With that, I'd like to now turn the call over to Duncan McCready. Morning, Duncan.
Good morning, Glenn, thank you for the introduction, great to be here and welcome everyone. Thank you for joining the call today. As Glenn mentioned, we'll walk through IC Group's Q4 and our full year 2025 results. The intention is to really focus in on three things, is our performance for 2025, obviously, what changed in the business, and how we're positioned going forward into 2026. Just a, you know, a quick overview on IC Group. You know, we're really focused as a consumer engagement company that helps enterprise brands and professional sports organizations connect with their consumer audiences at scale to drive commerce, capture first-party data, build loyalty, and ultimately support, you know, ongoing marketing initiatives.
Today, we service customers across more than 30 international jurisdictions, supporting enterprise customers and over 90 pro sports teams, to deliver consumer engagement across digital, customer, mobile, and live event ecosystems, particularly in regulated and complex operating environments. IC Group's value proposition is really centered on simplifying the complexities of operating in those environments and of providing consumer engagement across geographies, regulatory frameworks, which ultimately allows our customers to execute programs efficiently and to build upon compliance, data, program, and consumer integrity. The business itself has three operating segments. IC Engage, which formerly was digital promotions, IC Mobile, formerly mobile messaging, and IC Insurance, formerly insurance solutions. At the core of our business, we're really focused on building durable, repeatable engagement solutions that support recurring revenue, scalability, and operating leverage over time.
2025 was a great year for us, a strong transition year, getting our footprint or our footing as a public company and converting strong momentum from 2024 into measurable, scalable, and operating performance in 2025. We delivered over 50% revenue growth, reaching CAD 26.9 million for the year, driven almost entirely by organic expansion across all three of our business units, which is a strong reflection of the product market fit and the trust by our customers. IC Mobile continued to lead the growth, increasing 86% year-over-year to CAD 12.5 million, as message volume scaled across both enterprise and wholesale customers. Our annual recurring revenue remains strong at approximately 68%. This really reinforces the shift towards a more predictable and durable revenue base. Our gross profit grew to CAD 12.4 million, representing a 46% margin.
This reflects the impact of revenue shift towards messaging while delivering strong results across all three business segments. IC Mobile accounted for 38% of our revenue mix in 2024, while it represented 46% in 2025. Importantly, we saw a clear inflection in profitability, with adjusted EBITDA reaching CAD 1.4 million over the year and CAD 0.63 million in Q4 alone. This signals early stages of operating leverage as the business scales. Overall, 2025 was a strong transition year. We scaled revenue, improved the balance sheet, and demonstrated operating leverage, positioning IC Group for continued growth and margin expansion into 2026. John, I'll pass it over to you, if you can get into some more detail on the next slide.
Thanks, Duncan. Appreciate your comments. I too am very pleased with IC Group's financial achievements of the fourth quarter and for the year of 2025. As Duncan mentioned, the company finished the year on a strong note in terms of both its earnings for the quarter and its balance sheet strength. I'm confident that the combination, this combination establishes the platform in terms of earnings momentum and financial resources to launch into a successful 2026. Regarding our year-end financial position, having completed a CAD 3.75 million common equity raise in December, the company ended the year with a cash balance of CAD 4.8 million.
The company regularly carries a negative working capital balance that you will note in our balance sheet published overnight, and that's partly because of the deferred revenue related to client project work of IC Engage, where there's an embedded 65% margin at our run rate. I would make the comment that we do not see our working capital balance changing in the foreseeable future. In December, we also negotiated to extend the scheduled repayments of CAD 1.2 million of the debentures that we acquired with our Emotion Media acquisition back in February. We extended that amount of the debentures by 12 months into 2027.
Further subsequent to year-end, CAD 175,000 of the CAD 400,000 of shareholder advances on our year-end balance sheet were converted to equity, and the maturity of the balance was deferred to March of 2027. Lastly, as a comment on our balance sheet strength, the company has non-capital loss carry-forward and other unused tax credits available in its main operating legal entity, such that it's not forecast to pay cash taxes through 2026 and into 2027. You will see note disclosure to that effect in our financial statements. For these reasons, I feel very comfortable that the company has the financial resources and the flexibility to fund its organic growth initiatives in 2026.
Looking forward to next year, the company will continue to deleverage by growing its earnings to create higher debt capacity and continuing to amortize down its bank indebtedness. In 2025, I note that the company repaid approximately CAD 1.5 million of bank debt, and that pace of repayments will continue into 2026. Turning to our earnings for the year and the fourth quarter, as Duncan mentioned, the company's adjusted EBITDA for 2025 was CAD 1.37 million. Of this, CAD 1 million was earned in the last two quarters of the year, CAD 410,000 in Q3, and a strong CAD 630,000 in Q4. This level of earnings is more indicative of the floor from which we are intending to grow into 2026.
