VerticalScope Holdings (VFORF) Q3 2026 Earnings Report

The call was broadly positive despite lower revenue, weaker advertising trends, reduced adjusted EBITDA and an expected Q4 decline in MAU. Management emphasized strong cash generation, debt reduction, cost savings, a stable core audience, progress in Applied AI, growing commerce revenue on Fora and the signing of two AI data agreements. The company also expects the Audience Engine pullback to have little material impact on the top line.

For Q4, reported MAU will be lower than Q3 as Audience Engine is not operating, with another quarterly drop and then that as the base to grow from into 2027, while revenue is not expected to move much and the impact on the top line is not going to be material; ARPU is expected to improve, with a seasonal lift in Q4. The company continues to expect 30% or better margins on a full year basis, expects between 30% and 40% margins with the expected drop in MAU, and is targeting free cash flow conversion of 80% or better for the full year. The realignment is expected to reduce annualized costs by approximately $4.4 million, with approximately 2 months savings in Q4 and approximately $1.6 million in onetime termination costs; leverage is expected to keep trending toward 1x in the coming quarters. Most revenue from the training data agreement is expected in Q4, the usage-based agreement will start generating revenue in November, and historically organic growth has been in that kind of 5% to 10% range, which is what the company is trying to aim for.