Kalray (ALKAL) H1 2024 earnings summary

Executive summary

• H1 2024 revenue reached €10.9M, nearly matching H2 2023, despite longer sales cycles and supply chain delays, with a strong commercial pipeline and new contracts signed.

• Strategic pivot underway to a more service-oriented, collaborative model, including the launch of a new subsidiary for DPU design services.

• Immediate cost reduction plan targets a 20% cut in operating expenses by end-2024, aiming for free cash flow break-even by end-2025.

• End of exclusive merger negotiations with Pliops disrupted H1 2024 operations.

Financial highlights

• H1 2024 consolidated revenue: €10.9M, down from €15.3M in H1 2023, but stable versus H2 2023.

• Gross margin on net sales at 55% (vs 62% in H1 2023), impacted by component price increases.

• Net result improved to -€3.0M (vs -€11.1M in H1 2023); EBITDA at -€34K (vs -€5.3M in H1 2023).

• Cash position at €2.35M as of June 30, 2024, reinforced by a €6M bond issuance in July.

• Operating expenses up 29% YoY, mainly due to increased personnel and R&D costs; headcount at 230 (from 192 YoY).

Outlook and guidance

• Revenue growth targeted for H2 2024 compared to H1, supported by a robust pipeline and new contracts.

• Free cash flow targeted to move from -€1.5M/month at end-2024 to break-even by end-2025.

• Financing needs covered until March 1, 2025, or June 1, 2025 if full bond issue drawn, assuming successful debt renegotiations.