Cy4gate (CY4) Q3 2024 earnings summary

Executive summary

• All economic indicators improved year-over-year for the first nine months of 2024, with seasonality still impacting turnover but partially offset by XTN and DARS sales.

• Value of production grew by 6% compared to 9M 2023, driven by defence and cyber intelligence sectors, and the acquisition of XTN.

• Value of production rose 5.8% year-over-year to €47.5 million, driven by M&A and deseasonalization initiatives.

• EBITDA grew 11.9% year-over-year to €3.6 million, with an EBITDA margin of 7.6%.

• Strategy to reduce business seasonality is progressing, supported by a strong backlog from significant multi-year contracts.

Financial highlights

• Revenues reached €47.5M, up 5.8% year-over-year, mainly from Defence and national Forensic Intelligence, and XTN Cognitive Security.

• Operating revenues were €45.4M (up from €43.6M), and total revenues €47.5M (up from €44.9M) compared to 9M 2023.

• EBITDA margin improved to 7.6% from 7.2% year-over-year.

• Adjusted EBIT was negative at €-7.8M, and net financial position worsened to €-35.2M from €-13.6M at FY 2023.

• Net Financial Position (NFP) was negative €30.8 million, reflecting increased debt from acquisitions and capex.

Outlook and guidance

• 2024 guidance confirmed, with a strong backlog and recurring revenues supporting future performance.

• Expected 2024 revenues pipeline is ~€122M with an 11% conversion rate; backlog and recurring revenues estimated at €38M and €13-15M, respectively.

• Backlog and recurring contracts for 2024 projected at €69-72 million.

• Total revenues for 2024 expected in the range of €84-90 million.