Zedcor (ZDC) Q4 2024 earnings summary

Executive summary

• Achieved record Q4 2024 revenues of CAD 10.3 million (up 78% year-over-year and 12% sequentially), with recurring revenue exceeding 85% of total revenue.

• Adjusted EBITDA for Q4 reached CAD 4 million, a 185% year-over-year increase, with EBITDA margin over 38%.

• Year-end fleet size was 1,330+ security towers, up 62% year-over-year, with utilization rates above 90%.

• Expanded operations across major U.S. and Canadian cities, with U.S. revenue exceeding 20% of Q4 total and strong growth in Texas and Colorado.

• Customer base diversified, adding over 190 new clients in 2024 and reducing concentration risk.

Financial highlights

• Q4 gross margin was CAD 6.8 million, or 66% of revenues, driven by operational efficiencies and high utilization.

• 2024 full-year revenues were CAD 33 million, with Adjusted EBITDA of CAD 12 million (up 57% year-over-year) and a 36% EBITDA margin.

• Adjusted EBITDA margin improved to 38.7% in Q4 2024 from 24.1% in Q4 2023.

• Adjusted operating cash flow for Q4 was CAD 3.3 million, up 585% year-over-year.

• Adjusted free cash flow for 2024 was $8.1M, up from $7.1M in 2023.

Outlook and guidance

• Aggressive U.S. expansion underway, with new branches and sales hires in key markets such as Austin, Denver, Phoenix, and Nevada.

• Targeting 20-25 towers produced per week, with plans to ramp up to 35 as demand grows.

• 2025 guidance includes building 1,100-1,400 towers, with potential upside from large enterprise customers.

• Margins expected to remain strong, though short-term EBITDA margin may dip due to upfront hiring and expansion costs.

• Camera costs locked in for 2025; expects insulation from tariffs due to U.S.-based manufacturing.