Admicom (ADMCM) Q3 2024 earnings summary

Executive summary

• Q3 2024 showed early signs of market improvement, with ARR growth of 4.2% year-over-year and adjusted EBITDA at 41.4% of revenue.

• Deal activity was concentrated in smaller clients, with strong new sales and cross-selling, while larger deals remained limited and customer insolvencies increased.

• Net logo growth year-to-date was +50, despite over 150 logos lost due to insolvency.

• Strategic highlights included the acquisition of Trackinno Oy, the launch of an AI-based tool, and new pricing and packaging for the Ultima ERP solution.

• Employee engagement and satisfaction improved, with eNPS rising to 20.

Financial highlights

• ARR reached €34.0m, up 4.2% year-over-year; recurring revenue grew 3.1% in Q3.

• Q3 2024 revenue was €8.7m, up 2.1% year-over-year; adjusted EBITDA was €3.6m (41.4% of revenue), down from €3.8m (44.2%) year-over-year.

• Adjusted EBIT margin was 30.4%, and profit for the period was €1.91m, down 12.9% year-over-year.

• EPS for Q3 was €0.38, down from €0.44 year-over-year.

• Recurring revenue comprised 95% of total revenue.

Outlook and guidance

• 2024 outlook unchanged: ARR growth expected at 5–10%, total revenue to grow from 2023, and adjusted EBITDA margin guidance at 32–37%.

• Guidance remains conservative due to market uncertainties and typical quarterly EBITDA variance.

• Q4 EBITDA margin expected to be lower than Q3 due to seasonality.

• Long-term ambition is to reach €100 million ARR by 2030.

• Economic uncertainty and reduced annual adjustment fees expected to limit topline growth.