Adcore (ADCO) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was CAD $6.6M, down 4% year-over-year, with gross profit nearly flat at CAD $2.9M and gross margin improving to 44% from 43% year-over-year.

• North America revenue grew 22% year-over-year to CAD $2M, while APAC revenue increased 3% and EMEA declined 27%.

• Client diversification improved, with concentration dropping from 52% to 49% in Q2 and from 57% to 42% for H1 2024.

• Media Blast app reached CAD $1M ARR within 12 months of launch, highlighting strong product-market fit.

• Operating cash flow usage improved to CAD $247K in Q2 2024, down from CAD $406K+ year-over-year.

Financial highlights

• Gross profit for Q2 2024 was CAD $2.9M, down 1% year-over-year; H1 2024 gross profit rose 6% to CAD $6.0M.

• Adjusted EBITDA for Q2 2024 was negative CAD $173K, down from positive CAD $112K in Q2 2023.

• Net loss for Q2 2024 was CAD $691K, up from $0.5M year-over-year.

• Cash and equivalents stood at CAD $7.3M as of June 30, 2024, with working capital at CAD $6.4M.

• Company remains debt free, with total equity of CAD $11M as of June 30, 2024.

Outlook and guidance

• Management expects continued North America growth and is investing in sales, marketing, and technology-driven initiatives.

• EMEA weakness is seen as temporary, with recovery anticipated by late 2024 or early 2025.

• Cost reduction plans aim to save CAD $1M–$1.5M over the next 12 months to improve efficiency.

• Forward-looking statements caution about risks from client loss, policy changes, and global business environment shifts.

• 2024 is expected to be a positive year, with the second half traditionally stronger for advertising.