Zedcor (ZDC) Q2 2024 earnings summary

Executive summary

• Achieved record quarterly revenue of $7.4M, up 20% quarter-over-quarter, and record Adjusted EBITDA of $2.7M, up 42% quarter-over-quarter.

• Deployed 178 MobileyeZ™ security towers, with fleet utilization above 90% and near 100% in the US.

• US revenue exceeded 10% of total Q2 revenue, with expansion into Texas and Colorado and a growing backlog at the Houston center.

• Completed $15M equity financing to accelerate US growth and expand manufacturing and service offerings.

Financial highlights

• Q2 2024 revenue was $7.4M, up 19% year-over-year and 20% sequentially; Adjusted EBITDA was $2.7M, up 48% year-over-year and 42% sequentially.

• Net income for Q2 2024 was $1.4M, down from $2.5M in Q2 2023, due to higher finance costs, lower other income, and a $173K loss on note repayment.

• Adjusted free cash flow for Q2 2024 was $1.0M, compared to $968K in Q2 2023.

• Cash flow from operations for the first half of 2024 was $3.1M, down 27% from $4.3M in 2023.

• Working capital at June 30, 2024 was $6.1M, up from $740K a year earlier.

Outlook and guidance

• Management expects strong revenue and Adjusted EBITDA growth to continue in the second half of 2024, maintaining a year-end MobileyeZ™ fleet target of 1,300–1,500 towers.

• Priorities include US expansion, supply chain control, new product development, and continued positive EPS.

• Demand remains robust due to infrastructure spending and increased theft/vandalism in North America.