Atea (ATEA) Q3 2024 earnings summary

Executive summary

• Revenue for Q3 2024 reached NOK 8.0 billion, up 3.1% year-over-year, with EBIT at NOK 307 million (+3.0%) and net profit at NOK 192 million (+5.7%).

• Growth was driven by new customer agreements and improved market conditions, especially in Norway, the Baltics, and in PCs, servers/storage, and software.

• Operating cash flow improved significantly to NOK 112 million, up NOK 413 million from Q3 2023.

• A share buyback program for up to 650,000 shares (max NOK 120 million) was announced, supplementing the dividend policy.

• Atea was recognized as one of the world's most sustainable companies in 2024 by TIME and Statista.

Financial highlights

• Gross sales in Q3 were NOK 11.3 billion, up 5.4% year-over-year, with positive currency effects of 4.9%.

• Gross profit increased by 3.3% to NOK 2,357 million; gross margin stable at 29.5%.

• Hardware revenue grew 3.3%, software revenue rose 12.3%, and services revenue increased 1.4% year-over-year.

• Earnings per share for Q3 2024 was NOK 1.72, up from NOK 1.64 in Q3 2023.

• Free cash flow was NOK 25 million, a turnaround from negative NOK 341 million in Q3 2023.

Outlook and guidance

• Management expects higher growth rates in the rest of 2024, with full-year revenue and EBIT surpassing 2023.

• Sales growth is expected to accelerate, supported by new public sector frame agreements and improving economic environment.

• Anticipated drivers include increased public defense spending, IT security investments due to NIS 2 regulation, and a PC refresh cycle from Windows 10 end-of-life.

• Atea Finland anticipates a return to growth after securing a major frame agreement, despite macroeconomic challenges.

• Swedish defense spending impact expected to materialize more significantly in 2025.