Martijn Van den Bemd: Alright. Good morning once again. Thank you for joining us. Great to see this turn up. Earlier this morning, Adcore released its Q2 26 financial results. And today, we will be walking you through these results and providing you an update on the ongoing company initiatives. First of all, you might see some familiar faces on the call today. I am Martijn. Chief partnership officer here at Adcore. Joining me today is Omri Brill, Adcore's CEO and founder. And also Amit Konforty, Adcore's CFO. And, also, Kobi will be here to present some great insights on our AI studio. For the agenda today, before we begin, we will go over some forward looking statements you should be aware of while listening to this call. Followed by the CEO opening remarks and the latest innovations on our AI studio done by Kobi and then the CFO financial highlights. Finally, we will conclude with a Q&A session. If you have any questions throughout the call, please use the submit a question feature here in Zoom, and we will get to those at the end of the call. Before we begin, I will give everyone a moment to review these statements. Please bear in mind when listening to the call today that the management team may use forward looking statements which are inherently uncertain in nature. Alright. And with that, I would like to pass the floor to Omri for the CEO's opening remarks. Omri, the floor is yours.
Omri Brill: Thank you very much, Martijn, and good morning, everyone. it is my pleasure to discuss the company financial results for Q2 26. I am going to give, let's say, the high level of the results, obviously covering some of the work that we have been doing innovation. Working during the last quarter. Obviously, we have some nice presentation to show you on the back of my remarks. And our CFO, Amit Konforty, will dive into the numbers in more details. After that. So let's start with it. Okay. Stick in. Yeah. Under view and then full screen, you will be able to start the full screen in the-- here in the bottom. Yeah. So yeah. Thank you for that. Okay. So all in all, Q2 was a very strong quarter for us. Top line revenue grew by 10%. Gross profit even doubled up. This grew by almost 20%. So we see a really positive trend. And when we look at the numbers, also numbers, you will see that this is was not the usual quarter for us. So if you look at top line revenue, it amounted to 7.2 million in Q2 26 compared to 6.5 in the previous year. Again, 10% year on year growth. And gross profit, 3.7 million in Q2 26 compared to 3.1 in the previous year. Can see that the gross profit was almost as strong as Q4 25, and that is Q4. it is, let's say, a robust quarter for us. So, basically, in Q2, we have been able to achieve almost a strong number as Q4. that is tell you a lot about how unique in that regard this quarter was. And if you look at, let's say, quality metrics, what the company considers quality metrics, we can still see that, again, gross profit is 3.7, almost 20% year on year growth. Cash position still solid of $4 million. During this quarter. Again, you see some seasonality. Right? In Q4, the company usually acquire more cash, and then the cash position is going down as the quarter move along. But again, something that is part of, I would say, the normal course of business for the company. And so to discuss numbers, high level again, 7.2 million top line revenue, a 10% increase. Gross profit 3.7, almost 20% year on year increase. Email revenue grew by 12%, which is solid. And North America saw a really nice rebound. It grew to $1.5 billion, almost 30% year on year. Increase. And that is on the back of, I would say, soft years that we saw in 2025 for this region. So, basically, this is exactly what we anticipated. We say, that we would expect to see some stabilization starting in the beginning of the year. And now a nice rebound move in this last quarter, so that is important for us. If you look at H1, so again, very strong start of the entire year. Total revenue almost $16 million. 16% year-on-year growth. that is impressive. Gross profit, grew to almost $7 million. Again, 10% year on year growing in, I would say, year on year. APAC, 23% year-on-year growth. that is MAPFEV, EMEA, 8% year-on-year growth. And North America, again, a softness that we saw in the beginning of, let's say, the year and the and the and 2025, down 6%. So back in positive trends, so all regions actually are growing in H1 2026, and that is exactly how we would like to see it moving forward. And now I would like to discuss a bit more technology and innovation in the last earning call, we already discussed that we built and ship the first AI agent for, supposedly, the inbound agent. And basically, you can think of the inbound agent as a receptionist. So that is the guys that are selling the phones that coming to the companies that are doing the emails that can sit on the WhatsApp, on the Facebook Messenger. All different channels. And basically, 1 agent that can do the work of 1 person, of 10 receptionist, or even a team of 100 receptionist. So that is all done by this agent, but it does not stop at just answering questions and giving information. It can literally send proposal. It can send payment request, ticket, you know, sell tickets. So this agent can do everything. It can do an online. It can start a conversation, send a proposal, and make sure this proposal is signed. And it does not matter which channel we are talking about. it is been done by email. it is been done by it can send you an SMS link