Energy One Ltd (ASX:EOL) Full Year 2024 Earnings Call Highlights: Strong Revenue Growth Amidst ...
Revenue Growth: Up 17% overall.
Recurring Revenue Growth: Increased by 19%.
Annual Recurring Revenue (ARR): Up 16%.
Net Debt Reduction: Decreased by 28%.
EBITDA: Flat on an underlying basis.
Profit Before Tax (PBT): Down $1.2 million, a 21% decrease.
Net Profit After Tax: Includes R&D claims worth $300,000 and a $600,000 acquisition-related adjustment.
Revenue Increase (Half-on-Half): Up $2 million, an 8% increase.
Expenses Reduction: Down by $1.3 million.
Statutory Profit Before Tax (Half-on-Half): Up by $3.3 million.
Operating Cash Flow: Remained strong, with higher finance costs offset by lower tax payments.
Customer Base Growth: Increased by 37 customers, with an addition of 50 customers and a loss of 22.
Average ARR per Customer: Approximately $150,000.
Customer Attrition Rate: 3.5%.
Retention Rate: 108%.
LTV-CAC Improvement: Improved against 2022, indicating reduced cost of acquisition per account.
Release Date: August 21, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Energy One Ltd (ASX:EOL) reported strong organic revenue growth of 17% and an increase in annual recurring revenue (ARR) by 16%.
The company successfully reduced its net debt by 28%, aided by an equity raise.
All business line operations are profitable, with a focus on increased profitability and margin growth for FY '25.
The company has a diversified revenue base and a large total addressable market (TAM), providing opportunities for future growth.
Energy One Ltd (ASX:EOL) has expanded its geographic revenue distribution, with 54% of revenue now coming from Europe, compared to 100% from Australia a few years ago.
Negative Points
The company's EBITDA was flat on an underlying basis due to increased investment in staffing.
Profit before tax (PBT) decreased by $1.2 million, or 21%, due to factors including increased interest payments and amortization.
The CQ Advisory risk brokerage revenue was down 47% due to market volatility and temporary closures.
Gross margins have slightly decreased, particularly in the CQ segment, due to increased staffing and compliance costs.
The company experienced a higher attrition rate of 3.5%, which is above their traditional levels.
Q & A Highlights
Q: Can you comment on the gross margin (GM) trends? A: Guy Steel, CFO: The GM has slightly decreased due to increased staffing in trading and compliance, particularly in CQ. We expect margins to improve as the business stabilizes.
Q: Is the second half profitability representative of the run rate profitability? A: Guy Steel, CFO: While we are not offering guidance, the second half performance is a reasonable proxy for future business performance.
Q: What is the impact of increased battery applications on your order book for 2025? A: Shaun Ankers, CEO: Batteries are a hot topic, and we have technology in development to support this trend. We expect to benefit from the tailwind in renewables, including batteries.
Q: How does the growth in energy consumption, particularly from data centers, influence your product development and strategy? A: Shaun Ankers, CEO: The electrification of the market, including data centers, contributes to increased load. We are developing solutions for distributed energy resources and virtual power plants to address this trend.
Q: Can you describe your approach to cyber risk and the timeline for achieving ISO cybersecurity certification? A: Shaun Ankers, CEO: We focus on cybersecurity measures over accreditation. We have a full-time CISO and are investing significantly in this area, aiming for ISO certification as a high priority.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.