Netcompany Group (NETC) Q3 2024 earnings summary

Executive summary

• Revenue grew 10.4% year-over-year in Q3 2024 to DKK 1,613.9m, driven by strong performance in Denmark, Netcompany-Intrasoft, Norway, and the Netherlands.

• Net profit increased 73.9% to DKK 139.1m, with gross profit up 26.6% and adjusted EBITDA up 40.1%.

• Adjusted EBITDA margin rose to 19.1% in Q3, with margin expansion across most segments.

• Employee count rose 4.2% year-over-year to 8,088 FTEs, with attrition rate at 17.5%.

• Significant new contracts were won in Norway, Denmark, the UK, Greece, and the EU.

Financial highlights

• Q3 revenue up 10.4% year-over-year to DKK 1,613.9m; nine-month revenue up 8.2% in constant currencies.

• Gross profit margin improved to 31.4% in Q3, up 3.4 percentage points year-over-year.

• Adjusted EBITDA margin at 19.1% in Q3; free cash flow up 44.8% to DKK 145.3m.

• Leverage ratio improved to 1.5x from 1.6x year-over-year.

• Revenue visibility for 2024 increased 7% to DKK 6,278.7m.

Outlook and guidance

• 2024 revenue growth expected between 7% and 10%, with adjusted EBITDA margin between 15% and 18%.

• Licence revenue for 2024 expected to be at least 1% of total revenue, with backend-loaded realisation.

• Midterm targets for 2026 reiterated: revenue >DKK 8.5bn, adjusted EBITDA margin >20%, and >DKK 2bn cash redistribution.

• Share buyback programme increased to DKK 800m for 2024, including a new DKK 250m tranche.