Physitrack (PTRK) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue grew 1% year-over-year to €3.9m, with Lifecare up 7% and Wellness down 9% due to delayed product rollouts and lower-than-expected sales.

• Subscription revenue rose 19% year-over-year, now representing 82% of total revenue, up from 72% in Q3 2023.

• Adjusted EBITDA for the nine months was €2.9m (24% margin), stable year-over-year; Q3 adjusted EBITDA was €0.9m (23% margin).

• Group recorded a negative cash flow of €0.4m for Q3, but negative cash flow halved sequentially from Q2 2024.

• Strategic focus remains on high-margin, recurring revenue streams and product-led growth.

Financial highlights

• Nine-month revenue reached €12.0m, up 5% from the prior year; subscription revenue was €9.8m, up 19%.

• Adjusted EBITDA for the nine months was €2.9m (24% margin), flat year-over-year; EBITDA was €2.5m, up 10%.

• Operating cash flow for nine months was €1.9m, up from €1.4m year-over-year.

• Free cash flow outflow YTD was €1.1m, improved from €1.2m last year, mainly due to working capital timing and EBITDA growth.

• Adjusted EPS for Q3 was (€0.02), and YTD was (€0.04), compared to €0.00 and €0.01 last year.

Outlook and guidance

• Expectation to return to cash flow neutral or positive run rate by end of 2024, with medium-term goal to double revenue and achieve 40-45% EBITDA margin.

• No plans to raise additional capital; available liquidity of €1.3m deemed sufficient.

• Anticipate revenue acceleration and margin improvement as new products and markets ramp up, especially after Champion Health launches in Sweden and Germany.

• Profits and cash flows to be reinvested in organic growth, supporting future dividends.