Proact IT Group (PACT) Q4 2024 earnings summary

Executive summary

• Q4 revenue was SEK 1,268.5–1,300 million, down 6.7% year-over-year, with organic decline of 7.2%.

• Full year 2024 saw record revenue, adjusted EBITA of SEK 350.6 million, and record new cloud service agreements.

• Q4 decline in top line and EBITDA was less severe than anticipated due to late deal closures, cost savings, and higher vendor rebates.

• CEO Jonas Hasselberg announced his departure; Board has started a search for a successor.

• Net Promoter Score increased by 3 points to 62, indicating strong customer satisfaction.

Financial highlights

• Adjusted EBITA/EBITDA for Q4 was SEK 80.2 million, down 12% year-over-year, with margin at 6.3%.

• Cash flow from operations for Q4 was SEK 207 million; year-end cash and equivalents at SEK 813.5 million.

• Net cash position at year-end was SEK 330 million, up from SEK 80 million at the end of 2023.

• Annualized recurring revenue reached SEK 1,781 million in Q4, up 1.9% year-over-year.

• Earnings per share for the year increased to SEK 8.15; Q4 EPS was SEK 1.87.

Outlook and guidance

• Positive outlook for 2025, with expectations of organic growth returning, driven by digitalization, cybersecurity, and AI.

• Board proposes increasing the dividend from SEK 2 to SEK 2.4 per share.

• Well positioned for organic growth and acquisitions in Europe, supported by a strong balance sheet.

• Anticipates growth in all regions, with Nordics leading, followed by West, U.K., and Germany.

• No extraordinary cost reductions in Q4; cost base expected to remain tight.