoworks for sustainable organic growth, with a focus on profitability."

Operational highlights:

• Revenue mix transformation: Licensing and hosting revenues now account for the majority of the company's growth, reflecting strong adoption of Renoworks' AI-powered visualization, data and analytics, and lead-generation tools. Design services revenue declined 6 per cent year over year, consistent with the company's strategic plan to reduce transactional services.
• Customer concentration improving: Revenue from the company's largest customer decreased from 36 per cent in YTD 2024 to 32 per cent YTD 2025 and 28 per cent in Q3 2025, reflecting diversification and successful transition of this key account from design services to AI-driven licensing and hosting.
• Investment in innovation: Continued investment in artificial intelligence, data science and contractor-focused platform enhancements is accelerating the rollout of new features and supporting growth in Renoworks Pro and enterprise offerings.

Financial results summary

Financial results from operations for the nine months ended Sept. 30, 2025, with comparatives for the nine months ended Sept. 30, 2024, are as follows.

Financial results from operations for the three months ended Sept. 30, 2025, with comparatives for the three months ended Sept. 30, 2024, are as follows.

Outlook

Renoworks expects continued revenue growth driven by customer adoption of AI-powered licensing and hosting solutions, despite the offset from the anticipated reduction in design services revenue. Management remains focused on strengthening gross margins, expanding recurring revenue streams, and advancing its AI platform capabilities across both enterprise and Pro customer segments.

About Renoworks Software Inc.

Renoworks develops and sells digital visualization software and integration solutions for the remodelling and new home construction industry. The company provides solutions to manufacturers, contractors, builders and retailers, addressing one of the home improvement industry's key challenges -- helping homeowners visualize their product selections in a realistic digital environment before purchase. Renoworks generates revenues from five main business lines: Renoworks Enterprise, Renoworks Pro, Renoworks Design Services, Renoworks FastTrack and Renoworks API.

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