with the proposal. Everything. So that was the first agent was already built and shipped in Q1 2026. And then we have we said that we committed to build another 2 agents during Q2 26. But guess what? But we believe we built 4. So we built and shipped the outreach agent, which is basically like an SDR. This agent can go over or walk over, let's say, old lead, cold lead, and basically makes them warm again and see if there is a sales opportunity to this database, for example. Deal agent taking it to-- like, it started to play when the proposal already sent. it is like a salesperson. It does the follow-up. It makes sure that everything is clear about the proposal. Maybe you offer some kind of discount, but basically, this agent is responsible for the for the deal to get closed. And customer agent taking its responsibility to start when the offer already closed. Basically, make sure that the client is happy, satisfied, give him an update. It can do a collection if needed. It can do upsell and cross-sell. So everything that is more or less, I would say, post sell type of activity Again, between the inbound, outreach, deal, and customer agents, you have your entire sales team. And that is not like a slogan. that is what is already up and running in reality on the ground. We are super happy about it. Actually, the fifth agent is AI studio agent which Kobi is going to cover in a bit more detail? So I am seeking proposal in 6 months' time, we did the complete platform where I would say flip over the platform from a workspace document type of platform to a generative first, agent-first platform. Which workspace and basically documents are now tools in the agent's toolbox. So, basically, it is a complete, I would say, upside down for the platform used to be. So it is not like agents are sending the documents Now the agent basically, the document serving the agents. And that is a complete, I would say, a complete evolution of where the platform is today. And that is a big promising moving forward, and we can discuss it more detail if needed during the QA session as well. And now the next thing is AI Studio. AI Studio is already up and running and generating some early revenues. We have really good traction in good sign for good market fit about this a product. Colby will give you a quick demo about the latest and greatest. What we have been able to build and ship during the last quarter in AI studio as well. So I think, like, stay tuned for Kobi's presentation. And I think, like, this cover, I would say, the highlights of the technologies that we have been building on working on during the last quarter. And last but not least, it is comparable. Going to share price is CAD 0.15. We see a very big upside, if you look at EV to gross profit compared to comparable. almost 900%. Let's put the target price at around CAD 1.30. it is a big gap from where we are today. And ideally, we would at least we would like to see the gap starting to close. Basically, the company high expectation from the future where this company is going to. This high level of innovation maybe like never before in the history of the company. And we are very optimistic of the level of maturity that our products have achieved already. And I think, like, it is still going to be an interesting time for us, you know, making sure that basically these apps are already generating revenue and we can take them to the next level. For with that, I conclude my remarks, and I will hand the floor, I guess, now to Kobi.
Kobi: Thank you, Omri. Hi, everybody. I am Kobi, and leading the go to market of the AI Studio app. Basically in charge of, generating revenue out of the platform. Now I know in our last earning calls, you have seen the app already. You got excited of seeing how cool it is. So it actually became even cooler. In the last month. We actually added some really, really cool and really smart features that we can see our clients that are already using it, how excited they are, and how it is going to save a lot, a lot of time and a lot of resources. For our partners. So I am gonna show you today. I am gonna focus on how we generated a special flow that allows users to create any kind of creative format from a single static banner. It could be a banner that you created on our platform. It could be a banner that you created by yourself. But in a single static banner, you will be able to generate all the way to motion banners, moving to a UGC, user-generated content, like influencers and TikTok. Videos, and all the way to a TV production, a CTV production commercial, only in a single click. Sounds a bit like magic, but it is already here. Already working on our platform. Let me share my screen to show you the full on example. So, actually, I started putting in a brief a very simple 1-line brief saying, generate me a static banner for a promotion sale, 30% off, and Sunny, it is a cosmetic, sun brand giving a bit of glow, attracting women. So the platform generated 4 different design concept By the way, that is itself if someone knows a bit about how advertising studios work. Takes about 5, 6 hours work. That took me less than 1 minute to generate. So they generated those 4 different creative static. Let's say I am in love with this 1. This 1 is my favorite. So I am just clicking here And with that single click, I can create a motion banner, a UGC, user generated content video, or a full on commercial. Let's see how it actually looks like. So I am clicking the motion banner. Let's see the end result. I am getting this.
