Good morning, and welcome to NTG Clarity's Q1 2025 Earnings Conference Call. My name is Ali Farouk, an analyst at NTG Clarity. On our agenda for today, we'll start with management's prepared remarks on our financial and operating results for the three months ending March 31, 2025. We'll then have a Q&A period, answering questions written in ahead of the call. Note that the full published report with audited financial statements, notes, and management discussion is available on SEDAR and our website at www.ntgclarity.com. This presentation aims to highlight and summarize the key information already reported there. We will be posting both the slides and a recording of the presentation on our website following the call, so make sure to subscribe to our mailing list on our investor page on our website to get notified when those are available.
With that said, I'll be welcoming management for remarks shortly, but first, I'll start with a quick disclaimer. Certain statements in this presentation, other than statements of historical fact, are forward-looking information that involves various risks and uncertainties. Such statements relating to, among other things, the prospects for the company to enhance operating results are necessarily subject to risks and uncertainties, some of which are significant in scope and nature. These uncertainties may cause actual results to differ from information contained herein. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. These and all subsequent written and oral forward-looking statements are based on the estimates and opinions of the management on the dates they are made and expressly qualified in their entirety by this notice.
The company assumes no obligation to update forward-looking statements should circumstances or management statements, estimates, or opinions change. In this presentation, we also refer to non-IFRS or non-GAAP financial measures that management believes are useful supplemental measures, but not alternatives, to net income and operating cash flow. Please see the non-IFRS measures section towards the end of this presentation, our press release, and our MD&A for details and reconciliation of non-IFRS measures to IFRS measures. With that, I'd like to invite Adam Zaghloul, Vice President of Strategy and Planning, to begin his remarks.
All right. Thank you very much, Ali. And thank you to everybody who is tuning in for this Q1 2025 Earnings Conference Call. Q1 definitely was another amazing quarter for NTG Clarity. You know, we really saw the whole NTG team fire on all cylinders to keep the momentum that we saw in 2024 continue forward into 2025. And I think, you know, we can call that a success as well. Our key market of the Kingdom of Saudi Arabia, where 95% of our revenue still originates, is continuing to invest heavily into digital transformation and software development as a part of their Vision 2030 plan. And the Kingdom is really recognizing the importance of software development and technology as key pillars in diversifying their economy away from the oil and gas cycle.
Due in large part to the growth that we saw in the Saudi market, revenues for Q1 are up 68% year- over- year to $19.7 million for the quarter. That marks 16 consecutive quarters of last 12 months' revenue growth and 10 consecutive quarters of record-setting revenue for NTG. With approximately $100 million in backlog purchase orders and contracts that are on hand and unbilled, we're expecting the strong revenue growth to continue on as we finish out 2025 and beyond into future years as well. Really, the investments that we've been making into, you know, our talent pipeline, the relationships, and really business development in Saudi Arabia are really paying dividends in the results that we've been seeing recently, for sure.
I would say that a key component to our success in Q1 is really the dedication and performance and focus of our team in executing all of our key strategic initiatives going into 2025 and key initiatives and priorities. You know, the first one being really deepen our relationships and our engagements with a lot of our customers and become a bigger part of their digital transformation strategies. You know, looking into or looking back on Q1, our customers are showing a consistent trend of trusting NTG with larger and larger parts of their ever-growing digital transformation budgets, both from the sense of on-site and offshore professional resources.
Our customers are really resonating with our ability to provide quality work while still coming in at competitive prices, flexible engagement terms, as well as, you know, operational and cultural fit with that talent force being based out of Egypt as well, right across the Red Sea from Saudi Arabia. Now, this is definitely evidenced, especially in our offshore software development model, where this quarter, Q1, we saw a 260% increase in revenue from offshore software development, making it now our largest part of our business at about 50% of our revenue. So our customers are really resonating with, you know, the same quality service that you get, but at up to 50% savings when you compare to hiring locally on-site in Saudi Arabia, for sure.
