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Softchoice (SFTC) investor relations material

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, led by Software & Cloud and Services, with gross profit up 8.9% year-over-year and strong U.S. and SMB performance.

  • Investments in digital offerings, salesforce, and technical experts, including AI, supported growth and strategic expansion.

  • Customer base expanded over 4% year-over-year, with revenue retention rate at 105% and average customer tenure around 10 years.

  • Launched SAM Plus Hub, a proprietary software management tool with over 1,000 customers, enhancing retention and cross-sell opportunities.

  • Recognized for workplace excellence, ESG leadership, and named Microsoft Scale Partner and Cisco Commercial Impact Partner of the Year.

Financial highlights

  • Q3 2024 gross profit: $85.2M (+8.9% YoY); adjusted EBITDA: $23.2M (+2.2% YoY); net income: $9.0M (+8% YoY); adjusted EPS: $0.18 (down from $0.27 in Q3 2023).

  • Gross sales increased 20.3% to $628.6M; net sales up 3.9% to $189.2M year-over-year.

  • Operating cash flow remained stable year-over-year at $98M, with free cash flow down to $33M due to higher taxes and expenses.

  • Net leverage increased to 2.2x from 1.1x year-over-year, reflecting debt for a special dividend.

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

Outlook and guidance

  • Confident in achieving 2024 objectives of market share gains and returning top-line growth to historical averages, with margin expansion expected as growth investments normalize.

  • Q4 expected to be seasonally lower, around 26% of full-year gross profit, due to timing of incentives and large Q3 hardware order.

  • Ongoing investments in salesforce, technical experts, and AI to drive future growth and customer acquisition.

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

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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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