Admicom (ADMCM) Q2 2024 earnings summary

Executive summary

• Annual recurring revenue (ARR) grew 6.7% year-over-year to €33.68 million in Q2 2024, with EBITDA margin improving to 38.4% despite lower annual adjustment fees and sector headwinds.

• Strategic focus remains on integrating the product suite, cross-selling, platform strengthening, and preparing for accelerated growth and international expansion.

• Customer base is primarily Finnish SMBs, with a growing enterprise and international presence, highlighted by a major contract with a Swedish construction company.

• Customer churn showed a positive trend, with insolvencies still accounting for a significant portion of terminations.

• Strong cost control and operational efficiency maintained amid challenging construction market conditions.

Financial highlights

• Q2 2024 revenue was €9.48 million (+0.7% YoY); H1 2024 revenue was €18.08 million (+2.6% YoY).

• Adjusted EBITDA for Q2 was €3.64 million (38.4% margin); H1 adjusted EBITDA was €6.3 million (34.8% margin).

• Profit for Q2 was €1.92 million, down 7.5% YoY; H1 profit was €2.99 million, down 18.5% YoY.

• 94% of total revenue is recurring.

• Cash and cash equivalents at period end were €11.0 million, with strong cash flow and high cash conversion (~80% of EBITDA to cash).

Outlook and guidance

• 2024 outlook unchanged: ARR expected to grow 5–10%, total revenue to increase, and adjusted EBITDA margin to land between 32–37%.

• Price increases for project management and accounting solutions to take effect gradually from July, with low single-digit impact.

• Annual adjustment fees projected to decrease to €1.5 million in 2024 (from €2.3 million in 2023), negatively impacting growth and profitability.

• Continued headwinds from lower adjustment fees and economic uncertainty expected in Q3.

• Focus remains on cost control, efficient sales, and churn prevention until market recovery.