Ms. Sherilyn King reports

YELLOW PAGES LIMITED REPORTS SECOND QUARTER 2026 FINANCIAL AND OPERATING RESULTS AND DECLARES A CASH DIVIDEND

Yellow Pages Ltd. has released its operating and financial results for the quarter ended June 30, 2026.

"In the second quarter, we delivered solid profitability and cash generation despite ongoing revenue pressure resulting from macroeconomic uncertainty," said Sherilyn King, president and chief executive officer of Yellow Pages.

Ms. King commented on the key developments:

• Good quarterly earnings: "Revenue declined 8.0 per cent year over year while adjusted EBITDA [earnings before interest, taxes, depreciation and amortization] remained solid at a 19.1-per-cent margin, supported by ongoing cost discipline and operating efficiencies."
• Cash to shareholders and to pension plan: "During the second quarter, we completed the previously announced plan of arrangement, distributing $25-million to shareholders through a share buyback. In connection with the plan of arrangement, we also contributed an additional $2-million to the defined benefit pension plan in April, 2026."
• Strong cash balance: "Following the disbursements to shareholders and the pension plan, our steady cash generation has grown cash on hand to approximately $38-million at the end of July."
• Quarterly dividend declared: "Our board has declared a dividend of 25 cents per common share, to be paid on Sept. 15, 2026, to shareholders of record as of Aug. 17, 2026."

Second quarter of 2026 results:

• Total revenues decreased 8.0 per cent year over year and amounted to $47.6-million for the three-month period ended June 30, 2026, compared with the decrease of 7.4 per cent reported for the same period last year.
• Adjusted EBITDA less capex (capital expenditure) totalled $8.6-million and the EBITDA less capex margin was 18.2 per cent.
• Net income amounted to $3.3-million, or diluted income of 24 cents per share.

Financial results for the second quarter of 2026

Total revenues for the second quarter ended June 30, 2026, decreased by 8.0 per cent year over year and amounted to $47.6-million, as compared with $51.7-million for the same period last year. The decrease in revenues is mainly due to the decline of the company's higher-margin digital media and print products and, to a lesser extent, due to lower-margin digital services products, thereby creating pressure on the company's gross profit margins. The total revenue decline rate of 8.0 per cent for the three-month period ended June 30, 2026, compares with 7.4 per cent for the same period last year. The higher revenue decline rate is driven by the decline in print revenue while the decline rate for digital revenue has improved year over year.

Total digital revenues decreased 6.2 per cent year over year to $38.4-million for the three-month period ended June 30, 2026, compared with $41-million for the same period last year. The decline in digital revenue was mainly attributable to a lower digital customer count, partially offset by higher average spend per customer. The improvement in the digital revenue decline rate from 6.4 per cent in the second quarter of 2025 to 6.2 per cent in the second quarter of 2026 was mainly due to a higher average spend per customer, partially offsetting the decrease in digital customer count.

Total print revenues decreased 14.8 per cent year over year, compared with 11.2 per cent for 2025 and amounted to $9.1-million for the three-month period ended June 30, 2026. The decline in print revenue is mainly due to the decrease in the number of print customers. While the average spend per print customer improved year over year as the proportion of lower-spending accounts declined.

Adjusted EBITDA decreased by $1.6-million, or 15.1 per cent, to $9.1-million, compared with $10.7-million for the same period last year. The adjusted EBITDA margin decreased during the three-month period ended June 30, 2026, to 19.1 per cent, compared with 20.7 per cent for the same period last year. The decrease in adjusted EBITDA and adjusted EBITDA margin for the three-month period ended June 30, 2026, was mainly driven by lower revenues, pressure from product mix, higher bad debt expense and the impact of the company's share price on cash-settled stock-based compensation expense. These factors were partially offset by optimizations in cost of sales and reductions in other operating costs, including reductions in the company's work force and associated employee expenses, including reduced variable compensation resulting from changes to the executive management team in the second half of 2025. The change in Yellow Pages' share price resulted in an expense of $700,000 for the three-month period ended June 30, 2026, compared with an expense of $600,000 for the same period last year. Revenue pressures and changes in product mix, partially offset by continued optimizations and cost reductions, will continue to cause pressure on margins in coming quarters.

Adjusted EBITDA less capex decreased by $1.7-million, or 16.7 per cent, to $8.6-million during the second quarter of 2026, compared with $10.4-million during the same period last year. The decrease in adjusted EBITDA less capex and adjusted EBITDA less capex margin for the three-month period ended June 30, 2026, is mainly driven by the decrease in adjusted EBITDA.

Net income increased to $3.3-million for the three-month period ended June 30, 2026, compared with net income of $1.5-million for the same period last year. The year-over-year increase in net income for the three-month period ended June 30, 2026, is mainly due to the settlement loss on annuity purchase recorded in 2025 and lower financial charges, partially offset by lower adjusted EBITDA and an increase in restructuring and other charges.

Cash flows from operating activities decreased by $2.4-million to $9.7-million for the three-month period ended June 30, 2026, from $12.1-million for the same period last year. The decrease is mainly due to lower adjusted EBITDA of $1.6-million and an increase in financing of postemployment benefit plans of $1.8-million due to the voluntary cash contributions made to the defined-benefit pension plan, partially offset by a $1.1-million increase in change in operating assets and liabilities. The change in operating assets and liabilities is mainly due to the timing in the collection of trade receivables.

Conference call and webcast

Yellow Pages will hold an analyst and media call and simultaneous webcast at 8:30 a.m. Eastern Time on Aug. 6, 2026, to discuss second quarter 2026 results.

To join by phone

United States -- toll-free:  800-715-9871

United States/international toll:  1-646-307-1963

Canada -- Toronto:  647-932-3411

Canada -- toll-free:  800-715-9871

Passcode:  6097436

The call phone numbers and the webcast links can also be found on the company's website.

The conference call will be archived in the investors section of the company's website.

About Yellow Pages Ltd.

Yellow Pages is a Canadian digital media and marketing company that creates opportunities for buyers and sellers to interact and transact in the local economy. Yellow Pages holds some of Canada's leading local on-line properties, including YP.ca, Canada411 and 411.ca. The company also holds the YP, Canada411 and 411 mobile applications and Yellow Pages print directories.

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