Quarterhill (QTRH) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 7.5% year-over-year to $41.5 million, with positive cash flow from operations for the first time in two years.

• Adjusted EBITDA was $1.7 million, down from $2.9 million last year but up from $0.2 million in Q1, with margin improvement sequentially.

• Substantial revenue backlog of $500 million provides strong visibility for 2024 and beyond.

• Acquisition of Red Fox I.D. Limited, a profitable automated vehicle detection software provider, closed in Q2, expanding software offerings and AI capabilities.

• Net loss from continuing operations narrowed to $3.0 million from $10.2 million year-over-year.

Financial highlights

• Q2 revenue: $41.5 million, up 7.5% year-over-year; year-to-date revenue: $76.4 million, up 14%.

• Q2 adjusted EBITDA: $1.7 million (down from $2.9 million last year, up from $0.2 million in Q1); year-to-date adjusted EBITDA: $1.8 million (up from negative $0.9 million last year).

• Gross margin in Q2: 21% (down from 26% last year, up from 18% in Q1); expected to improve through 2024.

• Q2 operating expenses: $10.8 million (up slightly year-over-year); year-to-date OpEx: $21.2 million (down from $22.2 million last year).

• Cash and cash equivalents at June 30, 2024: $24 million (down from $42.7 million at end of 2023, reflecting Red Fox acquisition and debt repayments).

Outlook and guidance

• Expectation to generate positive cash from operations for full year 2024 and grow cash balance by year-end.

• Projected close to double-digit revenue growth year-over-year for 2024.

• Gross margin and adjusted EBITDA margins expected to improve as more projects move into higher-margin maintenance phases.

• Focus remains on expanding market reach, operational integration, and AI-driven software solutions.

• Forward-looking statements caution on risks and uncertainties affecting 2024 financial expectations.