u-blox (UBXN) H1 2024 earnings summary

Executive summary

• Revenue for H1 2024 was CHF 121.1 million, down 63.5% year-over-year, with Q1 marking the cycle's low and Q2 showing sequential improvement.

• Adjusted EBIT was CHF -36.2 million, down from CHF 61.7 million last year, with an adjusted EBIT margin of -29.9%.

• Free cash flow turned positive at CHF 15.7 million, supported by a CHF 38.5 million working capital improvement.

• Cost optimization program generated CHF 5 million in savings so far, with an expanded target of over CHF 20 million in annual savings.

• Major business wins in the robotic lawnmower market are expected to generate over CHF 100 million in revenue from 2024 onwards.

Financial highlights

• Revenue for H1 2024 was CHF 121.1 million, at the upper end of guidance, but down from CHF 332.3 million last year due to customer overstocking.

• Adjusted gross profit was CHF 52.9 million, with a gross margin of 43.7%, down from 46.8% last year.

• Adjusted EBIT was CHF -36.2 million, with an EBIT margin of -29.9%.

• Free cash flow reached CHF 15.7 million, mainly due to working capital improvements.

• Net cash position was CHF 99.1 million at June 30, 2024, with no gross debt.

Outlook and guidance

• Sequential revenue improvement expected in H2 2024, with Q3 revenue guidance of CHF 75–85 million and adjusted EBIT margin of -10% to -5% (excluding one-off costs).

• Full effect of cost savings targeted for 2025, with first benefits visible in H2 2024.

• Gradual recovery anticipated due to prolonged customer inventory digestion and slower end-market demand, especially in industrials.

• Management expects no significant seasonal or cyclical variations in revenue for the remainder of the year.