The th ee mo ths e ded Ju e 30, 2026 (“Q2 2026”) eflected lowe t a sactio al device a d p ofessio al-se vice activity, while seve al measu es tied to the quality a d cash cha acte istics of the busi ess imp oved. G oss ma gi i c eased to 45.2% f om 36.5% a yea ea lie , tech ology lifecycle mai te a ce a d suppo t eve ue i c eased 12.4% yea -ove -yea , a d Route1 ge e ated $0.304 millio of cash f om ope ati g activities du i g the qua te .
Route1 e te ed the seco d half of 2026 with its a ualized ecu i g eve ue base co ti ui g to expa d. As of August 1, 2026, a ualized ecu i g eve ue exceeded US$1.4 millio . At the same time, the exte al ma ket a ou d automated lice se plate ecog itio (“ALPR”) is cha gi g quickly as legislatio , p ivacy equi eme ts a d custome expectatio s i c easi gly move gove a ce, auditability a d ope ati g co t ol f om policy docume ts i to tech ology a d day-to-day ope ati g equi eme ts. These cha ges a e c eati g co c ete complia ce, eplaceme t a d mode izatio catalysts ac oss Route1’s ta get ma kets. Route1 is positio ed to co ve t those catalysts, custome deployme ts a d lifecycle eve ts i to ecu i g elatio ships that ca i c ease eve ue quality, Adjusted EBITDA a d f ee cash flow ove time.
Reve ue: was $2.40 millio compa ed with $3.69 millio i Q2 2025, with the dec ease p ima ily eflecti g the timi g a d size of t a sactio al device o de s a d p ofessio al-se vice activity.G oss ma gi : i c eased to 45.2% f om 36.5% i Q2 2025.A ualized ecu i g eve ue base: exceeded US$1.408 millio as of August 1, 2026, compa ed with app oximately US$1.346 millio as of Ma ch 31, 2026.Tech ology lifecycle mai te a ce a d suppo t eve ue: i c eased 12.4% yea -ove -yea to $0.463 millio f om $0.412 millio .Adjusted EBITDA: was positive $0.043 millio compa ed with $0.269 millio i Q2 2025.Ope ati g cash flow: was a positive $0.304 millio compa ed with egative $0.033 millio i Q2 2025.Net loss: imp oved to app oximately $0.001 millio f om $0.061 millio i Q2 2025.Six-mo th ope ati g cash flow: i c eased to $0.403 millio f om $0.094 millio fo the same pe iod i 2025.Six-mo th ope ati g expe ses: decli ed 11.8% yea -ove -yea , while g oss ma gi i c eased to 42.1% f om 38.1%.
Reve ue du i g Q2 2026 was $2.40 millio compa ed with $3.69 millio du i g Q2 2025. Devices a d applia ces eve ue was $1.25 millio compa ed with $2.23 millio , while subsc iptio eve ue a d se vices was $1.15 millio compa ed with $1.47 millio . The yea -ove -yea decli e i subsc iptio eve ue a d se vices p ima ily eflected the timi g of p ofessio al-se vice activity; tech ology lifecycle mai te a ce a d suppo t eve ue i c eased to $0.463 millio f om $0.412 millio .
The mix of eve ue p oduced a mate ially st o ge g oss ma gi . G oss p ofit was $1.09 millio compa ed with $1.35 millio i Q2 2025, while g oss ma gi i c eased to 45.2% f om 36.5%. Ope ati g expe ses dec eased 4.8% to $1.21 millio . Adjusted EBITDA emai ed positive at $0.043 millio a d et loss fo the qua te was app oximately $0.001 millio .
Fo the six mo ths e ded Ju e 30, 2026, Route1 ge e ated $0.403 millio of cash f om ope ati g activities compa ed with $0.094 millio fo the same pe iod i 2025. Ope ati g expe ses decli ed 11.8% yea -ove -yea a d the ope ati g loss befo e othe i come a d expe se imp oved to $0.182 millio f om $0.321 millio .
