Hightech Payment Systems (HPS) H1 2024 earnings summary

Executive summary

• Accelerating SaaS transformation, global expansion, and CR2 acquisition are enhancing digital banking and cross-selling opportunities, with PowerCARD V4 driving record new orders, especially from Tier 1 banks, and significant revenue and margin impact expected from 2025 onward.

• Four of the world's top 100 banks selected the company in 2024, with contracts expected to be signed in H2-2024, boosting future backlog and recurring revenue.

• Record order intake up 48.8% year-over-year, with 83.7% of backlog now recurring and regular revenue.

• Expansion into North America, Asia, and Australia, with new offices and investments to support Tier 1 clients.

Financial highlights

• H1 2024 revenue grew 2.5% year-over-year to approximately MAD 580 million, with payment activity revenue up 1.3% to MAD 462 million.

• EBITDA margin declined by 5.6% to MAD 108 million, with an EBITDA margin of 18.6%; adjusted for SaaS impact, EBITDA would have grown 25.4% to MAD 143 million and margin to 23.3%.

• Backlog stable at MAD 810 million, with 68–83.7% recurring revenue.

• Recurring and regular revenues grew 12.6% to MAD 415.6 million, now 76% of total revenue.

• Cash position at end-June 2024: MAD 214 million, with positive operational cash flow.

Outlook and guidance

• Revenue growth in 2024 is expected to remain weak due to timing of large contract signings, but a strong rebound is anticipated in 2025 and 2026 as SaaS contracts ramp up.

• EBITDA margin is projected to recover and expand to 25–30% by 2027 as SaaS and cost mutualization take effect.

• Recurring revenue contribution is targeted to reach 60% by 2027, up from 48% in 2022.

• Americas and Asia are expected to represent 30% of revenue by 2027, up from 15% in 2022.

• No new acquisitions planned for 2024; focus on integrating CR2, with further M&A targeted for 2025.