Overall, our customers are continuing to, you know, realize the value that NTG provides for their business and increase the size of their engagements. That leads to Q1 having an increase in average contract size of about 62%. Our second priority for the year is definitely continuing to win new customers using our land and expand sales model. Definitely, referrals and word of mouth are a large part of why we get a lot of our new customers. This quarter, we signed two new clients.
Even though their initial engagements are relatively minor when it comes to revenue, we definitely understand that this is the first step in building those long-lasting, large engagements as we begin to, you know, we start with a small engagement with our clients, and then our dedicated account managers will work with them to find areas that NTG can add further value in their business, either on the software product side or on the resources side as well, and look to expand those engagements over time as we continue to work together and grow with our client success. The third priority is to further increase the adoption of our proprietary software product, NTG Apps.
Definitely, over the course of 2024, our team did a great job sort of recruiting our existing customers into starting, you know, trials and proof of concepts with NTG Apps to the point where at the end of the year 2024, almost half, 47% of our customers were at least running a proof of concept with NTG Apps that way. Now, in 2025, we're starting to see early feedback that those trial engagements are converting into full-on contracts. So far, in Q1, we've booked a 150% increase in NTG Apps revenue. I guess that's also noteworthy that that 150% growth is the first time that NTG Apps growth has outpaced the company as a whole. We've also billed about CAD 2.5 million of NTG Apps revenue this quarter, making it already about 60% of the whole year 2024 NTG Apps billings as well.
So overall, we're continuing to be really excited about NTG Apps providing not only some revenue growth in the future, but also some margin expansion from the software side of the business as well. I'll move to the financials now. I'll talk about revenue and gross margin. In Q1 2025, we saw a 68% year-over-year growth in revenue, like I mentioned, to CAD 19.7 million of Q1 revenue. Our gross margin came in at just about 34%. That is a little bit below our historical typical gross margin of between 35%-40%. There are two main temporary reasons why that's the case. The first one is some ramp-up costs associated with new contracts.
It could be traveling and relocation for some on-site contracts, but also a lot of work to put together, you know, renovated office space for our new and expanded engagements from the offshore software development side. Now, those expenses would fall into cost of goods sold as they support our offshore revenue generation as well. The other contributing factor was definitely some year-end bonuses that we gave to our technologists that was booked in Q1 for the year 2024. Together, these factors combined add about 200 basis points of drag to our gross margin. Like I mentioned, these are pretty temporary pressures, and we're expecting to recover back to our more typical 35%-40% gross margin range as we continue out through the rest of the year. Moving on to operating expenses.
Now, as you can probably tell, comparing this quarter's results to our full-year adjusted EBITDA guidance, for example, this quarter has what we see as probably the high point in our operating expenses. I'll start off with the G&A line. Comparing this year, Q1 2025, G&A represented about 13% of revenue. Now, that's down from a proportion of 16% last year, but there still is a large absolute value climb when it comes to G&A expenses. The reason behind that is really our focus on being able to scale our workforce to meet the demand of the clients that we see right now. Over the course of Q1, our G&A roster increased by headcount by about 15%. Our focus right now is really on scaling with quality employees.
We want to be doing that recruiting, that hiring, that onboarding, that training of skilled employees to have them on our roster to deploy for customers in the future and get them to be booked as billable and cost of goods sold later on down the line. We definitely laid the groundwork with a lot of, you know, G&A hiring of skilled talent this quarter. Moving on to the sales and marketing line. Sales was about 7% of revenue in Q1 2025 compared to 6% of revenue last year. That came with, again, another absolute value climb. Similar reasons for that as the G&A are that we are, you know, actively expanding the footprint of our sales team. Our sales team increased by headcount by about 10% this quarter as well.
A large part of the increase is providing some of our larger accounts with dedicated account managers and account coordinators who are basically working with them full-time to understand the demand and the capacity that these customers need, being able to, you know, forecast and plan what resources will need to be placed with what clients in the future, and also learn where maybe NTG Apps can be a fit in their digital transformation strategy as well. We are definitely laying the groundwork to continue our growth throughout the rest of the year and into next year as well with these sales and marketing investments.
