Cy4gate (CY4) Q2 2024 earnings summary

Executive summary

• First half 2024 results show solid governmental sales, but turnover was impacted by seasonality and a decline in foreign Forensic Intelligence revenues amid geopolitical uncertainty, partially offset by XTN and RCS sales.

• Value of production for H1 2024 was €31.1M, down 8.6% YoY, with revenues at €29.8M and EBITDA at €2.4M (margin 7.6%).

• Net loss widened to €9.2M from €3.0M YoY, affected by higher depreciation, amortization, and extraordinary costs.

• Growth in Italian Defence and Justice sectors, along with the XTN acquisition, partially offset declines; commercial pipeline and backlog remain robust.

• Strategic acquisitions (XTN, Diateam) and new partnerships aim to diversify and expand market presence.

Financial highlights

• Revenues decreased by 8.6% to €31.1M compared to 1H 2023, mainly due to a slowdown in international Forensic Intelligence.

• EBITDA fell to €2.4M from €5.5M YoY, with margin dropping to 7.6% from 16.2%.

• Net loss widened to €9.2M, impacted by higher depreciation, amortization, and extraordinary costs.

• Shareholders' equity decreased to €100.3M from €111.1M at FY 2023.

• Net financial position deteriorated to -€19.1M, mainly due to XTN acquisition, capex, and share buyback.

Segment performance

• Business mix shifted due to XTN consolidation and increased cyber activities in Defense.

• Forensic Intelligence accounted for ~54% of revenues, Cyber Security for 30%, and Decision Intelligence for 11%.

• Domestic sales rose, partially offsetting the decline in international sales.

• Italian Defence and Justice sectors showed steady growth, offsetting some foreign Forensic Intelligence declines.

• Decision Intelligence, Cybersecurity, and Forensic in Italy partially compensated for lower foreign revenues.