Omri Brill: Kobe, maybe you need to share again with sound.
Kobi: I am sorry. 1 second. Yeah. Yeah. that is it. Let's try it again. Sorry about this. So interesting fact about, motion banners. Actually, what we know from research and our own experience, that motion banners are able to double the conversion rate of a campaign, reduce dramatically the cost per conversion, and generate just much better results. Again, there is no need to produce. there is no need for an AI motion design-- look, sorry, for a motion designer to generate those things. Clicking a button anyone can do that. Really, I am not a designer, and I have done it myself. So take this motion banner. I want to even challenge it even more. I want to now go live on TikTok, for example, with an influencers talking about this amazing product. I click user generated content, and I get this amazing thing. What it actually did, it took the person, the girl from the banner generated her as an avatar, and was able to generate a UGC, a full influencer video in a click of a button, I always forgot to reapply sunscreen, honestly. Now this Sunny SPF 50 stick lives in my tote. Twist. Swipe over makeup, every 2 hours. I always We are talking here about a video that usually cost a few thousands of dollars to produce. Takes days, and finding the creatives and everything and come on. For me, it is magic. I do not know what about you guys. Moving on, I wanna challenge it even more. I want to go live now on a CTV campaign, YouTube campaign with a commercial full on commercial addressing general audience. That is possible as well in a single click. Bag, palms, sunlight. Swipe it on in seconds. SPF 50, glow still going. Looks amazing. I know. Now, let's put it this way. Using the platform, it is super, super easy, but this month, it became even easier for our users to use it. We added our AI agent, which is embedded within the Adcore AI Studio app. You can just ask whatever you want, generate a banner, generate a commercial, generate a picture. Whatever you want, you can use the AI agent. To do it for you. Without saying too much. Just say us what you want to be in the banner and the AI take it from there. You know what? You know what? You are even more lazy than we think. We do not you do not have any strengths. You do not mean want to leave your own AI agent the AI program that you are using. I am using Claude. Some people using ChatGPT. And you want to use our platform to that AI platform? Simple. It is with an MCP, with our new MCP connector, you can just go in, connect it to ChatGPT, connect it to cloud, whatever AI you are working on saying, create a banner with Adcore AI Studio by just add the brand name. What is the discount, and it is automatically generating. In a click of a button, you get a full set of banners And, of course, from that, again, you can create a UGC, a commercial, and so on. So, obviously, bottom line with dramatically improved the platform. We continue working. there is a lot of things. Sorry. I am gonna stop the share. there is a lot of things coming in this month in already in development. But as you can see, every single day, this app is improving. There are already active paying clients for the app, and a lot of people are on just on the step of joining in. So more to come. Stay tuned. Thank you.
Martijn Van den Bemd: Thanks so much, Kobi Amazing to see how much it developed since the last time we met. At the Q1 26 earnings call. So it is amazing progress, and love to learn more in the next update. With that, we would like to pass it on to Amit Konforty, CFO of the company, for some CFO highlights. And financial highlights.
