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Jun 30, 2024
Xbp Europe Holdings Q2 2024 Earnings Report
Revenue decreased due to a large one-time license sale in Q2 2023, completion of projects, lower volumes, and client contract ends, offset by new business. Gross margin and Adjusted EBITDA also declined, while a comprehensive financing transaction was completed with HSBC.
Key Takeaways
XBP Europe Holdings reported a decrease in revenue for Q2 2024, primarily due to a large one-time license sale in the same quarter last year, along with project completions and lower volumes. The company experienced a net loss, a decline in gross margin, and a significant decrease in Adjusted EBITDA. However, they secured a new financing agreement to bolster liquidity and are optimistic about future contract launches.
Revenue decreased by 14.8% year-over-year to $36.1 million.
Gross margin declined by 920 bps year-over-year to 18.4%.
Net loss was $4.7 million, including $0.7 million in FX losses.
Adjusted EBITDA decreased by 92.8% year-over-year to $0.3 million.
Xbp Europe Holdings
Xbp Europe Holdings
Forward Guidance
Company expects to spend approximately $1.5 to $2.5 million on capital expenditures and capitalizable contracts set-up cost over the next 12 months.
Positive Outlook
- Sales funnel is encouraging.
- Ramp-up of large public sector contracts, including HMPO, is expected to launch soon.
- Strategic financing transaction provides ample liquidity.
- Company is optimistic about the rest of 2024.
- Financing agreement with HSBC UK Bank plc to refinance the Company’s UK subsidiary’s existing indebtedness and provide up to $33 million of incremental liquidity
Challenges Ahead
- Revenue declined 14.8% year-over-year.
- Gross margin decreased sequentially and year-over-year.
- Net loss includes FX losses.
- Adjusted EBITDA decreased significantly.
- Lower revenues coupled with unfavorable mix