The last piece that played into sales and marketing was, again, you know, as a, you know, a thank you and a thanks for a job well done to our sales team, we booked some year-end bonuses for the performance in 2024 because the team really rised to the occasion and drove the amazing growth that we saw with the year in 2024. That being said, you know, those bonuses did put some temporary pressure, one-time pressure on the operating expenses as well. That plays into the quarter's profitability. For Q1 2025, net income before taxes was CAD 3.2 million. That's up from about CAD 2 million in 2024, which is about a 56% increase. That being said, in Q1 2025 is, of course, the first time where we will have officially run through our accumulated historical tax losses.
We've, for the first time, needed to provision taxes for Canadian corporate tax in addition to the Saudi corporate tax that we were already paying. The combined tax provision was CAD 1.2 million, and that's about a 600 basis point impact to our net income margin. This is definitely an area that we're striving to improve on, and we're working pretty closely with our tax advisors to figure out the best way to, you know, mitigate the combined impact of both Saudi and Canadian corporate taxes as well. After taxes, net income came in at about CAD 2.1 million or about 11% of revenue, and earnings per share was about CAD 0.05.
Now, the difference between net income and adjusted EBITDA for NTG primarily is, number one, taxes, which I just mentioned, but also foreign exchange on the difference between our primary operating currency of the Saudi rial, which is pegged to the $1, and some of our other operating currencies like the Egyptian pound and the Canadian dollar. For Q1, foreign exchange was a bit of a tailwind. We picked up some dollar value on the foreign exchange, which has been typical in the past few quarters, for sure. At the end of the day, that was not included in the adjusted EBITDA, which came in at about 15% of revenue.
Now, understanding that that 15% of revenue is slightly below our target range for the year of 16%-20%, it really is a case of us making some investments into, like I mentioned, our G&A, our roster of employees to be deploying with customers in the future, but also our sales team in order to be able to sustain our growth going forward and even drive it even further. We are expecting that as we continue out through the year, we will see our operating model return to the, I guess you can say the prime example that we set in Q4 with adjusted EBITDA margins being closer to 20%. Moving to the cash flow. In Q1, we booked about CAD 2.5 million in operating cash flow before the change in net working capital.
When it comes to the main driver in that change of working capital, I'm going to sound repetitive, definitely from Q4 and previous quarters, but it is, you know, the growth in our accounts receivable, which is, of course, a natural byproduct of the rapid revenue growth that we've been seeing recently. To dive a little bit deeper into the accounts receivable, we can take a look at our days sales outstanding. The average amount of time between when we book revenue and when we actually collect the cash is still sitting at a relatively consistent 75 days. It is clear to say that within a quarter, we're generally collecting. When we take a look at our aging of our accounts receivable, we can see that 91% of receivables were, in fact, billed in Q1, and another 5% were billed in Q4.
Now, both of those bins are market improvements over Q4 as well. Now, there are about 4% of receivables that were billed prior to Q4, but I can say that so far what we've seen is that collections have been pretty strong in Q2, and we're looking forward to, you know, our more moderate revenue growth, reducing our drag in accounts receivables and letting some more cash flow come through. All that being said, our total operating cash flow for the quarter was sitting at about CAD 400,000. Below the operating cash flow line, I also want to point out that we're continuing to earmark in the range of about CAD 150,000-CAD 200,000 per quarter of continued long-term debt repayment to really have that slow and steady drip of improvements to our balance sheet going on into the future. So talk about revenue guidance.
Coming into the call and coming into this earnings release, we had guided for CAD 75 million of top-line revenue. Q1 definitely has been an amazing quarter for NTG Clarity. Our customers are continuing to show strong demand, not just for our professional services, but also more and more for our software products as well. That, combined with our already strong and consistent backlog of purchase orders and contracts on hand of about CAD 100 million, makes us confident to modestly increase our revenue guidance for the year from CAD 75 million to about CAD 78 million. That brings our targeted revenue growth for the year to be approximately 40% year-over-year growth.
