Omda (OMDA) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue was NOK 104.5 million, flat year-over-year, with 5.4% organic growth and 7.3% over the last four quarters, in line with the 5–10% target range.

• 83% of income came from license sales and recurring revenue, with recurring revenues at NOK 332 million annual run rate and low churn from over 600 contracts across 27 countries.

• EBITDA margin was 10% for Q2 2024, unchanged year-over-year, and below internal targets due to high personnel costs and weak professional services.

• Strategic divestment of the Philippines operations (50 employees) to improve efficiency and reduce personnel costs, with transaction expected to close in H2 2024.

• Achieved MDR (Medical Device Regulation) certification, a key regulatory milestone for product quality and growth potential.

Financial highlights

• Recurring revenue reached NOK 83 million in Q2 2024, with annualized recurring revenue at NOK 332 million and 7% growth over the last four quarters.

• COGS improved year-over-year, moving toward the 5% target, with gross margin rising to 93% from 91% in Q2 2023.

• Salary costs increased to 66.5% of total income, up from 64.5% year-over-year, while other costs slightly decreased to 16.1%.

• CapEx was NOK 10 million (~10% of sales), mainly for R&D and a one-time server infrastructure investment.

• Net working capital improved for the fourth consecutive quarter, now at -15% of sales, exceeding the -10% target.

Outlook and guidance

• Organic growth forecast remains at 5–10% annually long term, with gradual improvement in EBITDA margin expected as cost-saving and productivity initiatives take effect.

• Salary and personnel costs targeted to return to around 50% of revenue over time.

• Professional services productivity expected to improve in the second half of the year.

• Continued focus on organic growth, cash flow, and selective M&A opportunities.