Techstep (TECH) Q4 2024 earnings summary

Executive summary

• Achieved record high adjusted EBITDA and 4% year-over-year revenue growth in Q4 2024, with total revenue of NOK 312.5 million and NOK 1.07 billion for FY 2024.

• Profitability improved, with adjusted EBITA up 100% year-over-year in Q4 and positive for the ninth consecutive quarter.

• Recurring revenue annualised increased by 6% year-over-year, driven by 11% growth in Own Software and strong partner sales in Poland and Europe.

• Strategic shift towards recurring and end-to-end services, with momentum in both direct and indirect sales channels and new partnerships, including a LOI for UK/Ireland expansion.

• Commercial momentum continued, with growth in hardware and software across all markets, though Advisory & Services saw some softness.

Financial highlights

• Q4 2024 revenue grew 4% year-over-year to NOK 312.5 million; FY 2024 revenue at NOK 1.07 billion.

• Net gross profit up 5% year-over-year to NOK 94.5 million in Q4, with a stable 30% margin.

• Adjusted EBITDA for Q4 was NOK 49.4 million (15.8% margin), and adjusted EBITA was NOK 21.3 million (6.8% margin), both showing significant improvement year-over-year.

• Net loss of NOK 4.5 million in Q4, mainly due to non-cash amortisation and impairment charges.

• Operating cash flow was NOK 71.3 million in Q4; cash and equivalents at NOK 30.8 million at year-end.

Outlook and guidance

• 2025 guidance: recurring revenue annualised growth of 15–25%, net gross profit growth of 12–18%, and adjusted EBITA conversion target of 13–18%.

• Recurring revenue contracts at record highs entering 2025, with partner channel expansion progressing but ramp-up timing uncertain.

• No plans to adjust 2025 guidance downward; confident in current outlook despite project complexity.

• Further guidance and 2026 outlook to be provided in Q2 presentation.

• Continued cost optimisation and IT infrastructure investments planned for 2025.