CombinedX (CX) Q2 2024 earnings summary

Executive summary

• Revenue grew 30.6% year-over-year in Q2 2024 to 251.2 MSEK, with organic growth at 2.1%, but profitability fell short as adjusted EBIT margin dropped to 5.6% from 10.1% year-over-year.

• Lower profitability was driven by reduced utilization, especially in system development, margin-dilutive acquisitions, and integration costs.

• Growth was primarily acquisition-driven, with integration activities and a cyberattack recovery also impacting results.

• Cost-saving measures and new contracts are expected to improve performance in the coming quarters.

• Management maintains a long-term vision to reach 1 billion SEK in revenue by 2025 and become the leading Nordic group in digitalization.

Financial highlights

• Q2 net sales reached 251.2 MSEK, up 30.6% year-over-year, with organic growth at 2.1% (0.9% calendar-adjusted).

• Adjusted EBIT was 13.9 MSEK, with a margin of 5.6%; LTM adjusted EBIT margin at 8.8%.

• Intäkter per FTE increased by 3.2% LTM, but personnel costs rose faster.

• Cash position at quarter-end was 94 MSEK; net debt/EBITDA at 0.4x.

• Cash flow was impacted by working capital changes, investments, and acquisition-related outflows.

Outlook and guidance

• Management expects profitability to recover as cost-saving measures and integration synergies take effect later in 2024.

• Signs of improving demand in the customer journey segment and market, but too early to confirm a sustained upturn.

• No formal forecasts provided, but future prospects are considered good.