Addnode Group (ANOD) Q2 2024 earnings summary

Executive summary

• Q2 2024 net sales rose 29% year-over-year to SEK 2,005 million, with 11–12% currency-adjusted organic growth and EBITA up 47% to SEK 162 million; EPS increased 64% to SEK 0.41.

• Recurring revenue accounted for 72% of net sales, reflecting a stable and predictable business model.

• Six strategic acquisitions completed in 2024, expanding capabilities in design, PLM, and process management, including Team D3, Prime Aerostructures, Addoceo, GPS Timber, Efficture, Jetas, and Optimec.

• Strong cash flow from operating activities, up to SEK 178 million from SEK 127 million in Q2 2023.

• The group operates through three divisions: Design Management, Product Lifecycle Management, and Process Management, each contributing to growth.

Financial highlights

• Q2 2024 gross profit was SEK 1,003 million, up 17% year-over-year, with a gross margin of 50.0%.

• EBITA margin improved to 8.1% from 7.1% in Q2 2023.

• Cash position at SEK 770 million as of June 30, 2024; net debt increased to SEK 825 million, up from SEK 488 million a year earlier.

• Equity/assets ratio declined to 27% from 32% year-over-year.

• Recurring revenue share increased to 72% (Q2 2023: 65%).

Outlook and guidance

• Demand in most markets remains stable despite economic uncertainties, with customers postponing major investments but upselling to existing clients continues to drive growth.

• Transition to a new transaction model in the U.S. and Europe will impact revenue recognition in Q3 and Q4, with full effect expected from 2025 and higher gross profit margins anticipated.

• No major cost reduction initiatives expected in PLM; margins have improved and are sustainable.

• Continued focus on organic and acquisition-led growth, supported by a diversified customer base and recurring revenue.