Amit Konforty: Thank you. Then 1 second. Okay. So good morning, everyone. Before beginning the financial overview, I would like to remind you that the following discussion will include GAAP financial measures as well as non GAAP results. All amounts will be presented in Canadian dollars. The second quarter of 2026 showed continued momentum with revenue growing 10% year-over-year and gross margins improving to 51%. This is in line with the overall first half performance, which also reflects higher revenue and gross profitability. Let's review in more detail. For the 3 months ended June 30, 2026, we delivered revenue of $7.2 million, compared to $6.5 million in the same period of 2025 an increase of $700 thousand or 10%. Gross profit for the 3 months ended 06/30/2026 was $3.7 million, compared to $3.1 million in the prior year an increase of $600 thousand or 19%. Gross margins for the 3 months ended 06/30/2026 were 51%, compared to 47% in the same period last year, The increase in margin is due to the increase in and the change in client mix. As for operational expenses, R&D expenses for the quarter were $600 thousand compared to $500 thousand in the prior year. The slight increase in expenses was primarily driven by increased use of AI-related tools. SG&A expenses for the quarter were $3.7 million compared to $3 million in the prior year, an increase of $700 thousand or 22%. The increase was mainly driven by payroll related expenses and was partially impacted by foreign exchange rate fluctuations. Operating loss for the 3 months ended June 30, 2026, was $600 thousand compared to $500 thousand in the same period last year. Net loss for the 3 months ended 06/30/2026 was $800 thousand compared to $400 thousand in the same period last year an increase of $400 thousand. Revenues and gross profits. As shown on the left side of the slide, Q2 revenue grew 10% year over year to $7.2 million with gross profit increasing 19%, and gross margin improving from 47% to 51%. This is driven again by changes in client mix. Looking at the first half results, in the middle, we observed a similar trend with revenue growing 16% to $15.7 million and gross profit increasing 10% to $6.8 million. This is consistent with the full year trend on the right which highlights ongoing annual growth in both revenue and profitability. As for the geographical breakdown for Q2 26, APAC revenue continued to grow year over year. EMEA revenue grew 12% year-over-year, primarily due to new client acquisition and expanded activity. From existing clients North America revenue rebounded after a slower prior year delivering a 27% year-over-year increase. In terms of financial position, we had cash and cash equivalents of $4 million as of June 30, 2026, compared to $10.3 million at December 31, 2025. Total working capital amounted to $3.1 million, compared to $5.1 million on December 31, 2025. As for the liability side of the financial position, we can see that the company is still debt free. Adjusted EBITDA. The quarterly non GAAP results reflects adjustment for the following items: depreciation and amortization, share based payment and other unusual and nonrecurring items. For the 3 months ended 06/30/2026, adjusted EBITDA was $41 thousand compared to $155 thousand for the same period in 2025. The decrease in adjusted EBITDA was mainly driven by the increase in operating loss. With that, I will turn the call back to Martijn.
Martijn Van den Bemd: Thank you so much, Amit. With that, we arrive at the Q&A portion of this call. We got a couple questions in. The first 1 I direct to you, Omri. it is about the gross margin expansion. The question is gross margin expanded nicely to 51% from 47% year over year. With gross profit growing almost twice as fast as revenue. Could you walk us through what is driving that mix shift and how much more room you see to keep expanding the margin.
Omri Brill: it is a good question. I would say, first of all, like, I would say it goes hand in hand. Right? If you see top line revenue growing, gross margin improving, so 1 can expect gross profit will follow. And, actually, it follow quite nicely, almost double the growth at the rates that we saw for top line revenue. So I think, like, the company like, we have different revenue stream streams, and we are focusing on the revenue streams that are more profitable for the company coming with better margins. And I think this type of strategy is proving itself. So you see, like, in my some would say improving the company gross margin. And we expect to see this trend carry on onward. I would say with some exception, obviously Q4 can have this lower gross margin traditionally because of flat spike in the cost of revenues that we are learning to holiday. Related spending. So I say but the trend as a trend, I would say, is definitely looking more positive, and we expect gross margin to remain solid.
Martijn Van den Bemd: Thank you, Omri. The following question is regarding North America. it is encouraging to see North America bounce back with 27% growth after a softer 2025. what is behind that turnaround? And do you feel good about that momentum carrying into the second half of this year?
