Terago (TGO) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $6.54 million, up 0.8% year-over-year, with a 1.2% increase in gross margin and improved operational efficiency.

• Adjusted EBITDA rose to $944,000, up 2.8% year-over-year, while net loss widened to $3.34 million due to higher interest costs.

• Customer churn dropped to 0.9%, and ARPA increased 8.3% to $1,221.

• Cash flow from operations grew 56% to $1.1 million, and backlog MRR surged 50% to $114.1 million.

• Secured a multi-million-dollar, multi-year contract with a major Canadian retailer for managed network solutions.

Financial highlights

• Q3 2024 revenue was $6.54 million, up from $6.49 million year-over-year; nine-month revenue reached $19.59 million.

• Gross profit margin improved to 73.2% from 72.4% year-over-year.

• Adjusted EBITDA for Q3 2024 was $944,000, up 2.8% year-over-year; nine-month Adjusted EBITDA up 25.4%.

• Net loss for Q3 2024 was $3.34 million ($0.17/share), compared to $3.09 million ($0.16/share) in Q3 2023.

• Cash and short-term investments totaled $5.72 million at quarter end.

Outlook and guidance

• Revenue contribution from the new multi-year retailer contract is expected to begin in the second to third half of next year.

• Positioned for continued profitable growth, focusing on expanding the sales engine and leveraging strong demand for managed network solutions.

• Ongoing transformation efforts aim to drive top-line growth and long-term value creation.

• Sales pipeline remains robust with significant market activity and focus on top-line growth.