Exsitec (EXS) Q2 2024 earnings summary

Executive summary

• Achieved 13% year-over-year net sales growth in Q2 2024, with organic growth just over 5% and strong margin expansion despite a passive market and longer sales cycles.

• Recurring software revenue showed robust growth, driven by both organic expansion and acquisitions, with LTM growth at 29% and Q2 growth nearly 40%.

• Focus remains on long-term profitable growth, with renewed emphasis on M&A activities and continued investment in talent through a large trainee program.

• New initiatives and acquisitions, including entry into Finland and CRM investment in Sweden, support future growth.

• Market sentiment is improving, but sales cycles remain extended and close rates have decreased.

Financial highlights

• Q2 2024 net sales reached SEK 211 million, up 13% year-over-year, with organic growth just over 5%.

• Adjusted EBITA for Q2 was SEK 44 million, up 30%, with margin improving to 21% for the quarter and 20% year-to-date.

• Q2 profit for the period was SEK 26 million, up 51% year-over-year; basic EPS up 45%.

• Operating cash flow rose by more than 40% compared to the same quarter last year.

• Recurring software revenue LTM reached SEK 162 million, up 29% year-over-year.

Outlook and guidance

• Market remains passive with extended sales cycles, but order intake in Q2 was 7% higher than last year and optimism is rising among customers and management.

• Q3 expected to be financially challenging due to holidays and trainee program investments, but these are seen as drivers for future growth.

• New financial targets: at least 15% annual net sales growth and adjusted EBITA per share growth over time.

• Dividend policy: 20–40% of profit after tax, considering financial position and growth prospects.

• Focus on deal qualification, operational excellence, and continued investment in talent and M&A.