The ecu i g suppo t compo e t of the busi ess co ti ued to st e gthe eve as total eve ue decli ed. Tech ology lifecycle mai te a ce a d suppo t eve ue i c eased 12.4% to $0.463 millio i Q2 2026 f om $0.412 millio i Q2 2025. Ma ageme t believes the co ti ued g owth of ecu i g suppo t eve ue is a mo e useful i dicato of the di ectio of Route1’s ope ati g model tha qua te -to-qua te fluctuatio s i la ge device o de s a d p oject-based p ofessio al se vices.
“Q2 showed the eco omics we a e buildi g a ou d the busi ess. G oss ma gi expa ded, ecu i g lifecycle suppo t eve ue g ew, a d we ge e ated positive ope ati g cash flow. Si ce qua te -e d, ou a ualized ecu i g eve ue base has moved above US$1.41 millio . Mo e impo ta tly, the ALPR ma ket is movi g apidly towa d st o ge gove a ce, auditability a d custome co t ol, c eati g the type of ope atio al complexity Route1 is built to add ess. We have a mea i gful set of custome oppo tu ities al eady i comme cial, p ocu eme t o app oval p ocesses. Ou job ow is st aightfo wa d: close them, deploy well a d co ve t them i to additio al ecu i g eve ue, EBITDA a d f ee cash flow,” said To y Busse i, Chief Executive Office of Route1.
Du i g the last seve al mo ths, the ALPR ma ket has moved mate ially towa d st o ge gove a ce, p ivacy co t ols a d ope atio al accou tability. Washi gto State e acted ESSB 6002, establishi g a ew statuto y f amewo k fo gove me t ALPR use that add esses pe mitted uses, data ow e ship, sha i g, ete tio , age cy policies, t ai i g a d ove sight. I Califo ia, SB 1013 adva ced du i g August 2026 a d co ti ues to co template tighte co t ols a ou d ete tio , i te -age cy access, use access, employee t ai i g, sea ch justificatio a d complia ce audits. These a e o lo ge abst act policy developme ts; they a e becomi g tech ology-selectio , co figu atio a d day-to-day ope ati g equi eme ts fo public-secto age cies.
The competitive ma ket is cha gi g as well. O August 13, 2026, Flock Safety a ou ced sig ifica t cha ges to its ope ati g model, i cludi g a ecomme ded seve -day default ALPR ete tio pe iod, equi ed case codes fo sea ches, p oactive use lockouts fo ab o mal activity, mo e g a ula i te -age cy sha i g co t ols, ma dato y multi-facto authe ticatio a d a i depe de t cybe secu ity eview. Fo Route1, the sig ifica ce is clea : gove a ce is becomi g p oduct fu ctio ality, validati g the eed fo custome -co t olled a chitectu es backed by impleme tatio , i teg atio a d o goi g ope atio al suppo t.
The competitive questio has the efo e moved beyo d which ve do supplies a came a o softwa e lice se. Public-secto custome s i c easi gly eed a ALPR e vi o me t that ca be a chitected, impleme ted, i teg ated a d co ti uously ope ated withi evolvi g legal a d ope atio al equi eme ts. Route1 competes at this b oade ope ati g laye th ough tech ology deployme t, ecu i g suppo t p og ams, Route1 ABI, field executio a d ope atio al-pe fo ma ce suppo t.
Route1’s a ualized ecu i g eve ue base exceeded US$1.408 millio as of August 1, 2026, compa ed with app oximately US$1.346 millio as of Ma ch 31, 2026. G owth i this base is bei g d ive p ima ily by ecu i g suppo t p og ams, Route1 ABI a d othe o goi g ope atio al e gageme ts. Ma ageme t’s objective is ot simply to add ecu i g co t acts, but to i c ease the ecu i g eco omic value of custome e vi o me ts i which Route1 al eady p ovides tech ology, field se vices o ope atio al suppo t.
