Carasent (CARA) Q2 2024 earnings summary

Executive summary

• Achieved 15% organic recurring revenue growth in Q2 2024, with signed but not implemented ARR rising to NOK 17.17 million from NOK 2 million a year ago, and a net retention rate of 111%.

• Positive cash flow in both Q2 and H1, with significant year-over-year improvements in profitability and cost efficiency.

• Major one-time costs incurred due to takeover interest, relisting, and German acquisition activities.

• Divestment of Confrere to streamline operations and focus on core business, reducing revenues but improving profit margin.

• Signed major new contracts, including with The Art of FUE, Acuitis, Frelsesarmeen for Ad Curis, and Medrave, boosting ARR backlog.

Financial highlights

• Q2 2024 revenue reached NOK 66.3 million, up 5% year-over-year; recurring revenue reached NOK 61 million, up from NOK 54 million year-over-year.

• Adjusted EBITDA margin improved to 16% from 8-9% year-over-year; adjusted EBITDA NOK 10.4 million, up 84%.

• Gross profit margin increased to 85% from 82% due to divestment and renegotiated hosting costs.

• Consulting revenue declined 29% as focus shifted to recurring revenue.

• Cash flow from operations in Q2: NOK 13.7 million; cash balance at quarter-end: NOK 376 million.

Outlook and guidance

• Confident in achieving 15% organic growth and breaking even on EBITDA for the full year.

• Strong ARR backlog and new contracts provide a solid foundation for growth and profitability in the coming quarters.

• Focus remains on cost control and margin expansion, with expectations for further margin improvement.

• Webdoc X certification in Germany anticipated in Q1 next year, with rollout to first customers soon after.

• Ongoing relisting process targeting Nasdaq Stockholm in Q4.