Omri Brill: I think maybe Amit can shed a bit more light, but I think, like, most of the growth that we saw in North America is coming from actually existing client activity. In improving this activity, I would say. And that is something that is very encouraging for us. We are still to see, let's say, the momentum is shifting. And it is like in these clients are now growing again, growing the-- and basically, that is always a positive sign. So I think this is 1 thing. Also, bear in mind that moving towards and seeing, like, H2, still have compare, like, better numbers to present, you know, because the compare comparable should be working in our favor. Soft in 2020, 2025. So I think, like, yeah, we are more positive regarding North America, and we expected to see this type of behavior. We expect for to see it stabilize and then to see it going back into I would say, growing trends. I am happy that we have been able to achieve it in Q2. We are hoping to preserve this type of momentum carry into the second part of the year as well.
Martijn Van den Bemd: Great. Thank you, Omri. The next question is about our AI development and development in general. Committed to 3 autonomous agents by Q2 and you actually delivered 5. Which is a nice execution story. What kind of early customer feedback or usage signals are you seeing from proposed lease agents and also the creative agent on the AI Studio.
Omri Brill: So first of all, if we miss, we might as well miss, you know, like, over-deliver than under-deliver, I guess. And But I would say, if we are talking about Proposaly, obviously, we have 4 different agents now running live. Inbound agent, outreach agent, deal agent, and customer agent. And we see, like, a good, I would say, market fit, you know, from early beta clients. So they are excited about what this agent capabilities are, what type of issues they can solve for them for their organization. And I think, like, in general, we see okay, this is like-- it definitely a place for the solution like Adcore is building in the market. And actually, it is quite a unique solution in the market because maybe every party more or less can, I would say, build an AI agent nowadays. But let's say AI agents that is integrated to the different workspace and platform and document, and can generate revenue from A to Z just from a visitor. that is quite a unique sales story that only Adcore possesses, and I think this put us in a very different, I would say, position from other vendors in the market today. So AI, like, proposal, I am definitely happy with the early reactions that we are getting. And maybe Kobi can elaborate a bit about the reaction that you see from early user of AI studio with regards to the agent.
Kobi: Of course. As far as the AI platform in general, we have a lot we have already started to go to market. We have some few we actually have a few quite a few working partners already. The feedback, of course, it is about saving time, saving resources, And I just finished the call actually with 1 of our partners who are using the connector to Claude, actually, with our agent. And she's saying that it is never been easier for her to generate creative. She's not count she does not need to count on our age agency anymore send her deliverables. They do not need designers. They do not need to pay extra. And what they are actually paying is, like, less than a day work of a designer and they are getting a full stack of creative that can take a full month to work on. So obviously, no complaints. Only really just complements on how good the platform is right now.
Omri Brill: So that is the best type of stories. Right? The client Yeah. Success story that are happy with it using the agent. I see, like, like, that is exactly why we are working so hard on building this type of solution for the client to give us this type of feedback. So that is amazing.
Kobi: Thank you for sharing, Kobi. Thank you.
Martijn Van den Bemd: Amazing. Thank you, guys. The next question is probably more for Amit as it is a financial question. The question is you mentioned the cash flow working capital declines is seasonal and should reverse in H2. Could you please give us a bit more color on the expected timeline for that recovery?
Amit Konforty: Yeah. Definitely. So, basically, historically, Q4 is, like, the strongest quarter of the year for the company. So we do expect to see a recovery. And the decrease that we see now in H1 is partially payments for Q4 of last year. So it is something pretty usual in the company. In this 1.
Martijn Van den Bemd: Right. Thanks for elaborating on that. The next question either for Amit or Omri, it is about efficiency plan rollout. Omri mentioned there is plans for a 15% to 20% OpEx reduction plan. Question is, could you share more on the expected timeline if there is any 1-time implementation costs and which areas of spend will primarily be targeted.
