Baylin Technologies Q2 Earnings Call Highlights

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Mon, August 10, 2026 at 12:03 AM GMT+3 6 min read

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Record backlog: Baylin Technologies' backlog reached CAD 61 million in Q2 2026, up from CAD 20.4 million at year-end 2025, driven by the Kaelus acquisition and new Satcom orders.
Kaelus expands growth opportunities: The CAD 42 million acquisition added RF infrastructure, defense communications and anti-jamming products, generated CAD 12.6 million in first-month orders and is expected to outperform its second-half budget.
Profitability remains mixed: Revenue declined slightly to CAD 22 million and adjusted EBITDA fell to CAD 3 million, while the company posted a CAD 3.2 million net loss due largely to acquisition costs and foreign-exchange losses. Baylin's focus is now on converting backlog into revenue, integrating Kaelus and improving margins.

Baylin Technologies (TSE:BYL) reported a record backlog of CAD 61 million for the second quarter of 2026 as the company completed its acquisition of Sweden-based RF technology provider Kaelus, restructured its debt and converted certain securities into common shares.

The backlog, the highest in Baylin's more than 40-year history, rose from CAD 20.4 million at the end of 2025. Chief Executive Officer Leighton Carroll said the increase reflects contributions from Kaelus as well as new orders in the company's Satcom division.

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Second-quarter revenue was CAD 22 million, down 1.9% from CAD 22.5 million a year earlier. Gross margin improved to 47.1% from 46.3%, while adjusted EBITDA was CAD 3 million, compared with CAD 3.4 million in the prior-year period. Baylin recorded its 10th consecutive quarter of positive adjusted EBITDA.

The company reported a net loss of CAD 3.2 million, compared with net income of CAD 1.1 million in the second quarter of 2025. Chief Financial Officer Cliff Gary said the loss was primarily attributable to CAD 2.1 million in acquisition-related expenses and higher foreign-exchange losses included in finance expense.

Kaelus acquisition expands RF portfolio

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Baylin completed its acquisition of Kaelus on May 29 for a net purchase price of CAD 42 million. The acquired business is headquartered in Sweden and will operate as Kaelus, a Galtronics company. Galtronics is one of Baylin's operating brands.

Carroll said Kaelus adds products that do not overlap with Baylin's existing Galtronics offering, including advanced antenna systems, RF conditioning products, GNSS synchronization solutions, anti-jamming capabilities and test-and-measurement tools. He said the transaction approximately doubled the number of products Baylin can offer customers while adding engineering talent and geographic reach.

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Kaelus booked CAD 12.6 million in new purchase orders during its first month under Baylin ownership and contributed revenue in June. Carroll said order intake remained solid in July and that the company expects Kaelus to outperform its internal second-half budget based on current orders and margins.

Baylin is focused on integrating Kaelus, cross-selling products to combined customers, unifying sales channels and identifying supply-chain efficiencies. Carroll said the acquisition also gives Baylin exposure to European RF infrastructure deployment and defense communications markets.

Debt restructuring and capital changes

During the quarter, Baylin entered a new term credit facility with the SAF Group and retired its revolving credit facility with Royal Bank of Canada. The first advance under the new facility was used to repay the RBC facility, fund part of the Kaelus acquisition and support general corporate purposes.

Net debt stood at CAD 11.1 million as of June 30, down CAD 1.3 million from Dec. 31, 2025.

The CAD 47.4 million Kaelus purchase price consisted of CAD 10.6 million in cash, CAD 21.6 million of deferred cash compensation and CAD 15.2 million in issued share capital, according to Gary. The deferred cash compensation is recorded as a short-term liability.

The company also converted CAD 5.1 million in debentures into common shares and exchanged CAD 4 million of Series A and Series B preferred shares for common shares during the quarter.

Business-line trends

For the first six months of 2026, Baylin's revenue was CAD 38.1 million, down 7.8% from CAD 41.3 million in the first half of 2025. The decrease was largely driven by lower Satcom sales volume, while Kaelus began contributing only late in the second quarter. First-half adjusted EBITDA was CAD 3.1 million, down from CAD 4.1 million a year earlier, and the net loss widened to CAD 5.5 million from CAD 1 million.

Wireless Infrastructure: Revenue was steady from the first quarter but slightly below a strong year-ago period. Carroll said North American carriers have pushed out some capital spending, resulting in slower order intake entering the third quarter. Baylin is commercializing new derivatives of its multibeam technology and has received carrier interest in trials.
Custom Antenna Solutions: The business improved margins and adjusted EBITDA from a year earlier, though some customers are delaying orders because of macroeconomic uncertainty and chipset availability. Baylin expects the second half to be somewhat softer than the first, with full-year performance comparable with 2025.
Satcom: Reduced demand for specialized custom products pressured second-quarter results, but backlog more than doubled as new orders arrived, including multimillion-dollar Genesis amplifier orders. Carroll said the second half should improve from the first half, though full-year Satcom results are expected to remain below 2025 levels.

Gross margin benefited from CAD 1.3 million in tariff refunds recognized as a reduction in cost of goods sold. Carroll said Baylin has mitigated tariff impacts and expects Kaelus could receive similar IEEPA-related refunds in the future.

Outlook centers on backlog conversion and 2027 opportunity

Carroll said a substantial portion of the backlog is expected to convert to revenue during 2026. He said much of the Kaelus backlog should be produced this year, while approximately half of the recent Satcom backlog increase is expected to convert this year and the remainder could extend into late first quarter or the second quarter of 2027.

Looking toward 2027, Carroll said Baylin sees potential for cross-selling between its wireless infrastructure products and Kaelus' RF portfolio. He also expects Satcom profitability to improve as defense-related demand and orders for its newer Genesis product line develop.

The CEO said defense has become a larger source of opportunity for Satcom, while aviation and maritime markets have largely receded. In telecommunications, he said North American carriers have directed investment toward fiber assets supporting data centers and hyperscalers, while parts of Europe and Oceania remain earlier in their 5G infrastructure buildout cycles.

"Our job is now simple to say and hard to do well," Carroll said. "We have to convert the backlog to revenue and earnings, integrate Kaelus the right way, focus on our customers, and drive our margins."

About Baylin Technologies (TSE:BYL)

Baylin Technologies Inc is a diversified wireless technology management company. It focuses on the research, design, development, manufacturing, and sales of passive and active radio frequency and terrestrial microwave products and services.

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