Softchoice
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Softchoice (SFTC) investor relations material

Softchoice has been acquired

Softchoice Q3 2024 earnings summary

Complete event summary combining all related documents: earnings call transcript, report, and slide presentation.
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Q3 2024 earnings summary8 Nov, 2024

Executive summary

  • Achieved double-digit organic growth in Q3 2024, with gross profit up 8.9%–10% year-over-year, driven by strong Software & Cloud and Services performance, recurring SaaS/cloud gross profit, and market share gains.

  • Customer base expanded over 4% in Q3 and 5% over the last 12 months, with a 105% revenue retention rate and increased salesforce investment.

  • Launched the SAM+ Hub, a proprietary software asset management tool, with over 1,000 customers using it since September, driving customer engagement and acquisition.

  • Recognized for workplace excellence, ESG leadership, and as Cisco Canada's Commercial Impact Partner of the Year.

  • Strong Microsoft partnership, with CSP revenue up over 50% in 2023 and expected to rise 25% in 2024.

Financial highlights

  • Q3 2024 gross profit: $85.2M, up 8.9% year-over-year; gross profit margin was 13.6% of gross sales.

  • Adjusted EBITDA grew 2%–2.2% in Q3, with margin stable at 27.3% of gross profit.

  • Adjusted EPS (diluted) was $0.18, down from $0.27 or $0.23 in Q3 2023, due to higher taxes and financial expenses.

  • Net income per share (diluted) was $0.15, up from $0.14 in Q3 2023.

  • Free cash flow for the trailing twelve months declined to $33M from $62M, mainly due to higher taxes and expenses.

Outlook and guidance

  • Confident in achieving 2024 objectives for market share and returning to historical top-line growth rates, with continued organic growth and margin expansion targeted.

  • Q4 expected to be seasonally lower, around 26% of full-year gross profits, due to timing of incentives and hardware orders.

  • Dividend per share increased by 18% over Q4 2023, reflecting confidence in future cash flows.

SAM+ Hub: What's the monetization path?
CSP transition: How does it impact revenue model?
Sales force productivity: What are the nuances?
Explain drivers behind TTM gross profit per customer growth.
How does SAM+ Hub differentiate Softchoice?
Assess impact of industry weakness on hardware sales.
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Frequently asked questions

Softchoice Corporation is a technology solutions provider that helps organizations across various industries manage and optimize their IT infrastructure. The company offers a range of services, including cloud migration, software licensing, managed services, and IT asset management. Softchoice partners with leading technology vendors to deliver solutions that support digital transformation, enhance operational efficiency, and improve overall IT performance for its clients. Its offerings cater to businesses of all sizes, from small enterprises to large corporations. The company is headquartered in Toronto, Canada, and its shares are listed on the TSX.

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