Physitrack (PTRK) Q2 2024 earnings summary

Executive summary

• Revenue grew 5% year-over-year in Q2 2024, with subscription revenue up 21% to €3.2m, now 82% of total revenue, and annualized revenue at €16.1m.

• Lifecare division led growth, accounting for 64% of business, with 16% license growth and 10% revenue growth year-over-year; Wellness faced a slight revenue decline but launched new AI-powered products.

• Innovation focus continued with launches of Nexa, Physitrack Assistant, and Champion Health 3.0, plus expansion into new markets and positive customer feedback.

• Subscription revenue increased to 82% of total, up from 80% in Q1 2024, reflecting a strategic shift to recurring revenue.

• The group posted a negative free cash flow of €0.8m and an adjusted operating loss of €0.3m in Q2, impacted by seasonal working capital movements.

Financial highlights

• Six-month revenue reached €8.1m, up 8% from prior year; subscription revenue grew 21% to €6.5m (81% of total).

• Adjusted EBITDA for H1 was €2.0m (24% margin), slightly down from 25% last year; Q2 adjusted EBITDA was €0.9m (23% margin).

• Operating cash flow for H1 increased to €1.5m; Q2 saw a free cash flow outflow of €0.8m due to seasonal factors.

• Lifecare EBITDA margin was strong at 48%; Wellness margin declined to 2% due to revenue drop and investments.

• Available liquidity at period end was €1.7m, with €1.2m undrawn on the facility.

Outlook and guidance

• Targeting a doubling of revenue in the medium term and an EBITDA margin of 40–45%, with short-term margin pressure from acquisitions.

• Cash flow expected to stabilize and turn positive in H2 2024; no short-term dividend distribution expected.

• Continued innovation and digital marketing to support growth, with no expected reversal in Lifecare's positive trend.

• Organic growth pacing aligns with ambitions; 21% revenue growth in Lifecare seen as healthy for current scale.

• Plans to reinvest profits and cash flows into organic growth initiatives, supporting future dividend potential.