GFT Technologies (GFT) Q3 2024 earnings summary

Executive summary

• Revenue grew 10% year-over-year to EUR 646 million for the first nine months of 2024, with adjusted EBIT up 10% to EUR 57 million and margin stable at 8.8%.

• Major acquisition of Sophos Solutions expanded presence in Colombia and Latin America, enhancing core banking and AI capabilities, and contributed significantly to growth.

• GFT AI Impact, a proprietary generative AI product, gained strong market traction, with 10 new clients, over 170 licenses sold, and more than 3,000 engineers trained.

• Smooth CEO transition completed, with Marco Santos taking over leadership.

• GFT recognized as a global leader in digital banking services in the SPARK Matrix report.

Financial highlights

• Order backlog increased 26% year-over-year to EUR 327 million, including EUR 50 million from Sophos.

• EBITDA up 6% year-over-year to EUR 69.6 million; adjusted EBIT at EUR 57 million; EBT decreased 3% to EUR 48.1 million due to M&A and interest expenses.

• Operating income includes a one-time EUR 10.8 million gain from a fiscal proceeding in Brazil.

• Workforce grew 24% to 11,304 FTEs, mainly from M&A.

• Cash flow from operating activities improved to EUR 22.4 million; free cash flow adjusted at EUR 19.5 million.

Outlook and guidance

• Updated full-year 2024 guidance: revenue of EUR 865 million and adjusted EBIT of EUR 77 million, reflecting a 10% revenue growth.

• Adjusted EBIT growth of 5% is slower than revenue growth due to margin pressures and M&A/interest effects.

• Q4 expected to show business improvement over Q3, but weaker demand and FX headwinds in Latin America have reduced revenue expectations.