Gentrack Group (GTK) H2 2024 earnings summary

Executive summary

• Revenue increased 25.5% year-over-year to $213.2m, with strong growth in both Utilities and Veovo segments, and underlying growth of 50% excluding $27.6m in FY23 one-off revenues from insolvent customers.

• EBITDA was $23.6m, up 1.7% from FY23, with underlying EBITDA before LTI costs up 42% year-over-year, but reported EBITDA was impacted by a $7.1m payroll tax charge on LTI schemes due to share price growth.

• Statutory NPAT was $9.5m, including a $1.3m share of losses from the Amber investment, and no dividend was declared as capital is focused on growth.

• Cash increased by $17.5m to $66.7m after a $12.9m investment in Amber, reflecting robust cash generation.

• Four new utility customers were added, including entries into Saudi Arabia and the Philippines, and Veovo expanded with major contracts in the Middle East and UK.

Financial highlights

• Utilities revenue rose 23% to $181.3m, with underlying revenue up 51% excluding FY23 one-offs; Veovo revenue increased 45.5% to $31.9m (25% up excluding hardware sales).

• Non-recurring revenues more than doubled, up 104% to $60m; recurring revenues rose 33% to $121.3m.

• EBITDA margin before LTI costs was 19% in FY24, up from 17% in FY23.

• Operating cash flow was $34.4m, with closing cash at $66.7m.

• EPS as defined under the LTI scheme was $0.20, exceeding the $0.16 hurdle.

Outlook and guidance

• Midterm guidance reaffirmed: revenue growth of more than 15% CAGR and EBITDA margins of 15%-20% after expensing all development costs.

• FY25 expected to see continued revenue and EBITDA growth in both segments, with timing dependent on deal closures and business opportunities.

• LTI-related costs expected to decrease in FY25 and fall below 1% of revenue by FY26, supporting margin expansion.

• No formal FY25 revenue guidance issued, pending greater clarity on deal timing.

• No dividend planned as capital is prioritized for growth; capital allocation to be regularly reviewed.