On the cost side, Q1 is definitely characterized by investments, both into, as I mentioned, the resources and the talent that we're going to be placing with our clients in the future, but also into our sales team, who is going to be able to get out there and, you know, not only get new clients, but also expand the engagements with our existing clients as well. That being said, again, like I mentioned, we're expecting operating expenses to be tapering off towards the end of the year, similar to what we did in 2024. We're confident enough to reaffirm our guidance of adjusted EBITDA in the range of about 16%-20% as well. Overall, I really just want to echo how proud I am of the whole NTG team and how amazing of a quarter Q1 was.
You know, we're continuing to take advantage of our customers' demands for quality professional services when it comes to software development and our software products as well. Our entire team is really executing on our strategic priorities. We're deepening our relationships with all of our existing customers to a large extent, as well as, you know, really having that word-of-mouth work for us in the sense of, you know, new customers signing on with us, and then those dedicated account representatives working with them to identify areas where we can do some more work for them. We can add some more value for them, both on the resource side and on the software side.
Of course, that software side is becoming more and more relevant, with NTG Apps now reaching up to 9% of our revenue and looking like it can be a source of continued revenue growth and margin expansion into the future as well. All that said, you know, there really is a huge growing opportunity in front of us. There really is a worldwide trend of continued digitization and increase in automation. That is especially the case in the Middle East, and especially Saudi Arabia, where there are large government investments into digital transformation, software development, and diversification of the economy. It really, the ball really is in NTG's court. All we have to do is keep doing what we're doing, providing value to our customers, and keeping our costs under control. With all of that said, thanks again for tuning in.
I'll now open up the floor to questions that were written in from the audience just ahead of the call. I’d like to invite Ali back to the stage to start us off with the first question whenever you're ready, Ali.
All right. Our first question is written in from Mac, a private investor. With oil prices at $60 a barrel, are you seeing declining budgets from your Saudi clients?
That is a really good question. Thank you, Mac. Yeah, we'll talk about, you know, Saudi funding right now. I think one of the core strong suits of our offering and our business right now is that, you know, a lot of our customers are not in the oil and gas businesses themselves. You know, they are telecom operators, they're banks and financial institutions, that's the primary customer, also system integrators.
They have revenue that's not at least directly derived from the oil and gas cycle. That being said, of course, there are large government investments that are largely funded by oil and gas. Another strong suit of our operating model and our business model is that definitely the Saudi government recognizes that investment into technology and software development is, you know, one of those core pillars that's going to get their economy diversified away from that oil and gas and really get them away from being, you know, beholden to that cyclicality in the oil and gas cycle. What we're seeing is, you know, there are no impacts from what we can tell on our clients' budgets for digital transformation.
Where the government maybe is scaling back funding is on those more, you know, higher prestige projects, those infrastructure projects that can be scaled back a little bit more. Again, you know, what we work on really is the core to the digital transformation of the Saudi economy, which again is the core to their Vision 2030.
All right. Awesome. Our next question comes in from Aravinda, an analyst from Canaccord. Do you expect working capital to balance out for the rest of the year? It was still an issue in Q1 resulting in less cash flow, but with more moderate growth this year, are you expecting improvements?
That's a good question. Thank you, Aravinda. To cover, yeah, the working capital aspect of things, I think definitely you're right to point out the more moderate revenue growth that we've been seeing so far.
Typically, you know, just due to the nature of our billing cycle, working capital drag from accounts receivable is about equal in magnitude to the revenue growth. As we're seeing a more moderate revenue growth, we're expecting that working capital drag from accounts receivable to moderate as well. As we continue on down the year, we are expecting to see a little bit more cash flow come through. The one caveat I would put on that is that we're coming up next week to the Eid holiday at the end of next week, which we saw last year definitely slowed down the payment cycles for Q2. That's to be expected. You know, people are off on vacation. It basically is their equivalent of Christmas in the Middle East. People are taking time off. They're spending time with their families, that kind of thing.
