Trifork Group (TRIFOR) Q2 2024 earnings summary

Executive summary

• Q2 2024 and H1 saw revenue and EBITDA declines, with Q2 revenue at EUR 52.5m (down 5.0% year-over-year) and organic revenue down 2.0%; full-year growth is still expected, but at a reduced rate.

• Adjusted EBITDA margin for Q2 was 12.0%, down from 14.0% in Q2 2023, mainly due to lower utilization and negative Cyber Protection results.

• Guidance for 2024 was revised to EUR 215-220 million in revenue (3.4-5.8% growth) and adjusted EBITDA of EUR 31-34 million (margin 14.1-15.8%).

• Public sector contract wins and a strong pipeline, along with Labs segment growth and fair value gains, are expected to drive recovery from late 2024 into 2025-2027.

• Strategic initiatives and acquisitions remain on track, supporting positive momentum for H2 2024.

Financial highlights

• Q2 2024 EBIT was EUR 1.9m (3.6% margin), down 53.4% year-over-year; adjusted EBITDA for H1 was EUR 11.1m (10.8% margin), down 28.4% year-over-year.

• Organic revenue in Q2 declined by nearly 7% year-over-year; core business excluding license sales showed some growth.

• Third-party license and hardware revenue dropped by EUR 3.2 million in Q2, impacting Run segment results.

• Labs segment EBITDA reached EUR 1.9 million for H1, with book value increasing to EUR 73.4 million.

• Free cash flow for H1 2024 was EUR 1.2m, down from EUR 6.2m in H1 2023.

Outlook and guidance

• 2024 revenue guidance is EUR 215–220m, with total growth of 3.4–5.8% and organic growth of 0.8–3.2%; adjusted EBITDA guidance is EUR 31–34m (14.1–15.8% margin).

• Margin improvement is anticipated in H2 2024 as new contracts ramp up.

• Medium-term targets: 15–25% annual growth, 10–15% organic growth, and 16–20% EBITDA margin by 2026.

• Guidance assumes no material change in soft market conditions; new acquisitions not included.