Intouch Insight's Q2 2025 Performance: A Strategic Bet on CX Innovation Amid Revenue Volatility

In Q2 2025, Intouch Insight (TSXV: INX) delivered a mixed but telling performance, reflecting both the challenges of revenue volatility and the promise of strategic innovation. While total revenue declined 12% year-over-year to $6.5 million, driven by the absence of merchandising income from prior periods, the company's recurring services revenue grew 5% to $5.5 million. This resilience, coupled with a 25% increase in adjusted EBITDA to $370,812 and a gross margin expansion to 50.4%, underscores a business recalibrating for long-term growth. For investors, the question is whether these metrics signal a sustainable pivot or a temporary rebound.

Navigating Revenue Volatility: The Role of Acquisitions

Intouch's Q2 results were shaped by a deliberate shift in revenue streams. The absence of merchandising income—a legacy segment from previous years—created a headwind, but the company offset this by accelerating growth in recurring services. This pivot aligns with broader trends in the customer experience (CX) tech sector, where recurring revenue models are increasingly valued for their predictability.

The acquisition of ClearPoint Solutions US, LLC in July 2025 and the earlier integration of Alta360 Research, Inc. (closed in October 2023) are central to this strategy. ClearPoint, a merchandising firm with a skilled field execution team, provides a direct entry into in-store services, a segment poised to benefit from AI-driven retail analytics. Alta360, a customer experience measurement specialist, bolsters Intouch's data analytics capabilities, enabling deeper insights into customer behavior. Together, these acquisitions diversify Intouch's revenue base and position it to capitalize on the sector's shift toward agentic AI and digital twins.

Strategic Positioning in a Transformed CX Landscape

The CX tech sector in 2025 is defined by three megatrends: agentic AI, customer digital twins, and real-time personalization. Intouch's recent moves directly address these shifts.

1. Agentic AI and Automation: Unlike traditional AI, agentic AI operates autonomously, learning from interactions and adapting in real time. Intouch's investments in AI-driven customer segmentation and predictive analytics align with this trend. For example, Alta360's data collection tools can feed into agentic AI models, enabling hyper-personalized customer journeys. This capability is critical as competitors like Salesforce and HubSpot integrate AI agents into their platforms.

2. Customer Digital Twins: By leveraging Alta360's customer feedback data and ClearPoint's in-store execution, Intouch is building a foundation for digital twin applications. These virtual replicas of customers allow brands to simulate scenarios and optimize strategies before real-world implementation. In 2025, companies using digital twins are projected to outperform peers by 20% in customer retention, according to Gartner.

3. Merchandising as a Tech-Driven Service: ClearPoint's acquisition is not just a revenue play—it's a strategic entry into a sector where AI can optimize in-store experiences. For instance, agentic AI could automate inventory management or personalize in-store promotions, creating a bridge between digital and physical customer touchpoints.

Risk and Reward: A Balancing Act

Intouch's Q2 operating loss of $1.02 million, driven by a one-time churn adjustment, highlights the risks of its growth strategy. However, the 25% EBITDA increase suggests that the company is improving its cost structure and operational efficiency. The key for investors is whether these improvements can scale.

The CX sector's projected 18% CAGR through 2027 (per IDC) offers a tailwind, but competition is fierce. Salesforce and HubSpot dominate the enterprise market, while NICE leads in contact center solutions. Intouch's niche focus on customer intelligence and merchandising allows it to avoid direct competition while targeting underserved segments. Its ability to integrate AI into these verticals—such as using Alta360's data for predictive merchandising—could create a moat.

Investment Thesis: A High-Conviction Play

For investors seeking exposure to the CX sector's innovation wave, Intouch presents a compelling case. The company's 5% recurring revenue growth and 25% EBITDA increase demonstrate operational resilience, while its acquisitions provide a platform for AI-driven differentiation. The stock's recent volatility (down 15% year-to-date) may underprice its long-term potential, particularly as agentic AI adoption accelerates.

However, risks remain. The CX sector is capital-intensive, and Intouch's debt load (a $2 million loan at 9.9% interest) could constrain flexibility. Additionally, the success of its AI initiatives depends on execution—early-stage technologies often face scalability challenges.

Conclusion: Positioning for the Future

Intouch Insight's Q2 2025 results reflect a company in transition. By pivoting to recurring revenue, acquiring complementary assets, and aligning with AI-driven CX trends, it is positioning itself as a long-term player in a sector undergoing rapid transformation. While revenue volatility persists, the strategic moves made in 2025—particularly in agentic AI and digital twins—suggest that the company is not just surviving but innovating. For investors with a 3–5 year horizon, Intouch offers a high-conviction opportunity to participate in the next phase of CX evolution.

Investment Advice: Consider a cautious overweight position in Intouch Insight, contingent on its ability to maintain EBITDA growth and demonstrate clear AI integration in 2026. Monitor key metrics: recurring revenue trends, EBITDA margins, and the performance of its newly acquired assets.