Rai Way (RWAY) Q3 2024 earnings summary

Executive summary

• Core revenues for the nine months ended 30 September 2024 reached €206.5m, up 1.1% year-over-year, with strong third-party customer performance and acceleration in Q3, supported by media distribution and digital infrastructure.

• Adjusted EBITDA rose 2.7% to €142.2m, with profitability up 110bps to 68.9%, driven by revenue growth, cost control, and non-recurring benefits, offsetting higher start-up costs and loss of energy incentives.

• Net income increased 1.0% to €70.5m, reflecting higher depreciation, amortization, and financial expenses from investment activities.

• Recurring cash generation exceeded €95m in nine months, surpassing the full-year 2022 value, with recurring free cash flow at €96.2m.

• Guidance for 2024 is confirmed, with management confident in continued execution and strategic diversification, including operational edge data centers and new service commercialization.

Financial highlights

• Core revenues: €206.5m (+1.1% year-over-year); adjusted EBITDA: €142.2m (+2.7%), margin at 68.9%; net income: €70.5m (+1.0%).

• CapEx totaled €25.1m, with €19.9m for development/diversification, notably 5 edge data centers.

• Net financial debt increased to €148.2m from €104.9m at year start, mainly due to investments and dividend payout.

• Cash conversion remained high at 94.0%–96.2%.

• Operating profit (EBIT) reached €103.9m (+3.4%).

Outlook and guidance

• 2024 guidance confirmed, with adjusted EBITDA expected to grow over 2023 despite lack of energy tax credits and new infrastructure setup costs.

• Maintenance and development CapEx expected to remain in line with previous year, with most development CapEx focused on diversification.

• First revenues from new services expected in 2024, with a fuller pipeline for 2025 and adj. EBITDA targeted to rise €24m (+13%) over 2023 by 2027.