Quartix Technologies (QTX) H1 2024 earnings summary

Executive summary

• Group revenue rose 10% to £16.1m for H1 2024, with 94% recurring subscription revenue supporting a strong, cash-generative model.

• Operating profit increased 13% to £2.7m, despite £0.6m in non-recurring Konetik costs.

• Subscription base expanded 12% to 282,922 units, with over 37,800 new subscriptions and more than 500 new clients won monthly.

• High customer retention and strong service reputation, with net revenue retention at 98.9% (99.4% excluding a large UK contract).

• Board expects to moderately exceed previous market expectations for revenue and profit for the year.

Financial highlights

• H1 2024 total revenue: £16.1m; gross margin: 69.2%; gross profit: £11.1m.

• Operating profit: £2.7m; operating margin: 16.9%; adjusted EBITDA: £2.73m.

• Basic EPS: 4.49p; diluted EPS: 4.37p; interim dividend of 1.50p per share proposed.

• Free cash flow (excluding Konetik acquisition): £1.1m, down 21% year-over-year.

• Net cash at 30 June 2024: £2.7m, reflecting Konetik-related costs.

Outlook and guidance

• Revenue and profit for 2024 are now expected to moderately exceed market expectations (£32.1m revenue, £5.4m adjusted EBITDA, £1.5m free cash flow).

• Further investment planned in new European territories, marketing, product development, and all six geographic markets.