Serial Acquirers Market Update: Google to Acquire Canadian Eye-tracking Startup, and Enghouse Systems Continues to Underperform
Google to Acquire AdHawk Microsystems and Enghouse Systems Reports Q1 2025 Earnings
Google to Acquire AdHawk Microsystems in a Renewed Push to Dominate the Eye-Tracking Technology Market
Exciting news in the eye-tracking technology space this week: Google is in "final talks" regarding its acquisition of AdHawk Microsystems, a startup based in Waterloo, Ontario. Valued at $115 million–with $15 million contingent on AdHawk meeting performance goals–this acquisition is a significant move in Google's strategic efforts to strengthen its position in the eye-tracking market. As part of the acquisition, AdHawk staff will join the team that is currently developing Android XR, Google’s recently unveiled platform for mixed-reality headsets and smart glasses.
AdHawk is known for its advanced chips, hardware, and software for eye tracking—with its key selling point being low-power components that can analyze a user’s corneas and pupils faster than rival sensors. This success builds on investments from major players in the wearable technology space, including Samsung, Intel, HP, Sony Group, and EssilorLuxottica, Meta's partner in smart glasses.
AdHawk’s micro-electromechanical eye tracker and chip combination offers distinct advantages over conventional camera-based systems, reportedly requiring 1,000 times less data while generating sampling rates 10 times higher than alternatives.
This acquisition isn’t the first Kitchener-Waterloo-based smart glasses company Google has acquired either. In 2020, Google’s parent company, Alphabet, acquired Kitchener-based smart glasses maker, North, following its unsuccessful rebrand and launch of the Focals 1.0 glasses.
Enghouse Systems Continues to Underperform
Enghouse Systems, a vertical SaaS Canadian serial acquirer, reported its Q1 2025 earnings results in early March. The announcement led to a volatile trading day, with the share price initially dropping by 3.7% at the open, then retracing the entire move during early trading before declining again by 3% throughout the day.
Enghouse employs a buy-and-hold approach, focusing on acquiring companies with strong recurring revenues in specific SaaS verticals such as customer experience, transportation, and public safety.
From 2012 until 2020, the company’s share price performed exceptionally well, increasing more than tenfold. This growth was backed by its strong financial performance which saw revenue and net income rising by 176% and 252%, respectively.
However, since reaching an all-time high of $80 in August 2020, the share price had declined to $27 by the end of March 2025. Part of the reason for the languishing stock price is its recent financial performance. In the first quarter of 2025, its quarterly revenue and net income fell by 5.7% and 3.9%, respectively compared to the first quarter of 2021.
This goes to show how difficult it is to replicate Constellation Software’s business model and sustain long-term growth across different market cycles.
While it’s hard to say whether Enghouse will ever return to its previous levels of growth, it currently trades at a modest price-to-earnings ratio of 18 and offers a dividend yield of 4.4%. At an attractive entry point, it could present an appealing opportunity for investors seeking income.
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