Observit (OBSE) Q2 2024 earnings summary

Executive summary

• Achieved 22% year-over-year growth in recurring software revenue (ARR) in Q2 2024, with strong organic growth and positive EBITDA despite ongoing investments in expansion.

• Delays in vehicle deliveries postponed hardware sales to H2 2024, but software focus maintained positive development and margins.

• Strategic exit from unprofitable support contracts reduced revenue by SEK 1.6M in Q2, offset by core business growth and improved margins.

• Significant progress in the UK market, with safety camera business up 34% year-over-year.

• International expansion ongoing, with new contracts and partnerships in the UK, Finland, and Denmark.

Financial highlights

• Q2 2024 net sales: SEK 11.0M (SEK 10.4M in Q2 2023); H1 2024 net sales: SEK 24.6M (SEK 21.6M in H1 2023), up 14% year-over-year.

• Q2 2024 EBITDA: SEK 1.2M (SEK -0.5M); EBIT: SEK -0.1M (SEK -1.8M); EBT: SEK -0.2M (SEK -1.8M).

• Q2 2024 gross profit: SEK 5.7M (SEK 4.9M); gross margin: 52.0% (47.2%).

• Q2 2024 result per share: SEK 0.000 (SEK -0.003).

• Cash flow from operations after working capital changes: SEK 0.1M (SEK 0.0M).

Outlook and guidance

• Large hardware deliveries planned for H2 2024, expected to boost global presence and market position.

• Continued investments in core areas and international expansion, with optimism for the remainder of 2024.