Our 2025 earnings improved across all three of our operating segments. IC Engage produced CAD 1.9 million of adjusted EBITDA, a 42% increase over the prior year, driven by a 30% increase in revenues, and partly from the February acquisition of Emotion Media Inc. IC Mobile saw revenues increase 85% in 2025 from CAD 6.7 million to CAD 12.5 million. This was offset during the year by operating margin compression, resulting from a focus on winning new business from high volume enterprise customers and a step cost increase in our overhead staffing complement in advance of anticipated growth. Looking forward, we see opportunities to improve the profitability of the business across a larger revenue footprint from continued growth, operational efficiencies, and margin expansion as our customers increase their utilization of messaging channels that offer higher functionality.
Last, IC Insurance saw 2025 revenues grow by 20% and improve profitability despite a general market risk premium compression, from which we earn our commissions. Duncan, that concludes my comments. I'll turn it back to you.
Great. Thanks very much, John. As, you know, as we look at our business, IC Group is really built around three proven business segments, which John reflected on. Each with its own value propositions and each with its own defensible positions in the marketplace. These segments are designed to grow and evolve independently while also working together as part of a broader platform. Collectively, they enable consumer engagement and commerce at scale, creating a level of integration and optionality that is really difficult for competitors to replicate. Moving to IC Engage as a segment, it's, you know, is a proven scalable engagement engine with deep enterprise and sports penetration with our customer base.
We enable enterprise brands and professional sports organizations to deploy always-on digital engagement, whether it be promotions, incentives, fan experiences that ultimately drive directly drive commerce, data ownership, and loyalty marketing. The customer roster you see here reflects trust in our ability to execute at scale across markets, regulatory regimes, and operating environments where failure is not an option. Importantly, IC Engage is not a project-based business. It's designed around long-term client relationships, recurring economics, and repeat program deployment, which provides revenue visibility and expansion opportunities across this business segment. IC Engage continues to be our highest margin segment, an important contributor to our overall profitability. In the fourth quarter, as John mentioned, IC Engage generated CAD 3.5 million in revenues with a 72% gross margin. For the full year, delivered CAD 12.5 million in revenue, representing a 31% year-over-year growth.
These results reflect the scalability and repeat, repeatability of the programs we run for our customers. Performance was a primary driver with enterprise-level campaigns, live engagement events through our Fannex platform, and continued strength in incentives, rewards, and repeat programs. These use cases tend to be recurring in nature with customers returning season over season or campaign over campaign. Looking ahead, our focus is on expanding platform adoption, increasing repeat program activity, and deepening the integration with messaging and data capture across the broader IC Group platform. This not only supports revenue growth, but also operating leverage and margin sustainability. As you can see, IC Engage plays a critical role in the business as a margin engine, helping convert platform scale into higher gross profit and supporting the company's broader operating leverage objectives.
Mobile communications is a core channel for large scale customer engagement and commerce. IC Mobile is one of only three tier one aggregators in Canada with direct carrier connections and the only messaging platform fully hosted and processed in Canada, positioning the business to service regulated Canadian industries. In 2025, the platform delivered over 1 billion mission-critical messages across security, transactional, and marketing use cases, generating revenue on a per message basis. Last week, we were really happy to announce the onboarding of a new customer, which will add up to 120 million messages annually and up to CAD 1 million in ARR at our typical margins. The business model prioritizes securing this high volume SMS traffic to establish our scale while expanding into higher margin messaging solutions over time.
Industry developments, including the adoption of RCS by Apple and expanded rich messaging capabilities, are increasing functionality and expanding the addressable market for us. IC Mobile is now enabled for Google RCS, Apple Business Chat in Canada, and toll-free messaging, supporting secure, trusted business communications across multiple channels. I view IC Mobile as the scale engine and a key driver of top-line revenue growth. For the full year 2025, the business generated CAD 12.5 million in revenue, representing 86% year-over-year growth, driven entirely by organic volume expansion. In the fourth quarter alone, revenue reached CAD 3.3 million. As expected at this stage, margins remain lower at approximately 20%, reflecting a deliberate focus on securing high volume messaging traffic across enterprise and wholesale customers to establish scale in the SMS channel.
