InCoax Networks (INCOAX) Q3 2024 earnings summary

Executive summary

• Net sales for Q3 2024 reached SEK 16.9 million, up from SEK 14.7 million year-over-year, driven by sales to a US-based FiberLAN operator.

• Collaboration with Nokia advanced, with increased market activities and integration into Nokia's product portfolio, targeting operators in the US, Europe, and Asia.

• Sales to Google Fiber continued as planned, and a major US Tier-1 operator resumed testing InCoax's solution.

• InCoax nearly doubled sales in the first three quarters compared to the same period last year, reflecting strong execution of its strategic plan.

Financial highlights

• Q3 2024 net sales: SEK 16.9 million (Q3 2023: SEK 14.7 million); nine-month net sales: SEK 67.1 million (2023: SEK 37.0 million).

• Q3 operating loss (EBIT): SEK -9.0 million (Q3 2023: SEK -1.8 million); nine-month EBIT: SEK -11.6 million (2023: SEK -11.2 million).

• Q3 earnings after tax: SEK -8.8 million (Q3 2023: SEK -1.9 million); EPS: SEK -0.08 (Q3 2023: SEK -0.03).

• Cash flow for Q3: SEK -2.8 million (Q3 2023: SEK -17.3 million); nine-month cash flow: SEK 18.6 million (2023: SEK -26.5 million).

• Cash equivalents at period end: SEK 33.6 million (2023: SEK 10.0 million); equity ratio: 78.2% (2023: 73.0%).

Outlook and guidance

• Anticipates significant sales through Nokia's channels starting in 2025, with long-term growth as a qualified supplier.

• Board targets at least 50% annual organic revenue growth and positive operational cash flow with EBIT margin of at least 10% from 2025.

• Expects gradual improvement in network infrastructure market in 2025 as inventory levels stabilize and interest rates decrease.