What it can slow down is our, you know, signing of new deals temporarily and, you know, collections on invoices. We expect it to be the case that, you know, picking up shortly after the holiday in Q3, we will see a pickup in receivables like we saw last year and also a pickup in contracts signed. All that is to say, definitely we expect to see some cash flow come through towards the midpoint to second half of this year.
Okay. Awesome. We also have a second question from Aravinda. Gross margin was slightly compressed at 34%. I understand that amortization is now included, but still seems down a little. How should we think about it throughout the year?
That is a good question. Thanks. I will add a little bit more color to the prepared marks that we went through, for sure.
You're right to point out that amortization is now accounted for. The amortization of our intangible asset, NTG Apps, is now accounted for in the cost of goods sold, just due to the amount of revenue that we're deriving from NTG Apps right now. So definitely a good problem to have. But you're right to point out that, you know, 34% is a little bit below what we typically see from our gross margins in the range of 35%-40%. Really was some temporary factors that I mentioned. You know, we were running and gunning to set up a lot of new offshore offices, a lot of whose expenses will fall into the cost of goods sold. Those are one-time expenses. Also, really bonuses for the tremendous performance of our technologists last year also hit a one-time expense in Q1.
We'd really expect once we get past those into Q2, Q3, Q4, we'd expect those gross margins to recover by about 200 basis points and even potentially more as we look to get these projects into a more steady state.
All right. Great. Our next question comes in from Doug, an analyst at Beacon. NTG Apps was 9% of the revenue versus 6% last year, with Q1 product revenue more than 55% of the entire 2024 product revenue. You had mentioned in prior calls that a number of your clients were trialing NTG Apps. Was the growth in product revenue in Q1 due to more revenue from existing clients, or have some new clients started to issue purchase orders? What is the goal for NTG Apps as a percent of revenue by Q4 2025 and for 2026?
What would be the impact on gross margins if NTG Apps can get to 15%-20% of total revenue?
Okay. Right on. Thanks for the questions, Doug. So yeah, NTG Apps is something that we're really excited about this quarter. That 150% year-over-year revenue growth really is showing that a lot of those proof-of-concept type projects are transitioning into full-on contracts. To answer that first part of your question, you know, absolutely our sales strategy has been, you know, nurturing existing customers to then grow their engagements with us, a large part of which being that NTG Apps software offering. Definitely the contracts coming through from existing customers on that, as we would expect. Now, when it comes to, you know, projecting out the growth of NTG Apps, that's something that's definitely hard to do.
It's very beholden to this sort of testing out proof-of-concept pilot project lifecycle. I would say if I were to be, you know, optimistic and aggressively forecasting NTG Apps, keep the growth going the way that it has been going, we could finish out the year with, say, 12% of NTG Apps, just to throw a number out there. In, you know, 2026, if that grows up to 15%-20%, that would be great. You know, what you're right to point out asking about the gross margin profile in those cases, that, you know, this is a software business. It has close to, at this time, about 50% gross margins with room for upside after we get some efficiencies of scale going on in that sense.
Just as a comparison, you know, our typical services, you know, if it's on-site, maybe it's in the neighborhood of 34%-36%. Offshore can be, you know, 36%-37%, even 40% as well. If we were to say have a 20% revenue mix of NTG Apps, that could bring our gross margin up to about 40%, which, of course, is a 600 basis points improvement on this quarter. Yeah, I'll just echo the point that we're really excited about the opportunity in front of us about NTG Apps bringing some margin expansion for us as well.
All right. He also has a second question. Q1 margins were clearly impacted by an increase in headcount. How long will it take new employees to ramp up their productivity?
That's, yeah, that's definitely an excellent point about increasing in headcount.
I think how we can typically think about our billing cycle, right, is that about a one-quarter lag between rolling out to employees. I mean, we definitely did a lot of investing, that 15% extra headcount in the G&A line item, a lot of whom are going to be, you know, basically technologists on the roster to be rolled out with future projects. I would say, you know, if I were to put a target, we would be most of the way there to rolling out these employees by about Q2 and, you know, almost all of the way there by time we report Q3 as well. I would expect us to mimic the sort of profile that we saw towards the end of 2024 as well.
