SSC Security Services (SECU) Q3 2024 earnings summary

Executive summary

• Operates as a public holding company acquiring and growing physical and cyber security firms across Canada, with 3,000 employees nationwide.

• Completed three major acquisitions since 2021, transforming annual revenue to approximately $110 million.

• Achieved record Q3 revenue of $29.7 million, up 12.1% year-over-year, marking the strongest Q3 in company history.

• Adjusted EBITDA rose 30% to $1.3 million for the quarter, and 37.2% year-to-date to $3.8 million.

• Managed by experienced owner-operators with significant insider ownership and a consistent dividend record.

Financial highlights

• Revenue for Q2/Q3 FY2024 was $29.7M, up 12.1% year-over-year; YTD revenue reached $91.0M, up over 14%.

• Gross profit for Q2/Q3 FY2024 was $4.3M, up from $4.0M a year ago; YTD gross profit was $13.1M, up 7.2%.

• Adjusted EBITDA for Q2/Q3 FY2024 was $1.3M, up 30% year-over-year; YTD Adjusted EBITDA was $3.8M, up 37.2%.

• Gross margin declined slightly to 14.5% in Q2 FY2024 but remained within long-term expectations.

• Comprehensive net income for the nine months ended June 30, 2024, was $0.7M, up from $0.2M year-over-year.

Outlook and guidance

• Targets 10–15% annual Adjusted EBITDA growth per share.

• Expects continued growth in demand for security services and plans to leverage national presence for new contracts.

• Additional growth may come from disciplined acquisitions in the Canadian security industry.

• Plans to convert remaining legacy assets to cash within the next year to fund business expansion.

• Will continue dividends, maintain minimal debt, and buy back shares when undervalued.