Tecnotree (TEM1V) Q2 2024 earnings summary

Executive summary

• Net sales for H1 2024 reached EUR 34.9 million, flat year-over-year, with Q2 sales up 15% sequentially and positive free cash flow of EUR 0.8 million in Q2, reversing negative FCF from Q1.

• Order backlog increased 6% year-over-year to EUR 72.6 million, supporting future revenue visibility and reflecting strong demand.

• Delivered 10 digital transformation go-lives and ~600 new product features in H1, focusing on AI/ML, cloud-native, and campaign management.

• Recognized by Gartner and TM Forum for innovation and industry leadership, with 137+ AI patents.

• Strategic expansion into stable markets (Middle East, APAC, Europe, North America) and reduced exposure to frontier markets, with new partnerships including Bytedance, HCLTech, and Emirates Integrated Telecommunications Company.

Financial highlights

• Adjusted operating result for H1 was EUR 10.9 million (31.1% margin), up 10.7% year-over-year; Q2 adjusted operating result was EUR 6.4 million (34.4% margin).

• Net income for H1 2024 was EUR 3.7 million, down from EUR 5.5 million last year due to one-time costs; Q2 net income was EUR 2.1 million, excluding EUR 2.9 million impairments.

• EBIT for H1 was EUR 8 million, down from EUR 9.8 million last year due to impairments.

• Cash and cash equivalents increased 57% year-over-year to EUR 16.8 million.

• Shareholders' equity rose to EUR 87.6 million from EUR 81.6 million.

Outlook and guidance

• Revenue for 2024 is guided to grow by 2%-7%, with EBIT expected to rise 7%-15%.

• Free cash flow guidance for H2 2024 is EUR 2–5 million, with positive FCF expected for the year.

• Continued focus on profitable revenue growth, stable free cash flow, and optimized capital allocation.

• Cost optimization initiatives expected to yield EUR 4.5 million in H2 2024 and EUR 7 million in 2025.

• Focus remains on increasing license sales and evolving to an Annual Recurring Revenue model for more predictable revenue.