Soluciones Cuatroochenta (480S) Q2 2024 earnings summary

Executive summary

• H1 2024 revenue reached €13.2m, up 23.8% YoY; organic sales growth was 24%, ahead of the cited 7.5% worldwide IT-spending forecast for 2024.

• EBITDA rose 19.5% YoY to €1.18m; operating cash flow increased to €2.03m from €1.35m, and net income turned positive at €216k versus a €100k loss.

• Sofistic drove growth, with H1 sales up 46.6% to €5.4m; ARR reached €16.8m, up 10.9% from year-end 2023.

Financial highlights

• Net sales were €13.216m versus €10.673m YoY; total income was €13.691m versus €11.266m.

• EBITDA was €1.179m, up 19.5%; EBITDA margin was 8.92% versus 9.24%, with higher third-party license costs lifting procurement costs to 37% of sales from 32%.

• Net income was €215.6k versus a €100.4k loss; basic and diluted EPS were both €0.08 versus losses of €0.04 and €0.03, respectively.

• Operating cash flow was €2.029m versus €1.346m; including the 50% share of Pavabits-Matrix, operating cash flow was €2.4m versus €1.7m.

Outlook and guidance

• Billed licenses pending recognition rose €2.2m, or 52.2% from year-end 2023, indicating that Sofistic’s growth trend is expected to continue.

• Management expects the higher share of international sales to persist over the medium term; sales outside Spain were 45% in H1 versus 33% a year earlier.

• Continued inorganic growth opportunities remain under review; available liquidity and moderate leverage were described as supporting acquisitions similar to prior deals.

• Cash-flow projections indicate positive recurring operating cash flows in the short and medium term and contractual debt service from operating cash flow and cash on hand.