In Q4, this translated into CAD 0.65 million of gross profit. What's important is that the economics of this business improve as scale increases. The platform is now processing large message volumes, creating opportunities to improve margins through technology and pricing optimization, carrier cost passthroughs, and the introduction of a higher value messaging services over time. Near term, our focus is on continuing to expand high volume traffic, improving the margin profile, and converting platform scale into operating leverage. IC Insurance provides specialty insurance solutions that enable commerce and fan engagement at live events, promotions, and other sponsored programs. We focus on niche, high-value coverages, including event cancellation, crisis management, liability, and prize-based promotions, where underwriting complexity and regulatory requirements create barriers to entry.
The business operates as a Lloyd's backed MGA with binding authority across multiple jurisdictions and no balance sheet risk, allowing us to scale without deploying capital to risk. Revenue is generated through a combination of transactional premiums, service and professional fees, and profit commissions, creating multiple paths to monetize as the portfolio grows. IC Insurance continues to deliver a high margin performance, while revenue timing reflects the seasonal nature of live events, promotions, and sponsored programs. In the fourth quarter, the segment generated CAD 0.38 million in revenue, up 30% year-over-year with a 63% gross margin, underscoring the profitability of the specialty insurance business. For the full year, IC Insurance delivered CAD 1.9 million in revenue, representing 21% growth. Revenue in this segment tends to be seasonal, aligned with event calendars and promotional activities across sports, entertainment, and live events.
Q4 reflects this seasonality as activity levels moderate outside peak event periods. Importantly, the business is focused on re-reducing seasonality over time by expanding the product suite, increasing recurring use cases, and embedding insurance more deeply into promotions and engagement programs across the program. Overall, IC Insurance remains a high margin contributor that provides meaningful differentiation and complements the broader IC Group platform. Over the past 12 to 18 months, we transitioned to a public company. We completed the acquisitions that formed IC Engage, IC Mobile, and IC Insurance. We secured growth capital and delivered strong operational performance for the year. This period was about positioning the business for value creation and establishing an enterprise-level recurring revenue base that builds momentum going into 2026. Looking to 2026, the focus is on scaling the business and take advantage of operating leverage to improve margins.
In IC Mobile, this means continuing to scale messaging volume in SMS, expanding more profitable messaging channels, and evolving message distribution across channels to improve revenue and margin. In IC Engage, we're focused on expanding our customer reach, improving monetization and data and activations in live events. Recently, we ran a test and learn initiative across 15 professional teams and over 70 events that will help inform future development initiatives. We also continue to develop and expand our enterprise-level customer relationships. Using proven offerings, new innovations, and expanding our expertise in new consumer markets. Over the longer term, this execution and scale are expected to support improved revenue quality and free cash flow visibility, which may broaden the investment community. As the business scales, opportunities may also emerge across IC Engage, IC Mobile, and IC Insurance for strategic optionality, which may also increase investor appeal over time.
The bottom line for us, the business performed last year, giving us good momentum into 2026. The focus is now on disciplined scaling to improve revenue quality and long-term value over time. Why invest? Our track record matters. When I look at our business, we work with some of the biggest and best brands in the world, whether it be enterprises or professional sports organizations. This doesn't happen overnight, nor does it happen by accident. This reflects the trust and expertise required to operate at scale and in complex environments. We do like live events, 40,000-seat stadiums, delivering over 1 billion messages or running campaigns across 30 different countries at the same time. The business has delivered strong and consistent revenue growth, driven primarily by organic expansion across the platform and supported by diversified end markets and use cases.
Approximately 68% of our revenue is recurring, providing improved visibility into future performance and supporting a more predictable revenue base as the company scales. IC Group operates as a diversified and scalable platform across the three different business segments, which enables us to participate across multiple touchpoints with customers during their engagement lifecycle. Finally, we believe the company is trading at an attractive entry valuation relative to peers, reflecting an early stage in the public company life cycle following platform build-out and initial scale. Thank you for joining us today and for your continued interest in IC Group. We appreciate the time you've taken to review our 2025 results and to learn more about our business. We remain focused on disciplined execution, improving revenue quality, and building long-term value as we continue to scale the business.
If you have any follow-up questions, we welcome the opportunity to continue the discussion. Thank you for your support.
Thank you, Duncan, and I think right now I'll open the floor to Q&A. If you have a question, there's the Q&A button at the bottom of your screen. You can type in your question, and we will address them as they come in. I'll give it a minute for those to populate. Okay, we can start it off. Duncan, it says approximately about 95% of growth was organic. What does that say about demand across the platform?
