Arribatec Group (ARR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached NOK 150.1 million, up 1% year-over-year, with all business areas posting positive EBITDA.

• Adjusted EBITDA was NOK 3.4 million, impacted by NOK 3 million in one-offs, resulting in a clean EBITDA just above break-even.

• Recurring revenue grew 19% year-over-year to NOK 64 million in Q2 and NOK 124 million for H1, now representing 43% of total revenue.

• Order intake in Q2 surged 60% year-over-year to NOK 194 million, with 441 new contracts and scope extensions signed.

• Major contracts included a NOK 73 million EU agency agreement and a global partnership with Orbus Software.

Financial highlights

• Q2 revenue: NOK 150.1 million (up 1% YoY); recurring revenue: NOK 64 million (up 19% YoY); H1 2024 revenue: NOK 294.7 million (-1% YoY).

• Adjusted EBITDA: NOK 3.4 million (down from NOK 8.4 million YoY); clean EBITDA: NOK 0.4 million.

• Net loss after tax for Q2: NOK -10.6 million; H1 net loss: NOK -20.0 million; EPS: NOK -0.15 for Q2, NOK -0.29 for H1.

• Cash at quarter end: NOK 30 million, down from NOK 39 million YoY; equity: NOK 246 million; equity ratio: 48%.

• Order intake: NOK 194 million in Q2, up from NOK 121 million YoY.

Outlook and guidance

• Strong demand for cloud and managed IT services, with growth in cloud migration and transformation projects expected.

• Hospitality and Marine segments forecasted to grow, supported by SaaS and project pipeline.

• Business Services expects Unit4 Cloud migration projects to start in Q4 2024; EU project activity to increase from August.

• EA & BPM expects activity to pick up in Q3, focusing on expansion outside Norway.

• Initiatives underway to improve EBITDA margins and implement cost controls.