ZetaDisplay AB (publ), a European provider of digital signage solutions, has released its financial results for the first half of 2024, covering the period from January 1 to June 30 2024. The company reported a solid increase in net sales, largely driven by the growth of its Software as a Service (SaaS) offerings and the successful integration of recent acquisitions.
Key Financial Highlights
- Net Sales: ZetaDisplay’s net sales increased by 17.5% to SEK 290.5 million, compared to SEK 246.5 million in the first half of 2023.
- SaaS Revenue: SaaS revenue grew by 23.2%, reaching SEK 127.8 million, up from SEK 103.7 million in H1 2023. Organic SaaS revenue growth (excluding acquisitions) was 9.0%.
- Gross Margin: The gross margin decreased to 57.5%, down from 60.8% in H1 2023, reflecting the integration of recently acquired businesses.
- Adjusted EBITDA: Adjusted EBITDA rose to SEK 40.7 million, with an adjusted EBITDA margin of 14.0%, up from 10.3% in H1 2023.
- Operating Loss: The company recorded an operating loss of SEK 23.4 million, compared to a loss of SEK 12.5 million in H1 2023.
- Net Debt: As of June 30, 2024, net debt stood at SEK 346.2 million, impacted by acquisitions and ongoing investments.
Strategic Developments and Operations
Acquisitions Contributing to Growth
ZetaDisplay’s performance in the first half of 2024 was significantly influenced by its strategic acquisitions:
- PeakMedia Digital Signage GmbH: Acquired in late 2023, PeakMedia has been integrated into ZetaDisplay’s operations, contributing positively to overall performance.
- Beyond Digital Solutions Ltd: Acquired in April 2024, this UK-based company has expanded ZetaDisplay’s presence in one of Europe’s key digital signage markets.
SaaS Revenue Expansion
SaaS revenue, a key component of ZetaDisplay’s growth strategy, now accounts for 44.0% of total sales. The 23.2% increase in SaaS revenue reflects the company’s focus on building a stable and predictable revenue stream through recurring services.
Major Contract Secured
In July 2024, ZetaDisplay secured a multi-year framework agreement with A-Train/Arlanda Express. This contract involves the development and deployment of a digital signage network, including 250 new installations, further strengthening ZetaDisplay’s position in the European market.
Financial Analysis
Revenue Growth and Market Expansion
ZetaDisplay’s 17.5% increase in net sales during H1 2024 underscores the effectiveness of its growth strategy, which combines organic expansion with strategic acquisitions. The successful integration of PeakMedia and Beyond Digital Solutions has not only expanded ZetaDisplay’s market reach but also diversified its service offerings.
Margin Trends and Profitability
The decrease in gross margin to 57.5% reflects the impact of integrating newly acquired businesses with initially lower margins. However, the improvement in adjusted EBITDA margin to 14.0% demonstrates effective cost management and operational efficiency, positioning the company for sustainable growth.
Financial Position and Debt Management
The increase in net debt to SEK 346.2 million is associated with ZetaDisplay’s strategic acquisitions and ongoing investments. Managing this debt while continuing to improve operational performance will be key to supporting future growth. The equity ratio of 25.5% highlights the company’s need to maintain financial flexibility as it pursues its strategic goals.
About ZetaDisplay AB
For more information, visit www.ir.zetadisplay.com