Sorry, great question. I think, you know, it's a reflection that our, there's a strong pro-product market fit across the different business segments. Our customers, recognize their strengths and, our experience and expertise that we bring to the table.
Mm-hmm.
I think that is truly a reflection of those skill sets and the solutions that we bring to that customer base. One of the things I, you know, I'm really proud of is, you know, just the expertise we bring and the ability to scale across the different platforms. That's really demonstrated by the growth that's the organic growth that's happening across those business segments.
Great. Thank you. Next, question for maybe for John. It looks like you've reduced debt obligations during the year. Is further deleveraging a priority?
Thanks for the question. Further deleveraging in two ways, and I may have referred to this in my comments. You know, as our earnings grow, so does our debt capacity, as far as the lending community would look at our company. We see our balance sheet position improving. We have bank loans that are amortizing bank loans that go back, they were put in place before we were a public company.
You know, we'll continue to amortize down those loans, in combination with growing our earnings, I would say, until we get into a position where, I would say a position where we're comfortable with our overall debt level, overall debt level right now, and you can see in our financial statement disclosure, we're slightly over-leveraged. We just figure that will cure itself. We, we raised CAD 4 million in the fourth quarter. We didn't raise CAD 6 million. That was intentional. We thought CAD 4 million was the right number to carry our company forward so that we can harness the opportunities for future growth, fund them, without being.
Being in an excess cash position. I'm comfortable with where we are. We have debentures that are maturing in 2027, the bulk of them, CAD 1.2 million, I mentioned in my comments. I would anticipate that we would refinance out those debentures at that point in time and have the balance sheet strength on the support of higher earnings to do that.
Great. Thank you. It looks like gross margins declined slightly due to a higher mobile mix. How should investors think about margin trajectory going forward?
I can take that one, Glenn. I mean, it's a strategic priority to grow all of our segments and the business, you know, IC Insurance and IC Engage both have a margin in the 60% to mid-60s range. IC Mobile is just, it's a different business. The bulk of the costs are the invoices we receive from the carriers. You could look at that business as the gross profit being our top line. We've often talked about, you know, if the carrier doubled the pricing and all other things being equal, we would drop to a 10% margin but still make the same amount of money on the same amount of internal activity.
I think as, you know, if, if mobile grows faster than IC Engage, our gross margin will go down. It could go the other way. It's dependent on how the segments perform in terms of growth relative to one to the other. We just know that in every one of the segments at the margins we achieve, we achieve bottom line returns for our shareholders.
Great. Thank you. I have a question from Johnson Carbuccia. Sorry if I butchered your name there. What is the strategy to scale outside of the organic growth model?
It's a great question. I mean, we, you know, acquisition is something that, you know, we're looking at in terms of. We'll do so when it's appropriate. It'll be based on, you know, is it accretive to our business? We're not out trying to scale the. You know, it's not a business model about, you know, just going out and doing acquisitions and rolling them up. It will be accretive in nature and it'll, you know, it'll have to make sense for all the, you know, the right reasons in the business, and that's obviously inclusive of our shareholder base. Our, you know, our insiders are highly aligned to any future dilution through acquisition and stuff. It has to be value add to the business.
Great. Thank you. Maybe, you know, maybe we will answer one more here and then, probably a good segue to wrap it up. Duncan, what milestones should shareholders really be watching for over the six to 12 months?
It's a great question. I think, you know, one is continued revenue growth. I think operating leverage, so starting to see, you know, bottom line improvements, margin improvements, I think will be important. I think transition from, in the messaging segment, you'll see, you know, transition to different communication channels as we start to roll that out will be important. In our Engage channel, it's about increasing our, you know, our reach across enterprise and customers and sports teams in the live event space. Those are kind of the key areas for me to stay focused on.
At the end of the day, it's all about operating and delivering quality and bringing that expertise to our customer bases, and that's, that'll be reflecting in kinda our operating leverage and our EBITDA margin at the end of the day.
Great. Thank you, Duncan, and I think that is it for the questions submitted. I will pass it over to you for any kind of concluding thoughts.
Again, thanks everyone for joining. We have an exciting year ahead of us. We've got some great momentum, we're really focused on delivering value, long-term value to all of our stakeholders. We'll do that by continuing to execute well on the business and scale the business in the ways we spoke about. We've got a great team that works within IC Group, and we have a really strong customer base if you seen in the presentation. The combination of those two things, you know, we should, you know, we're really looking forward to a good year in 2026 as we evolve the business. Thank you for your support.
Thank you. That concludes our conference call for this morning. Thank you for joining us.