The City of Davis, Califo ia a d the Sa ta Ba ba a Police Depa tme t p ovide ece t examples of this model. As a ou ced o August 11, 2026, those t a sactio s ep ese ted app oximately US$0.29 millio of combi ed custome co t act value a d added mo e tha US$25,000 of a ual ecu i g suppo t a d Route1 ABI eve ue befo e p eve tive-mai te a ce se vices. Davis co ve ted a lifecycle ha dwa e eplaceme t i to a highe -value ecu i g suppo t elatio ship, while Sa ta Ba ba a expa ded a existi g deployme t a d Route1 ABI e gageme t.
Route1 e te s the seco d half of 2026 with multiple mu icipal a d u ive sity oppo tu ities that have p og essed beyo d i itial busi ess-developme t discussio s i to comme cial, p ocu eme t o se io -app oval p ocesses. Seve al co template ew o expa ded ecu i g ope atio al p og ams, i cludi g i dividual a ual ecu i g- eve ue oppo tu ities a gi g f om app oximately US$20,000 to mo e tha US$100,000, togethe with elated tech ology-deployme t oppo tu ities that i ce tai cases ep ese t seve al hu d ed thousa d dolla s of pote tial p oject eve ue. These oppo tu ities a e ot i cluded i Route1’s ecu i g- eve ue base u less a d u til awa ded. The Compa y’s immediate p io ity is co ve sio : secu i g awa ds, deployi g successfully a d tu i g that activity i to additio al ecu i g eve ue, EBITDA a d f ee cash flow.
Route1 also has a sig ed e te p ise auto omous pa ki g-e fo ceme t deployme t fo which the equi ed deposit has bee eceived a d i stallatio is late this mo th. The p oject exte ds Route1’s ope ati g model i to auto omous e fo ceme t a d p ovides a othe live ope ati g e vi o me t i which to demo st ate i teg atio , field executio a d ope atio al suppo t. I pa allel, the Compa y is adva ci g additio al mu icipal a d u ive sity oppo tu ities i volvi g ecu i g ope atio al suppo t, Route1 ABI, lifecycle mode izatio a d ew tech ology deployme ts. Route1 does ot ide tify p ospective custome s befo e a awa d o executed ag eeme t pe mits disclosu e; ma ageme t i te ds to epo t mate ial custome wi s as they a e secu ed.
Route1 is also co ti ui g to adva ce the i tellectual-p ope ty fou datio suppo ti g its ope atio al-i tellige ce st ategy. Du i g August 2026, Compa y cou sel completed a co st uctive i te view with the U.S. Pate t a d T adema k Office exami e ega di g Route1’s pa ki g copilot pate t applicatio . The applicatio is bei g p osecuted u de a accele ated exami atio p ocess. Cou sel is p epa i g a espo se to the cu e t Office Actio based o the exami e ‘s feedback, which i cluded suggestio s fo add essi g the cu e t claim ejectio s.
Route1 also a ou ced the appoi tme t of Da Fuccello as P eside t a d a office of the Compa y. M . Fuccello will be espo sible fo d ivi g comme cial executio a d ope ati g pe fo ma ce as Route1 wo ks to co ve t its cu e t oppo tu ity set i to awa ded busi ess, ecu i g eve ue a d imp oved ope ati g esults.
Subsc iptio eve ue a d se vices | 1,151 | 981 | 1,041 | 1,203 | 1,466 | Devices a d applia ces | 1,246 | 1,572 | 1,596 | 1,758 | 2,233 | Othe | 2 | 14 | – | (7 | ) | (8 | ) | Cost of eve ue | 1,313 | 1,560 | 1,610 | 1,775 | 2,343 | Ope ati g expe ses | 1,213 | 1,062 | 1,186 | 1,136 | 1,274 | Total othe i come (expe se) | 140 | (28 | ) | (163 | ) | 212 | (111 | ) |
Dep eciatio a d amo tizatio | 171 | 180 | 178 | 176 | 195 | Ope ati g p ofit (loss) | (128 | ) | (54 | ) | (159 | ) | 44 | 74 |
Applicatio softwa e | 3 | 13 | 16 | 14 | 15 | P ofessio al se vices | 685 | 503 | 587 | 776 | 1,039 |
Adjusted EBITDA is calculated as ope ati g i come o loss befo e dep eciatio a d amo tizatio a d stock-based compe satio . Adjusted EBITDA is a o -IFRS fi a cial measu e a d does ot have a sta da dized mea i g u de IFRS. It may the efo e ot be compa able with simila ly titled measu es p ese ted by othe issue s.
