TomTom (TOM2) Q2 2024 earnings summary

Executive summary

• Q2 2024 group revenue was €152 million, down 3% year-on-year, with Location Technology revenue stable at €129 million and Automotive operational revenue at €89 million.

• Enterprise traction increased with new partnerships, including Microsoft, Australian Government, Qualcomm, Moody's, and Bolt.

• Automotive innovation advanced with the launch of CARIAD navigation in Volkswagen Group and extended BMW Motorrad collaboration.

• Market unpredictability increased due to downward revisions in car production and delayed model launches, but long-term industry trends remain favorable.

• Free cash flow was an outflow of €5 million, compared to an inflow of €3 million in Q2 2023; net cash declined to €258 million at quarter-end.

Financial highlights

• Group revenue for Q2 2024 decreased by 3% year-on-year to €152 million.

• Location Technology revenue was flat year-on-year at €129 million; Automotive operational revenue fell 2% to €89 million.

• Enterprise revenue grew 11% year-on-year to €41 million, boosted by large government contracts.

• Consumer revenue fell 70% year-on-year to €23 million, as expected.

• Gross margin was 80%, down from 83% last year, impacted by non-recurring engineering costs.

• Operating result (EBIT) was a loss of €5 million, compared to a €4 million loss in Q2 2023; net result was a loss of €2 million.

• Free cash flow was an outflow of €5 million in Q2 2024, versus an inflow of €3 million in Q2 2023.

• Net cash position at quarter-end was €258 million, down from €315 million at year-end 2023.

Outlook and guidance

• 2024 group revenue expected at the lower end of €570–610 million; Location Technology revenue at the lower end of €490–520 million.

• Free cash flow guidance revised downward to 1–5% of group revenue for 2024.

• Financial ambition for 2025 postponed due to industry unpredictability and longer sales cycles in Enterprise; updated guidance to be provided with FY 2024 results.

• Free cash flow expected to be positive in Q3 and Q4 after negative results in H1.