Quarterhill (QTRH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $41.5 million, up 7.5% year-over-year, with a $500 million revenue backlog at quarter end.

• Adjusted EBITDA was $1.7 million, down from $2.9 million last year but up from $0.2 million in Q1.

• Positive cash from operations of $0.8 million marked the first such result in two years.

• The acquisition of Red Fox, a provider of automated vehicle detection and classification software, was completed in Q2, expanding software offerings and expected to enhance both tolling and enforcement business units.

• Net loss from continuing operations narrowed to $3.0 million from $10.2 million year-over-year.

Financial highlights

• Q2 revenue was $41.5 million, up 7.5% from Q2 2023; year-to-date revenue was $76.4 million, up 14%.

• Adjusted EBITDA for Q2 was $1.7 million; for six months: $1.8 million.

• Gross margin in Q2 was 21%, down from 26% in Q2 2023 but up from 18% in Q1 2024.

• Operating expenses for Q2 were $10.8 million, slightly up from $10.6 million last year; year-to-date OpEx was $21.2 million, down from $22.2 million.

• Cash and cash equivalents at quarter end were $24 million, down from $42.7 million at year-end 2023, mainly due to the Red Fox acquisition and debt repayments.

Outlook and guidance

• Expectation to generate positive cash from operations for the full year and grow the cash balance by year-end.

• Projected close to double-digit revenue growth year-over-year, with strong revenue visibility for the next two quarters.

• Gross margin percentage and adjusted EBITDA margins are expected to improve as more projects move into higher-margin maintenance phases.

• No significant macroeconomic or recessionary headwinds anticipated due to the essential nature of the business.

• Focus remains on expanding market reach, operational integration, and AI-driven software solutions.