D-BOX Technologies Reports Record Revenues and Strong Net Profit in Third Quarter Fiscal 2025

D-BOX reports record Q3 2025 revenue of $13.3M (+65% YoY), $2.6M Adjusted EBITDA (19% margin), & $1.5M net profit, while reducing debt by $1M

Record total revenues of $13.3 million, up 65% vs. Q3 2024; Year-to-date 2025 cash from operating activities of $5.4 million

MONTREAL, QUEBEC ( February 12, 2025 ) -

D-BOX Technologies Inc. (“D-BOX” or the “Company”) (TSX: DBO) a world leader in haptic and immersive experiences, today reported financial results for the third quarter ended December 31, 2024.

“Since taking on the role of CEO at D-BOX, I have been privileged to work alongside the talented team that has come together over the past five years to execute a strategy that is driving strong topline and bottom-line results. We are now focusing on our best-performing commercial markets, those that align with our unique IP and platform, while optimizing operations for cost efficiency” said Sebastien Mailhot, President and Chief Executive Officer of D-BOX.

Q3 2025 Operating Results

In the third quarter, total revenues reached a record $13.3 million, up $5.2 million, or 65%, over the prior year. This included a record $10.1 million from system sales, up 52%, and $3.2 million in royalties, more than double the prior-year period.

Our system sales in the Entertainment markets totalled $8.2 million–covering theatrical and sim racing markets, two key commercial markets—saw a $3.7 million increase, or 82% over the prior year. Revenue growth was primarily driven by the continued large-scale rollout of systems to major theatrical customers, including 51 net new screen installations, compared to 19 last year and 27 two years ago—nearly doubling on a two-year basis. Results underscore the successful execution of our strategy, with the theatrical industry recovery also contributing to growth in the quarter, as system sales in the prior year were impacted by the Hollywood labour stoppage and delayed capital spending. Entertainment system sales were further supported by the expansion of sim racing centers, highlighted by the opening of a new location of the F1 Arcade rollout in Washington. Our third key commercial market, Simulation and training, closed the quarter with $1.9 million in system sales, down $0.2 million or 9% from the prior year, reflecting the timing of certain industrial customers transitioning to the next generation of D-BOX products. Favourable movements in currency exchange rates also contributed positively to the quarter’s results.

Additionally, having surpassed the milestone of 1,000 screens as of December 31, 2024, and with the combined success of multiple blockbusters, royalties in the quarter totalled $3.2 million, also benefiting from favourable movements in currency exchange rates. Box office hits for the quarter included “Moana 2,” “Venom: The Last Dance,” “Sonic the Hedgehog 3,” and “Mufasa: The Lion King,” reflecting a broader blockbuster offering compared to the previous year. Overall, we are pleased with two consecutive quarters of record total revenues, highlighting our expanding footprint and the improving industry backdrop. While we highlight this outperformance, it is important to consider the variability and seasonality in quarterly sales and the importance of assessing D-BOX’s performance over a trailing twelve-month period. It is also important to note that we are closely monitoring the evolving U.S.-Canada tariffs situation and actively evaluating potential measures to minimize any impact on our operations in the fourth quarter and beyond.

D-BOX generated gross profit of $6.7 million, up $3.0 million versus the prior year, driven by higher revenues and improved margin performance. Gross margin of 50%, increased by 4 percentage points from 46% last year, primarily due to a higher proportion of revenues from royalties and the favourable impact from currency exchange rates in the quarter. We emphasize the significant positive impact that a higher proportion of royalties, as part of our total revenues, has on our profitability. However, we caution that this revenue stream can fluctuate due to the seasonality of new theatrical releases and varying consumer responses.

Operating expenses of $5.0 million in the third quarter were up $1.0 million or 26% over the prior year, mainly reflecting a foreign exchange loss as well as increased R&D expenses driven by the development of the next generation of products and software. As a percentage of sales, operating expenses of 38% improved by 12 percentage points, reflecting sales leverage. The Company generated operating income of $1.6 million, or 12% of total revenues, compared to a $0.3 million operating loss, in the same quarter last year. Adjusted EBITDA was $2.6 million, or 19% of total revenues, up from approximately nil a year ago. As a result, the Company achieved a net profit this quarter of $1.5 million compared to a net loss of $0.4 million a year earlier.

Through strong free cash flow generation in the quarter, D-BOX reduced long-term debt by $0.9 million, further strengthening its balance sheet and providing increased financial flexibility. Additionally, with a solid cash position and undrawn credit facilities totalling $14.3 million of liquidity at the end of the quarter, the Company is well positioned to support its strategic initiatives and navigate potential risks and uncertainties.

