Crayon Group (CRAYN) Q3 2024 earnings summary

Executive summary

• Gross profit reached NOK 1,435m, up 14% year-over-year, with strong demand in software, cloud, and security services, and robust regional growth in Europe (+23%) and Nordics (+12%), while consulting in the Nordics declined 1% year-over-year.

• Adjusted EBITDA was NOK 238m, up NOK 95m from Q3 2023, with a record-high margin of 16.6%-17% for Q3.

• Net income reached NOK 82m, up NOK 95m year-over-year, and net working capital improved by NOK 748m to NOK 157m.

• Strong international scaling, especially in Europe, with software and cloud direct business growing 28%.

• Demand for software, cloud, and security services remains robust, with public sector growth strong in Europe and the Nordics.

Financial highlights

• Gross sales for the quarter were NOK 11.5bn; revenue grew 11% YoY to NOK 1,621m.

• Adjusted EBITDA rose 67% YoY to NOK 238m, margin at 16.6%.

• Net profit was NOK 82m, a significant improvement from a loss of NOK 13m in Q3 last year; EPS at 0.86.

• Operating expenses were NOK 1,202m, up from NOK 1,125m in Q3 2023.

• Liquidity reserve at NOK 1,825m, up from NOK 1,465m YoY.

Outlook and guidance

• 2024 gross profit growth guidance revised to 15%-17% and adjusted EBITDA margin to 19%-20%.

• Net working capital guidance improved to -10% to -15% of gross profit.

• Medium-term targets include gradual increase in EBITDA margin to 25% and continued focus on organic growth.

• Expect continued strong growth in software and cloud for Q4 and 2025, with public sector wins contributing.

• Seasonality expected to continue, with higher volumes in Q2 and Q4.