Otovo (OTOVO) Q2 2024 earnings summary

Executive summary

• Q2 2024 installations grew 13% sequentially to 1,627–1,827 units, but were down 43% year-over-year due to post-energy crisis normalization and weak demand in key regions.

• Revenue reached NOK 240 million (APM), with gross margin at a record 28%, up 4 percentage points year-over-year, driven by improved cost control and higher battery attachment rates.

• Battery attachment rates surged to 48% of new sales, with 42% of installed systems including batteries.

• Strategic partnerships with ADAC and Volkswagen/Elli aim to lower customer acquisition costs and expand sales channels.

• Operational focus is on cost efficiency, new sales methodologies, and monetizing the subscription portfolio to strengthen liquidity.

Financial highlights

• Total operating income for Q2 2024 was NOK 183 million, down year-over-year due to lower installation activity.

• Gross profit was NOK 67 million, with blended gross margin at 28% (41% in subscription, 22% in direct sales).

• EBITDA for the quarter was NOK -76 million, a slight improvement sequentially and year-over-year.

• OpEx reduced by 16% year-over-year and 8% quarter-over-quarter to NOK 177 million.

• Cash balance at quarter-end was NOK 334 million, after NOK 85–96 million negative operational cash flow.

Outlook and guidance

• Management prioritizes closing the continental portfolio sale, continued cost discipline, and increasing sales through proprietary lead sources, partnerships, and improved sales methodology.

• Cost program from last year is expected to be completed in Q3, targeting NOK 90 million in annualized savings.

• Positive market outlook in Southern and Central Europe, while Nordics and Spain remain challenging.

• Expectation of higher ticket sizes in H2 2024 as battery attachment and sales in larger markets increase.

• Monetization of the continental subscription portfolio is key to freeing up cash; alternatives will be considered if unsuccessful.