Year-to-date Operating Results

Total revenues for the nine months ended December 31, 2024 were $34.2 million, up $4.8 million, or 16%. This growth was driven by the successful execution of the D-BOX strategy combined with an improved industry backdrop, compared to a weaker performance last year, which was impacted by the Hollywood labour stoppage. Total revenues for the nine-month period consisted of $25.4 million in system sales and $8.8 million in royalties. Sales growth was primarily driven by a $3.5 million increase, or 23%, in Entertainment system sales, despite a $1 million headwind from exiting the direct-to-consumer market as part of our strategy to focus on our best-performing commercial markets. Additionally, revenue from royalties rose by $2.2 million, or 34%, compared to the prior year, partially offset by $1 million, or 14%, decline in Simulation & Training system sales. Gross margin of 52% increased 5 percentage points compared to last year reflecting a higher proportion of revenues from royalties, and the impact of exiting the lower-margin direct-to-consumer hardware market. Operating margin of 11% and adjusted EBITDA margin1 of 17% increased by 8 and 9 percentage points, respectively, compared to the prior year, driven by higher gross margin and the benefit of operating sales leverage. Reflecting significantly lower financial expenses compared to last year, net profit totalled $3.3 million, up seven-fold from the same period last year. Cash flows from operating activities totalled $5.4 million compared to $2.6 million in the prior year, mainly due to higher net profit.

Notice of Video Investor Presentation

Management of D-BOX will be publishing a video presentation to investors on the Corporation’s website at https://www.d-box.com/en/investor-relations on Friday, February 14, 2025, at 9:00 am ET. During the presentation, management will discuss the Corporation’s second quarter results and outlook. Investors are invited to submit relevant questions in advance by email to investors@d-box.com.

This release should be read in conjunction with the Company’s audited consolidated financial statements and the Management’s Discussion and Analysis dated February 12, 2025. These documents are available at www.sedarplus.ca.

Non-IFRS Financial Performance Measures*

D-BOX uses the following non-IFRS financial performance measures in its MD&A and other communications. The non-IFRS measures do not have any standardized meaning prescribed by IFRS and are unlikely to be comparable to similarly titled measures reported by other companies. Investors are cautioned that the disclosure of these metrics is meant to add to, and not to replace, the discussion of financial results determined in accordance with IFRS. Management uses both IFRS and non-IFRS measures when planning, monitoring and evaluating the Company’s performance. The non-IFRS performance measures are described as follows:

1. EBITDA represents earnings before interest and financing, income taxes and depreciation and amortization. Adjustments to EBITDA are for items that are not necessarily reflective of the Company’s underlying operating performance. As there is no generally accepted method of calculating EBITDA, this measure is not necessarily comparable to similarly titled measures reported by other issuers. Adjusted EBITDA provides useful and complementary information, which can be used, in particular, to assess profitability and cash flows from operations. Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenues.

Non-IFRS and other Financial Performance Measures

D-BOX uses the following non-IFRS financial performance measures in its MD&A and other communications. The non-IFRS measures do not have any standardized meaning prescribed by IFRS and are unlikely to be comparable to similarly titled measures reported by other companies. Investors are cautioned that the disclosure of these metrics is meant to add to, and not to replace, the discussion of financial results determined in accordance with IFRS. Management uses both IFRS and non-IFRS measures when planning, monitoring and evaluating the Company’s performance. The non-IFRS performance measures are described as follows:

EBITDA

EBITDA represents earnings before interest and financing, income taxes and depreciation and amortization. Adjustments to EBITDA are for items that are not necessarily reflective of the Company’s underlying operating performance. As there is no generally accepted method of calculating EBITDA, this measure is not necessarily comparable to similarly titled measures reported by other issuers. Adjusted EBITDA provides useful and complementary information, which can be used, in particular, to assess profitability and cash flow from operations. Adjusted EBITDA margin is defined as adjusted EBITDA divided by total revenues. A reconciliation of net profit to adjusted EBITDA margin is included below.

Total Debt, Net Debt and Total Debt to Adjusted EBITDA

Total debt is defined as the total bank indebtedness, long-term debt (including any current portion), and net debt is calculated as total debt net of cash and cash equivalents. The Company considers total debt and net debt to be important indicators for management and investors to assess the financial position and liquidity of the Company and measure its financial leverage. These measures do not have any standardized meanings prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Total debt to adjusted EBITDA ratio is calculated as total net debt divided by the last four quarters adjusted EBITDA. We believe that total debt to adjusted EBITDA is a useful metric to assess the Company’s ability to manage debt and liquidity.

Supplementary Financial Measures

Gross margin is defined as gross profit divided by total revenues.

Operating expenses as a percentage of sales are defined as operating expenses divided by total revenues.

Operating margin is defined as operating income divided by net sales.

About D-BOX
D-BOX creates and redefines realistic, immersive entertainment experiences by moving the body and sparking the imagination through effects: motion, vibration and texture. D-BOX has collaborated with some of the best companies in the world to deliver new ways to enhance great stories. Whether it’s movies, video games, music, relaxation, virtual reality applications, metaverse experience, themed entertainment or professional simulation, D-BOX creates a feeling of presence that makes life resonate like never before. D-BOX Technologies Inc. (TSX: DBO) is headquartered in Montreal with offices in Los Angeles and China. Visit D BOX.com.