Enea (ENEA) Q2 2024 earnings summary

Executive summary

• Achieved 14% organic growth and a 35% EBITDA margin in Q2 2024, with strong performance in security and network segments.

• EPS reached SEK 1.63, significantly higher than Q2 last year, which was impacted by non-recurring items.

• Secured a $2.9 million 5G UDR license expansion deal with a major North American customer, driving network business growth.

• Employee engagement and satisfaction improved, with a 98% response rate, higher eNPS scores, and ISO 9001 recertification.

• Continued investment in R&D, representing 23% of Q2 revenue and 25% for H1.

Financial highlights

• Q2 2024 net sales were SEK 236.1 million, up 14% year-over-year; total revenue SEK 239.5 million.

• Adjusted EBITDA was SEK 83.1 million, with a margin of 35.2%; gross margin improved to 79.2%.

• EPS was SEK 1.63; profit after tax SEK 34.0 million, a turnaround from last year's loss.

• Operating cash flow was SEK 37.1 million (down from SEK 77 million last year); net cash flow -SEK 11.7 million.

• Net debt reduced to SEK 144.5 million (from SEK 220.4 million); equity ratio 66.5%, net debt/EBITDA 0.5.

Outlook and guidance

• Expects strong cash flows and EBITDA margin above 30% for full year 2024, despite industry challenges.

• Long-term ambition is double-digit growth in focus areas and EBITDA margin above 35%.

• Growth outlook remains cautiously optimistic amid macroeconomic headwinds.