EKINOPS (EKI) H1 2024 earnings summary

Executive summary

• H1 2024 revenue was €57.5m, down 19% year-over-year, with Access solutions up 1% (driven by a 16% rebound in France) and Optical Transport down 41% after a record 2023.

• Software & Services accounted for 17% of revenue, up from 14% in H1 2023, with recurring SD-WAN revenue increasing.

• Gross margin reached a record 56.1%, up from 53.1% in H1 2023, due to favorable business mix and higher software share.

• International revenue declined 31% and represented 56% of total revenue, down from 68% in 2023.

Financial highlights

• EBITDA was €8.2m (14.3% margin), down from €14.3m (20.2%) in H1 2023, with operating expenses reduced by 6%.

• Net income was €1.5m, compared to €6.0m a year earlier.

• Operating cash flow improved to €5.3m from €0.9m in H1 2023.

• Net cash position at June 30, 2024 was €22.3m, up from €20.3m a year earlier.

• Cash and cash equivalents stood at €41.8m at June 30, 2024, down from €47.2m at year-end 2023.

Outlook and guidance

• Q3 2024 revenue expected to follow current trends, with improvement targeted for Q4 2024.

• Acceleration in Access segment growth anticipated in H2 2024, especially in France and EMEA, if economic conditions improve.

• New 800G and cost-effective 100G Optical Transport solutions expected to boost future performance.

• External growth strategy focused on non-dilutive financing and a €100m financing line for acquisitions.