Route1 helps o ga izatio s usi g lice se plate ecog itio , secu e-access a d othe data-captu e tech ologies avigate ope atio al cha ge a d imp ove ope atio al pe fo ma ce. The Compa y combi es softwa e, e gi ee i g, p ofessio al se vices, ecu i g suppo t p og ams a d elated tech ology solutio s to help custome s ope atio alize cha ges a isi g f om legislatio , cybe secu ity equi eme ts, a tificial i tellige ce, agi g i f ast uctu e a d evolvi g ope ati g eeds. Route1 t ades o the TSX Ve tu e Excha ge u de the symbol ROI.
Fo Mo e I fo matio , Co tact:
To y Busse iChief Executive Office +1 480 578-0287
This ews elease, equi ed by applicable Ca adia laws, does ot co stitute a offe to sell o a solicitatio of a offe to buy a y of the secu ities i the U ited States. The secu ities have ot bee a d will ot be egiste ed u de the U ited States Secu ities Act of 1933, as ame ded (the “U.S. Secu ities Act”) o a y state secu ities laws a d may ot be offe ed o sold withi the U ited States o to U.S. Pe so s u less egiste ed u de the U.S. Secu ities Act a d applicable state secu ities laws o a exemptio f om such egist atio is available.
Neithe the TSX Ve tu e Excha ge o its Regulatio Se vices P ovide (as that te m is defi ed i the policies of the TSX Ve tu e Excha ge) accepts espo sibility fo the adequacy o accu acy of this elease.
© 2026 Route1 I c. All ights ese ved. No pa t of this docume t may be ep oduced, t a smitted o othe wise used i whole o i pa t o by a y mea s without p io w itte co se t of Route1 I c. See https://www. oute1.com/te ms-of-use/ fo otice of Route1’s i tellectual p ope ty.
This ews elease may co tai stateme ts that a e ot cu e t o histo ical factual stateme ts that may co stitute fo wa d-looki g stateme ts o futu e-o ie ted fi a cial i fo matio . These stateme ts a e based o ce tai facto s a d assumptio s, i cludi g expectatio s ega di g the Compa y’s ecu i g ope atio al p og ams, Route1 ABI, i tellectual-p ope ty st ategy, comme cializatio activities, custome oppo tu ities, ma ket t e ds, legislative a d egulato y developme ts affecti g ALPR, expected fi a cial pe fo ma ce a d subsc iptio -based eve ue, busi ess p ospects, tech ological developme ts, developme t activities a d like matte s. While Route1 co side s these facto s a d assumptio s to be easo able, based o i fo matio cu e tly available, they may p ove to be i co ect. These stateme ts i volve isks a d u ce tai ties, i cludi g but ot limited to ma ket dema d fo the Compa y’s p oducts a d se vices, timi g of custome p ocu eme t a d awa ds, the Compa y’s ability to ge e ate positive cash flow a d obtai fi a ci g whe equi ed, a d isk facto s desc ibed i epo ti g docume ts filed by the Compa y. Actual esults could diffe mate ially f om those p ojected as a esult of these a d othe isks a d should ot be elied upo as a p edictio of futu e eve ts. The Compa y u de takes o obligatio to update a y fo wa d-looki g stateme t o futu e-o ie ted fi a cial i fo matio to eflect eve ts o ci cumsta ces afte the date o which such stateme t is made, o to eflect the occu e ce of u a ticipated eve ts, except as equi ed by law. Past pe fo ma ce is ot a gua a tee of futu e pe fo ma ce.
