u-blox (UBXN) H2 2024 earnings summary

Executive summary

• 2024 was marked by a deep downturn in semiconductors, with overstocking and weak demand, especially in Connect and industrial/automotive sectors, prompting a strategic shift to focus on Locate and phase out Cellular, which once contributed a third of revenue.

• Management executed a workforce reduction of over 20%, and the Board voluntarily cut its compensation by 25% to align with shareholder interests.

• Cost optimization exceeded targets, achieving CHF 25 million in savings versus CHF 20 million planned.

• Despite revenue halving, the company generated CHF 10 million in free cash flow and improved gross margin by 200 basis points to 46%.

• Positioned for recovery in 2025 with higher order levels and a leaner cost structure.

Financial highlights

• FY 2024 revenue was CHF 263 million, down 54% year-over-year due to overstocking and market softness.

• Gross margin improved to 46% in 2024, up nearly 200 basis points, driven by a higher-margin Locate business.

• EBIT dropped from CHF 70 million in 2023 to CHF -60 million in 2024, with sequential improvement in the second half.

• Free cash flow was positive at CHF 10 million, supported by CHF 60 million working capital improvements.

• Net cash position increased to CHF 91 million, with no financial debt and dividends paid.

Outlook and guidance

• Q1 2025 revenue expected between CHF 65–75 million, with cash EBIT margin between -12% and -2%.

• Sequential quarter-on-quarter improvement anticipated in 2025, with double-digit growth for Locate and Short Range businesses.

• Midterm target for Locate is CHF 350 million revenue and >25% cash EBIT margin, with break-even at CHF 200 million revenue.