Spir Group (SPIR) Q3 2024 earnings summary

Executive summary

• Achieved record-high annual recurring revenue (ARR) of MNOK 425, up 10% year-over-year, and total revenues of MNOK 282, a 7% increase from Q3 last year, driven by strong Real Estate segment performance and the consolidation of Unbolt AS.

• Adjusted EBITDA rose 14% to MNOK 59, with margin improving to 21%, reflecting improved gross profit and cost initiatives.

• Net income surged to MNOK 40 from MNOK 6 in Q3 2023, supported by operational gains and a one-off financial gain from Unbolt consolidation.

• Strategic acquisition of the remaining 57% of Unbolt AS, strengthening the real estate data and analytics offering and product portfolio.

• Focus on M&A and bolt-on acquisitions, with integration of Unbolt and iVerdi expected to generate synergies and expand offerings.

Financial highlights

• Revenue up 7% year-over-year to MNOK 282; gross profit up 9% to MNOK 169; gross margin improved to 60% from 58% last year.

• Adjusted EBITDA of MNOK 59, up 14% from Q3 2023; operating profit up 6% to MNOK 20.

• Net finance of MNOK 20 includes a one-off gain from Unbolt consolidation.

• Free cash flow for the first nine months rose to MNOK 59, with operational cash flow at MNOK 156.

• Cash and cash equivalents at period end: MNOK 54; liquidity reserve MNOK 50.

Outlook and guidance

• Entering Q4 with a positive outlook, expecting continued growth in subscription-based and transaction-based revenues, supported by market recovery in Norway and Sweden.

• Ongoing investments in product development and cost control are expected to further strengthen margins and cash flow.

• Metria revenue in 2025 may be impacted by open data implementation in Sweden, but gross profit is expected to improve as data costs decrease.

• Consulting revenues expected to remain stable, with high demand in IT and climate/nature domains.

• Cost control and efficiency improvements remain key focus areas.