u-blox (UBXN) Q3 2024 TU earnings summary

Executive summary

• Q3 2024 revenue reached CHF 77.6 million, up 19% sequentially but down 25% year-over-year, with business performance slowing in Q4 due to deteriorating conditions, especially in automotive.

• EBIT (adjusted) declined to CHF -7.0 million from CHF 2.4 million in Q3 2023; EBIT margin (adjusted) fell to -9.1%.

• Cost reduction measures announced in August are 70% implemented, ahead of schedule, with most remaining actions to be completed by year-end.

• Confidence remains in long-term prospects, supported by structural demand, design wins, and partnerships.

• Launched X20, a next-generation high-precision GNSS platform for mass-market centimeter-level accuracy.

Financial highlights

• Over CHF 20 million in annual cost savings targeted, with initial savings expected in Q4 and full effect in H1 2025.

• Revenue at constant exchange rates decreased by 23% year-over-year.

• Reported EBIT dropped to CHF -11.1 million, with EBIT margin at -14.4%, impacted by lower capitalization of development costs.

• Significant reduction in R&D capitalization in Q3, with further reductions expected.

• One-off costs of up to CHF 20 million expected in H2 2024 due to cost optimization program.

Outlook and guidance

• Q4 2024 revenue expected between CHF 60-70 million; adjusted EBIT margin forecasted at -25% to -15%.

• Early indicators suggest a return to growth in 2025, with double-digit growth expected in the Locate business.

• Near-term visibility remains limited, with ongoing market uncertainty.

• Market conditions anticipated to remain challenging in the near term, with recovery expected in 2025.