BeWhere Holdings Inc. (TSXV: BEW) reported record quarterly EBITDA and adjusted EBITDA for the three months ended June 30, 2026, alongside annual recurring revenue growth of 46%, in results published on August 20, 2026. The Toronto mobile internet of things company also reported that total revenue fell 9% over the same period, which is the tension at the centre of the quarter.

Total revenue was $5,003,122 against $5,519,689 a year earlier, a decrease of $516,567. Total recurring revenue rose 27% to $2,552,088 from $2,005,455, an increase of $546,633. Annual recurring revenue stood at just over $12.0M at June 30, 2026 compared with $8.2M a year earlier.

Mix, not volume, drove the record

Gross profit was a record $2,199,891 against $1,440,915, up 53%, which the company attributed to a favourable sales mix. EBITDA rose 208% to $844,566 from $274,610, for a margin of 16.9%. Adjusted EBITDA rose 56% to $966,762 from $618,297, a margin of 19.3%. Total comprehensive net income was $652,241, described by the company as the second highest in its history, against a net loss of $131,781 in the same period of 2025.

Chief operating officer and co-founder Chris Panczuk put the operating leverage in cash terms, saying recurring revenues grew by nearly $550k while operating expenses increased by $160k, and that recurring revenue gross profit exceeded total operating expenses by about $102k and cash operating expenses by roughly $200k. Chief executive and co-founder Owen Moore framed the quarter against the company’s own targets, saying BeWhere delivered annual recurring revenue growth of 46% reaching over $12M while yielding an adjusted EBITDA margin of 19.3%.

The balance sheet ended stronger. Working capital was $12,960,338 at June 30, 2026 against $7,280,250 a year earlier, up 78%. Cash and cash equivalents were $9,138,217, including net proceeds from an equity offering and after accounting for the SecureQuip acquisition, compared with $4,496,026 a year earlier.

Where the recurring revenue came from

Two transactions earlier in the year sit behind these numbers. On February 19, 2026 BeWhere closed a brokered private placement of 7,150,000 common shares at C$0.70, including 1,430,000 shares from the full exercise of the agents’ over-allotment option, for gross proceeds of C$5,005,000, with Canaccord Genuity Corp. as lead agent and sole bookrunner alongside Roth Canada Inc.

The financing was conducted under the listed issuer financing exemption in Part 5A of National Instrument 45-106. That exemption lets a reporting issuer with listed equity securities distribute without a prospectus, subject to conditions: the issuer must not be one whose principal asset is cash or its exchange listing, must be current on periodic and timely disclosure, must not allocate the funds to a significant acquisition under Part 8 of National Instrument 51-102 or to a restructuring transaction, and cannot raise so much that the distribution, combined with others in the preceding 12 months, increases outstanding listed equity securities by more than 50%. The size ceiling is set as the greater of a fixed dollar figure and 10% of the aggregate market value of the issuer’s listed securities, itself capped.

On June 3, 2026 the company’s subsidiary BeWhere Inc. acquired all issued and outstanding shares of SecureQuip Systems Ltd., an Ontario asset tracking provider founded in Midland in 2002 with approximately 11,000 tracking devices operating in the North American market. The base purchase price was $789,000 in cash, subject to customary closing adjustments. The vendor also retains an earn-out entitling him to 100% of the net income generated by SecureQuip’s stolen equipment recovery services on contracts in existence at closing and units supplied afterwards. Moore said at the time the deal put post-transaction pro forma annual recurring revenue at over $12M.

The first quarter gives the run-up. For the three months ended March 31, 2026, total revenue was $4,701,418, up 12%, recurring revenue was $2,444,828, up 14%, and annual recurring revenue stood at approximately $9.7M against $8.3M a year earlier. Adjusted EBITDA was $652,658, a margin of 13.9%, which the company called a 600 basis point expansion over the prior year period. BeWhere also set out three-year objectives it calls Vision 20/20 Plus, targeting more than $20M in annual recurring revenue exiting 2028 and a 20% adjusted EBITDA margin run-rate.

Analysis: recurring revenue up, hardware revenue down

The headline pairing of record profitability with a 9% revenue decline resolves once the two revenue lines are separated. Recurring revenue rose by $546,633 while total revenue fell by $516,567, which means the non-recurring line, principally device sales, fell by more than a million dollars year over year. Gross profit still rose 53%. A business selling fewer trackers at hardware margins while billing more subscriptions at software margins will show exactly this shape.

That is the model working as described, but it carries a specific risk that the quarter’s numbers do not settle. Recurring revenue in this business is generated by devices in the field, and devices are sold before they subscribe. A quarter in which hardware shipments fall is a quarter in which the future subscription base grows more slowly, unless the decline reflects mix or timing rather than demand. BeWhere attributed the gross profit record to favourable sales mix and did not break out unit volumes in the release, so the distinction between fewer devices and cheaper devices is not established here.

The ARR trajectory also needs the acquisition held constant. Annual recurring revenue moved from approximately $9.7M at March 31 to just over $12.0M at June 30. SecureQuip closed on June 3 with approximately 11,000 devices in the field, and Moore had described post-transaction pro forma ARR of over $12M when announcing it. The sequential step and the acquisition are therefore substantially the same event. Measured against the $8.2M reported a year earlier, the 46% growth rate includes acquired revenue, and the release does not separate organic from acquired ARR.

The earn-out on the stolen equipment recovery business sets where that line’s profits go. The vendor keeps 100% of the net income from that line on contracts existing at closing and on units he continues to supply. BeWhere paid $789,000 for the company and described the asset recovery market as higher margin; under the earn-out the net income from the recovery contracts in existence at closing flows to the vendor until those contracts expire. What BeWhere bought immediately is the tracking base and the customer relationships, not that income stream.

Against the Vision 20/20 Plus targets, the quarter already reached a 19.3% adjusted EBITDA margin, close to the 20% run-rate objective set for 2028, while ARR at just over $12.0M is well short of the more than $20M target. The margin objective looks reached ahead of schedule in a single strong-mix quarter; the revenue objective needs another $8M of recurring revenue over roughly two and a half years. With $9,138,217 of cash and a stated appetite for acquisitions in the growth plan, the observable question in coming quarters is whether ARR keeps climbing when no acquisition closes inside the period.