In This Article:
Release Date: November 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Techstep ASA (OSL:TECH) reported growth in both revenue and net gross profit for the first time in over two years.
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Recurring revenue annualized increased by 6% year over year, with the company's own software showing a 12% growth in recurring revenue.
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The company achieved a positive EBITA adjusted for the eighth consecutive quarter, with an 11% improvement year over year.
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Techstep ASA secured a new exclusive agreement with Tradebroker, leading to new customer signings and onboarding.
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Strong commercial momentum was observed across solution portfolios and defined markets, with several new signings and renewed contracts.
Negative Points
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Net loss for the period was NOK6 million, primarily due to non-cash amortization of intangible assets.
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Recognized revenues in Norway decreased by 7% year over year, driven by a decline in revenues from device sales.
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The gross margin on device sales decreased due to changes in customer mix and increased device volume.
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Operating costs saw a slight increase, including personnel costs, despite ongoing cost optimization efforts.
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The company anticipates some cost increases due to inflation, salary hikes, and investments in back-office systems and IT architecture.
Q & A Highlights
Q: What have you done with Sweden, and how do you see the market ahead? A: Morten Meier, CEO: We identified challenges in Sweden during the first half and initiated several activities, including refocusing our go-to-market strategy and making minor team adjustments. We also held strategy sessions with our management and board. These efforts have led to a strong turnaround, and we are optimistic about Q4 with a stronger pipeline and more customers, winning new territories in both public and large enterprises.
Q: How should we think about growth through 2025? Will it be more back-end loaded? A: Ellen Solum, CFO: Growth is expected to be back-end loaded, especially from new partner agreements like Sykehuspartner and Tradebroker. While Tradebroker may see more even growth, larger agreements with ICE and devicenow will likely ramp up in the second half of the year.
Q: What is the outlook for cost development next year? A: Ellen Solum, CFO: We have cut costs significantly over the past two years and believe the current cost base is sufficient to scale the business. While we expect some increases due to inflation and salary adjustments, major cost increases are not anticipated. Investments in back-office systems and IT architecture will have some impact, but not substantially.