Quarterhill Shifts to Growth, Armed with AI and $100M M&A War Chest

TORONTO, ON – May 14, 2026 – By Sharon Kelly

Intelligent transportation technology firm Quarterhill Inc. signaled a definitive shift from restructuring to aggressive expansion today, reporting strong first-quarter 2026 financial results that underscore a successful operational turnaround. The company posted 14% year-over-year revenue growth and its third consecutive quarter of positive adjusted EBITDA, bolstered by a series of major contract wins for its AI-driven traffic solutions and a newly secured credit facility with a $100 million component earmarked for acquisitions.

For a company that has spent the last few years undergoing a significant strategic pivot, the results mark a critical inflection point. With a strengthened balance sheet and a clear focus on growth, Quarterhill is positioning itself to consolidate its role in the rapidly expanding market for smart-road infrastructure.

A Turnaround Solidified by a Disciplined Strategy

Quarterhill's first-quarter performance paints a starkly different picture from one year ago. The company reported revenue of $38.6 million, up from $33.9 million in Q1 2025. More impressively, gross margin skyrocketed to 28%, a 1,600 basis point improvement from just 12% in the prior-year period. This drove adjusted EBITDA to a positive $2.0 million, a $5.5 million year-over-year improvement from a loss of $3.4 million in Q1 2025.

This quarter's results confirm a positive trend, marking the third straight quarter of positive adjusted EBITDA, following positive showings of $1.4 million and $4.4 million in Q3 and Q4 of 2025, respectively. The consistent profitability validates the operational overhaul undertaken by the management team.

"This quarter, we delivered strong operational performance and made significant strides on our capital structure," said Chuck Myers, Quarterhill's Chief Executive Officer, in a statement. "Delivering 28% gross margins in Q1 is a clear proof point of the operational rigor this management team has implemented, and it sets the stage for continued expansion on margins as we scale."

Myers noted the company's three-part plan: first, to properly structure the organization; second, to clean up the balance sheet; and third, to focus on growth. "With the first two legs now steadily behind us, 2026 is all about driving growth, both organically and through accretive M&A," he stated.

While revenue and profitability climbed, the company reported a net loss of $5.2 million, though this was a significant improvement from the $8.4 million net loss in the same period last year. The loss was influenced by non-cash items such as amortization and stock-based compensation, while the positive adjusted EBITDA figure highlights the underlying strength of the core business operations.

AI Paving the Future of American Roadways

Fueling Quarterhill's financial momentum is the growing adoption of its AI-first Intelligent Transportation System (ITS) platform by government agencies across the United States. The company announced a string of high-value contracts that demonstrate the real-world application of its technology in modernizing the nation's roadways.

Among the most significant is a $13 million, four-year agreement with the Indiana Department of Transportation (INDOT). Quarterhill will deploy and maintain Weigh-in-Motion (WIM) systems, which are critical for freight analysis and infrastructure planning. Crucially, the deal gives INDOT access to Quarterhill's ITHEIA™ AI-powered platform, which uses advanced computer vision and machine learning to classify vehicles without requiring traditional in-road sensors. This technology offers greater flexibility and is a key differentiator in the market.

Further west, Quarterhill secured $2.4 million in new projects with the California Department of Transportation (Caltrans) to enhance commercial vehicle screening and data collection on vital freight corridors like Interstate 10. In Illinois, the company locked in a $10.7 million, three-year extension with the Illinois Tollway, one of the largest toll networks in the country, reinforcing its role as a long-term technology partner supporting mission-critical back-office systems.

These deals are complemented by a $6.4 million contract in Massachusetts, a new partnership with the New Jersey DOT to modernize traffic monitoring stations, and a $6.3 million contract with an unnamed new state tolling agency. Together, these wins contribute to a formidable revenue backlog of $428.8 million, providing strong visibility for future revenue.

Quarterhill's success comes as the global AI in Transportation market is projected to surge. Market analyses forecast the sector to grow at a compound annual growth rate of over 19%, potentially reaching more than $22 billion by the early 2030s. This growth is driven by government investment in smart city initiatives and the urgent need for safer, more efficient, and sustainable transportation networks.

Primed for Aggressive Growth and Acquisitions

With its operational house in order and organic growth accelerating, Quarterhill is now openly preparing for an aggressive inorganic growth strategy. The company recently secured a new $60 million senior secured credit facility with a six-year term, providing substantial financial flexibility. More telling, however, is the inclusion of a $100 million uncommitted incremental "accordion" facility.

CEO Chuck Myers was direct about its purpose: "The refinancing of our debt strengthens our financial foundation, allowing us to be aggressive and providing the capital to be opportunistic on the M&A front as we look to grow the business."

This strategy is the next logical step in Quarterhill's evolution. The company, which began as patent-licensing firm Wi-LAN, pivoted in 2017 to acquire and build operating companies in the ITS sector. Key acquisitions like International Road Dynamics, Electronic Transaction Consultants (ETC), and, more recently, RedfoxID have been instrumental in building its current platform. The new M&A facility provides the war chest to accelerate this consolidation, allowing Quarterhill to acquire complementary technologies or scale its presence in new geographic markets.

The combination of a stable financial base, a robust and growing backlog of government contracts, and a dedicated capital pool for acquisitions creates a powerful engine for expansion. As transportation agencies continue to invest heavily in modernizing their aging infrastructure with AI-powered solutions, Quarterhill appears well-positioned to not only compete but to lead the transformation of the industry.