Trifork Group (TRIFOR) Q3 2024 earnings summary

Executive summary

• Revenue for 2024 is expected to be flat or slightly down compared to 2023, breaking a long-standing growth trend and disappointing management expectations.

• EBITDA and EBIT are both projected to be around EUR 10 million lower than 2023, with adjusted EBITDA guidance for 2024 at EUR 25–27m and EBIT at EUR 8–10m, reflecting reduced customer engagements and higher costs.

• Major cost-saving initiatives have been launched, including a 10% reduction in top management salaries, no bonuses, and workforce reductions, targeting EUR 10 million in annual savings with full effect in 2025.

• The company has compensated for lost revenue from long-term customers by onboarding new clients, expanding its pipeline, and completing acquisitions in the US and Denmark.

• Strategic focus has shifted to innovation, IP, and platform development, including AI and spatial computing, to ensure future resilience.

Financial highlights

• Q3 2024 revenue declined by 1.8% year-over-year to EUR 47.1m, with organic revenue down 1.9% and inorganic growth of 2.6%.

• Adjusted EBITDA margin for Q3 2024 was 11.3%–12.3%, down from 14.5%–15.2% in Q3 2023; EBIT margin dropped to 2.4% from 6.6%.

• Net interest-bearing debt stood at EUR 49.7m at the end of Q3, with a leverage ratio of 1.8x NIBD/adj. EBITDA.

• Free cash flow for 9M/2024 was EUR 4.2m, down from EUR 16.5m in 9M/2023.

• Trifork Labs reported EBT of EUR 2.1m in Q3 and EUR 3.9m for 9M/2024, driven by positive fair value adjustments and dividends.

Outlook and guidance

• 2024 revenue guidance is EUR 205–208m, representing -1.4% to 0.0% total growth, with adjusted EBITDA of EUR 25–27m and EBIT of EUR 8–10m.

• EUR 10 million in annual cost savings targeted for 2025, with some effects already starting in Q4 2024.

• Growth expected in Q4, driven by a strong pipeline, especially in the U.S. and public sector Denmark, and new contracts in aviation.

• Management remains cautious due to ongoing market uncertainties, contract delays, and potential macroeconomic disruptions.

• Mid-term targets (2026): 15–25% annual growth, 10–15% organic growth, and 16–20% adjusted EBITDA margin.