EMRO (058970) Q2 2024 earnings summary

Executive summary

• Achieved Q2 2024 revenue of ₩19.2 billion, up 31.3% sequentially and 27.8% year-over-year, driven by demand for AI and cloud-based procurement systems and large-scale project wins.

• First-half 2024 revenue reached ₩33.8 billion, marking a record high for six consecutive years.

• Specializes in AI-based supply chain management software, serving over 550 clients and 1,600 projects, with a strong domestic presence and expanding internationally, especially in North America.

• Strategic focus on global expansion, AI integration, and SaaS platform development, with visible results expected in H2 2024 and full-scale overseas business in 2025.

• Samsung SDS became the largest shareholder, increasing its stake from 33.39% to 37.0% via early exercise of convertible bonds and warrants.

Financial highlights

• Q2 2024 operating income reached ₩1.75 billion, up 5,548% year-over-year; net income was ₩8.7 billion, up 1,308% year-over-year, mainly due to reduced derivative losses.

• H1 2024 consolidated revenue was ₩33.8 billion, operating income ₩1.78 billion, and net income ₩9.34 billion, a significant turnaround from a net loss in FY2023.

• Q2 EBITDA was ₩2.46 billion, up 207.9% sequentially; adjusted EBITDA was ₩3.2 billion, up 150.8% sequentially.

• Technology-based revenue in Q2 was ₩6.38 billion, accounting for 33.2% of total revenue.

• Cash and cash equivalents at June 2024: ₩21.76 billion, up from ₩11.11 billion at December 2023.

Outlook and guidance

• Plans to accelerate global SaaS platform rollout, expand AI business, and increase AI revenue share to over 20% within three years.

• Continues to invest in R&D, focusing on AI and cloud-based solutions to drive future growth.

• Expanding SaaS offerings and targeting overseas markets, particularly North America, in partnership with Samsung SDS.

• Anticipates continued growth from digital transformation in procurement and expansion into overseas markets.

• Market demand for AI and cloud-based supply chain solutions expected to remain strong due to ongoing digital transformation and supply chain risk management needs.