CTOS Digital (CTOS) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly revenue of RM76.6m in 2Q 2024, up 23% YoY and 7% QoQ, with PATAMI rising to RM25.5m, up 21% YoY and 22% QoQ; 1H 2024 revenue totaled RM148.2m (+22% YoY), with PATAMI at RM46.3m (+23% YoY).

• Growth was broad-based across all business segments, with over 4 million registered users in the Direct-to-Consumer segment and strong international contributions.

• Regional expansion accelerated, with 100% telco coverage for alternative data in Indonesia and strong performance in the Philippines; international segment profit reached RM1.5m.

• ISO/IEC 27001:2022 certification achieved, aligning security practices with global standards.

• The group remains optimistic about medium- to long-term growth, supported by strategic investments, regional expansion, and increased adoption of digital solutions.

Financial highlights

• Revenue for 2Q 2024 reached RM76.6m (+23% YoY), with gross profit at RM56.2m (+18% YoY); 1H 2024 gross profit was RM108.7m (+14.4% YoY).

• PATAMI for 2Q 2024 was RM25.5m (+21% YoY, +22% QoQ); normalized PATAMI was RM25.9m; 1H 2024 PATAMI at RM46.3m (+23% YoY).

• Profit before tax for 1H 2024 increased 2.9% to RM49.4m; basic/diluted EPS was 2.0 sen.

• EBITDA margin improved QoQ in 2Q 2024 due to higher associate contributions.

• Cash and cash equivalents at period end stood at RM14.2m.

Outlook and guidance

• FY2024 internal targets: revenue RM340-360m, EBITDA RM130-140m, normalized PATAMI RM110-115m after investments.

• Second half outlook includes ramping up digital solutions, expanding recurring revenue, and international growth, with regional expansion in Indonesia and the Philippines.

• Upfront investments planned for sales team expansion, intensified marketing, and geographic growth in Indonesia, Philippines, and Singapore.

• The group remains vigilant of domestic and global uncertainties but maintains a positive outlook barring unforeseen disruptions.