All right. Awesome. Our next question comes in from Chris, an analyst from Activate Capital.
Do you think Saudi is being seen as a more stable place to invest and do business in, particularly with the recent publicized improved government relationship between the U.S.A. and Saudi?
Thanks, Chris, for the question. I would say, you know, long story short, definitely yes. Just in my conversations with investors over the last few months, I'm definitely seeing a lot of investors become more interested, or more interested, more intrigued by the opportunity of investing in Saudi Arabia. The sort of recent diplomatic mission to Saudi Arabia in the Middle East over the last few weeks, you know, it was all over social media. A lot of people were talking about it. I think it really did wonders for, you know, opening the minds of a lot of people at the opportunity that lies in the Middle East, specifically in Saudi Arabia.
Definitely, again, my conversations with investors recently have been, you know, had themes of investors being confident in the stability and long-term suitability for investment that the Middle East has to offer. Yes, very excited about, you know, increased and better relations between, you know, Western countries and Saudi Arabia, sort of sweetening the deal when it comes to an investment opportunity for sure.
All right. Our next question comes in from Aditya, a private investor. Are most of the planned 2025 investments now behind you, or should we expect a similar run rate of growth-related spend in the coming quarters?
That's a good question, Aditya. Thanks. I'll start off by saying, you know, so far from what we can tell, we spent a lot on investments in, like I mentioned, building our roster for professional services and increasing the footprint of our sales team this quarter.
We do expect, you know, when it comes to operating expenses Q1 to have, you know, the highest operating expenses this year. That's the expectation. We do expect as we hit Q2, Q3, Q4, we see some reduction into a more sustainable run rate when it comes to operating expenses and be able to post, you know, a full-year adjusted EBITDA result of in the range of 16%-20% like we projected. That being said, you know, as we finish off the holiday season in the Middle East, we'd open ourselves back up to, you know, negotiating new contracts and renewals and expansions with some of our customers. Depending on the pipeline of contracts, we might need to make a few more investments.
That's why we gave ourselves that breathability in that adjusted EBITDA guidance between 16%-20% to be able to make a few more investments if we needed to to scale. But yeah, just to summarize, we did make what we see as the bulk of the investments in Q1 and expect some improvement in the bottom line going forward.
All right. Great. Our next question comes in from Sergio, Private Investor. I'm wondering about forward guidance, which indicates the next three quarters will be flat sequentially. $19.7 million reported at Q1 times four quarters is $78.8 million with guidance estimated to be $78 million.
Yeah, that's a good point, Sergio. So one note on the guidance I would put out is that, you know, our guidance is typically built on, you know, number one, primarily the backlog of purchase orders and contracts that we have on hand.
It also includes, you know, renewals and, yeah, renewals from existing customers that we expect to come through in the near future as well. What it is not as good at reflecting is any new work or any expansions of existing contracts from existing customers. So while this may make our guidance seem a little bit conservative, what I can say qualitatively is that, you know, the appetite for growth is still there from our customers. We do definitely see growth in the economy in Saudi Arabia continuing on throughout the year and into the future, as well as growth in our engagements as well. That's definitely what we're seeing on the ground.
All right. Great. Our next question comes in from James, a private investor. How many clients do you expect to be able to land a quarter?
So new clients, that's a good question, James. Thank you.
When it comes to new clients, historically, it has been a little bit bumpy. We did get those two new clients in Q1, but there have been times in our history where we have not signed a new customer in a quarter. There have been quarters where we had multiple customers. At the end of the day, you know, signing those new customers is that important first step in, you know, then nurturing them into the large engagements that we see once we prove ourselves to be valuable to those customers. All that being said, I would say the main driver behind all the revenue growth that we have been seeing is not as much new customer acquisition, but it is very much the nurturing and expansion of existing customer contracts. That seems to be the secret sauce in the growth that we have been seeing recently.
