Nepa (NEPA) Q2 2024 earnings summary

Executive summary

• Net sales in Q2 2024 declined 6.9% year-over-year to SEK 70.0 million, with ARR down 8.2% to SEK 160.1 million.

• Profitability improved: EBIT rose to SEK 1.7 million from -9.7 million, and net profit reached SEK 1.3 million from -9.0 million.

• Cost-saving measures and efficiency gains drove a higher gross margin of 76.9% (up 2.7 pp year-over-year).

• The company is focusing on building a stronger sales team and enhancing its marketing intelligence suite.

Financial highlights

• Subscription revenue fell 4.3% to SEK 42.8 million; ad hoc revenue from subscribers dropped 37.8%, while ad hoc revenue from other clients rose 42.6%.

• Adjusted EBIT improved to SEK 1.7 million from -2.9 million; adjusted EBIT margin was 2.4% (vs. -3.8%).

• Net income for Q2 was SEK 1.3 million (vs. -9.0 million); EPS was SEK 0.16 (vs. -1.14).

• Operating cash flow for Q2 was SEK -8.9 million (vs. -7.6 million); net financial position at quarter-end was SEK 24.9 million.

Outlook and guidance

• Management expects continued soft market conditions in the short term, with lower activity during the summer.

• Focus remains on profitable growth through product development and sales team reinforcement.