FINEOS (FCL) H1 2024 earnings summary

Executive summary

• Subscription revenue reached €34.5 million for 1H 2024, up 6.1% year-over-year, now 53.5% of total revenue.

• Total revenue was €64.4 million, up 1.5% year-over-year, driven by North America.

• Gross profit rose 6.5% to €47.4 million, with margin improving to 73.6%.

• EBITDA increased to €7.3 million (margin 11.3%), up from €4.5 million (margin 7.2%) year-over-year.

• Loss after tax narrowed to €5.3 million from €6.8 million year-over-year.

Financial highlights

• ARR reached €68.7 million at June 30, 2024, up 5.2% from December 2023.

• Free cash flow improved to €5.1 million from €1.9 million year-over-year.

• Cash at bank increased 21.5% to €34.2 million.

• Cost of sales fell 10.3% due to lower contractor and employee costs.

• Operating expenses remained stable at €40.1 million, with R&D costs down 7.6%.

Outlook and guidance

• FY 2024 revenue guidance reaffirmed at €130–135 million, tracking toward the lower end due to slower new deal flow and churn.

• Subscription revenue growth forecast revised to high single digits; services revenue to grow low single digits.

• Positive free cash flow expected for FY 2025; self-funding targeted thereafter.

• Operating expenses for the full year expected to be down year-over-year, with further cost reductions planned.

• Pipeline remains strong despite challenging conversion pace.