All right.
Our next question comes in from Tyler, another private investor. Are you going to uplist to the TSX this year?
That's a good question, Tyler. Thanks. I get a lot of questions from investors about uplisting to the TSX. There's definitely, you know, pros and cons to the uplist for sure. Just to run through a few of them, the pros is definitely, you know, the extra exposure that you get to investors, you know, more ability for different types of investors to buy in, maybe a little bit more peace of mind for those investors as well. When it comes to the cons, it mostly is, you know, cost-related, both in terms of strict monetary cost, but also the time and effort required to do all the extra reporting requirements, that kind of thing.
When we're crunching the numbers, it seems like the extra cost will be something in the neighborhood of CAD 300,000-CAD 1 million per year. So definitely significant increase in expenses related to an uplist. That being said, you know, the last year or so has definitely proved that even being a venture-listed company, we don't have any problems getting out in front of investors and getting some investors interested in investing in the company. It's something that we've got on our radar and that we're thinking about, but that we're sort of waiting until, you know, the incremental expenses make sense for the value that we get when it comes to those pros there as well.
All right. Our next question comes in from Roger, a private investor. Accounts receivable is continuing to be a drag on operating cash flow.
How should we think about this and your ability to collect?
That's a good question. Thanks, Roger. I fully understand a lot of the questions about the accounts receivable. It can definitely seem that, you know, the company's cash flow is being constrained by that. I just want to double down on how, you know, natural of a byproduct the working capital drag is from our revenue growth. There are a couple of ways that I think are useful to think about it. Number one is probably, you know, the proportion of revenue growth to change in receivables. You know, just the way our billing is set up and the way our billing system works, we generally expect, you know, all else being equal, the incremental revenue to be about equal to the change in working capital.
When you take a look at Q1, we had about CAD 2.5 million increase in revenue, but it was actually less incremental, you know, that change in accounts receivable was about CAD 2.1 million. That definitely indicates that, you know, our revenue growth is moderating a little bit, and we're starting to see less of an impact on cash flow from that change in accounts receivable there. Another way to think about it is probably, you know, the aging of the accounts receivable that I went over in the prepared remarks. You know, we talk about this, I think it's in note 10 of all of our financial statements. Basically, as of this quarter, 91% of our accounts receivable was billed in Q1, another 5% billed in Q4.
You know, those are number one, just improvements over the numbers that we posted in Q4, but also shows very strong collections within the timeframe of about a quarter, which is what we would expect for sure. I think, you know, those two ways of looking at it, the proportion between incremental revenue and the change in accounts receivable and the aging of the receivables can really get across the idea that, you know, our collections are actually very strong and we're having no problems with collections and the cash flow, let's say, drag really is a natural byproduct of really the incredible revenue growth that we've been seeing recently.
All right. Our last question also comes in from Roger. Are you starting to see warrants exercised now that the stock is above $2?
That's a good question too. Thanks, Roger.
Yeah, the warrants that were a part of the brokered life offering that we closed back in September, we are seeing some initial warrants start to trickle in as, you know, the share price has been pretty consistently above $2 now. That is a really exciting time. We can see the cash coming through onto our balance sheet to further strengthen the balance sheet over the near future. We expect that to be the case going forward as well. I think you mentioned that was the last question. Thank you very much, Ali, for reading out the questions. And thank you to everybody who wrote in a question ahead of time. It was great to be able to answer them live on the call here.
I think I just, you know, close out by saying, you know, I really am proud of the progress that we made in Q1. Q1 was an amazing quarter. Again, posted that 16th consecutive quarter of last 12-month revenue growth. It really looks like growth is continued on the radar, on the menu going forward as we finish out the rest of 2025 and on beyond. Like I mentioned, it really is the ball in NTG's court to keep driving that growth, keep providing value for our customers, and continue to manage the costs in a way that will bring that margin through. That's it for today. Thanks again for tuning in, and I'll look forward to checking back with you in a couple of months for Q2. Until then, take care and thank you.