Skillcast Group (SKL) H1 2024 earnings summary

Executive summary

• H1 revenue rose 24% YoY to £6.378m; ARR reached £10.3m, up 27% YoY and 11% since December 2023.

• EBITDA returned to positive £31,208 from a £749,261 loss; free cash flow was £1.1m and period-end cash was £8.3m.

Financial highlights

• Subscription revenue rose 35% to £5.197m; professional services revenue fell 9% to £1.181m.

• Gross margin increased 5.2 percentage points to 71.7%, supported by productivity gains and lower prior-year cloud transition costs.

• Overheads grew 9% to £4.7m versus 26% in H1 23; total people costs increased 5% to £4.6m.

• Operating loss narrowed to £94,190 from £867,391; PBT was £40,876 and after-tax loss was £8,069, including a £48,945 tax charge.

• Free cash flow was £1.1m versus a £0.1m outflow in H1 23; cash was £8.3m versus £7.2m at June 2023.

Outlook and guidance

• Trading was in line with expectations; ARR growth in H2 is expected to support subscription revenue and profit growth.

• Cost control and operational gearing support management’s expectation of profitability growth in H2 and beyond.

• Professional services remained slower than the prior year; July and August were slow, followed by stronger September trading, and reduced or redeployed team costs are expected to affect results from the next financial year.

• Net retention is expected to return above 100%; planned price increases moderate to 3%, from 7% this year and 10% last year.