Omri Brill: So I think, like, the biggest, I would say, line item of expense for the company is obviously in employee costs. Right? So this would be the first place that we need to tackle. I think, like, we saw, like, some headwind, you know, with regard and Amit mentioned it, the current exchange fluctuations and basically did not work in our favor during H1 2026, and that is something we need to take into like, we need to take actions. So I think, like, we are planning some employee, you know, cutoff for reduce the numbers of employees. You know, that is 1. Looking at other lines of expenses the company is having, you know, whether it is AI token and other things that basically consuming a consuming a large budget for the company is a spending right now. I think all in all, in terms of timelines, we do, we want to do the majority of, let's say, cut effort or saving effort during Q3 26. So, basically, we might have some carry ons, but the idea is to enter Q4 2020 as a far leaner and slimmer company, you know, with the I would say, ideally, G&A cost SG&A cost. Dropped by 15% to 20%. that is the goal for the company.
Martijn Van den Bemd: Great. Thank you, Omri. I think we have room for 1 or 2 more questions. The next question is about balancing growth and profitability. Omri, you mentioned to keep adjusted EBITDA positive while simultaneously investing in a fairly ambitious agent build out. How are you thinking about that balance between funding innovation and protecting profitability as you head into the second half of 26?
Omri Brill: that is actually a very good question because, obviously, there is, like, an arms race almost now between different AI companies. Right? Developing the AI agent, making sure that to grab as much land as you can. And I think that is not the time to slow down or to stop. that is definitely so I think, like, definitely, we need to move, and we are moving fast. We already proved it. Right? We thought we are gonna ship we then ship 3 agents by the end of Q2. We built and shipped 5 different agents, you know, and so we definitely prove already that we know how to execute and execute fast, which is great. I said, like, but this is 1 side of the story. The other side is that, like you said, we need to be, you know, like, monetize, you know, the company's financial position, making sure that we are not overspending. And basically, 1, keep another eye open on that front. So I think, like, there should be a balance between the 2. And the company already proved, you know, historically that we know how to do it, and we know how to do it quite well. So I think, like, I am pretty confident, I would say, that we will be able to continue to balance between these 2, I would say, conflicting sometimes efforts.
Martijn Van den Bemd: Great. Thank you, Omri. That brings us to the last question for today. Which is the first half revenue grew and the gross profit grew, and the gross profit grew 10%. first half overall. How much of that momentum do you expect to carry through the second half? Which you reflect as seasonally your strongest?
Omri Brill: So that is that is another good question. I would say, definitely very strong start for 2026. Right? Top line revenue, midline revenue, all of them are moving in the right direction. So we definitely see some tailwind. In that regard, as I mentioned before, we had some headwind regarding, you know, like, currency exchanges and which reflected an increase, of course. I would say, the plan is to go into Q4, which is the most important quarter for us. In a slimmer company, but maintain the same momentum. If we can balance the 2 and if we can achieve the 2, continue growing top line and mid line revenue, but reducing the SG&A cost. And I think that should be like a story to tell. Right? And then put the company in a better position moving forward.
Martijn Van den Bemd: Absolutely. Thanks so much, Omri. We covered a lot, both on the slides, the presentation by Kobi and also the Q&A session. Do you have any final closing remarks for the audience today, Omri?
Omri Brill: No. So I think, like, all in all, the company has been able to present a robust quarter, let's say, again, as robust almost as Q4 25, and that is telling you a lot. A lot of innovation going on. Also, level of maturity of both of the flagship app, which are Proposaly and AI Studio is far better. AI Studio is already generating real revenue and basically we have, like, a very strong and robust GTM regarding these apps. Proposaly has early beta users. But, reach a level of maturity which all the AI agents are active and ready to go to market. So I think, like, we are definitely entering H2 faster, stronger than we started H1, which is obviously a good a good place to be. Right?
Martijn Van den Bemd: Amazing. Thanks so much, Omri. Thanks, Amit. Thanks, Kobi, for your contributions today. And most of all, thanks for everyone joining this call. With that, we conclude the earnings call today. Looking forward to see you next time. Thanks so much, and have a great day.
Omri Brill: Thank you, everyone.
Amit Konforty: Thank you.
