Heeros (HEEROS) Q3 2024 earnings summary

Executive summary

• Q3 results were solid and aligned with expectations, with systematic work over the past 18 months driving improved profitability and operational efficiency.

• Achieved strong profitability and new sales growth, with contract revenue up 4% year-over-year for the nine-month period ending September 2024.

• EBITDA margin improved significantly, supported by a one-time loan forgiveness, resulting in a net debt-free position.

• New customer acquisition showed positive momentum, with ARR from new contracts up 16% year-over-year.

Financial highlights

• Q3 2024 revenue was €2.8 million, flat year-over-year; nine-month revenue was €8.5 million, also flat.

• Contract revenue grew 3% in Q3 and 4% for the nine months, while transaction revenue declined 16% in both periods.

• Q3 EBITDA was €1.2 million, including non-recurring income from loan forgiveness; adjusted EBITDA declined 10% year-over-year due to higher bonus and holiday salary provisions.

• Nine-month EBITDA increased 52% to €2.6 million (31% margin); adjusted EBITDA up 26% to €2.3 million (28% margin).

• Operating cash flow for the nine months more than doubled to €2.5 million.

Outlook and guidance

• Revenue and EBITDA for 2024 are expected to improve compared to 2023.

• Strong sales momentum and a substantial contracted revenue backlog will drive growth, with most new revenue recognized in Q4 2024 and Q1 2025.

• Sales cycle for larger deals typically takes 4–6 months, with revenue impact lagging behind sales activity.