Xplora Technologies: Good report, strong line-up for H2 - ABG

19% revenue growth y-o-y, gross profit 21% above Reiterates 2022 target, but sees increased uncertainty Strong roll-out plan for H2 to drive growth

21% gross profit beat driven by a better margin (54%)
Xplora delivered Q2 revenues of NOK 110m, which was 3.5% above the pre-announced revenues of NOK 107m and ABGSC at NOK 103m. This corresponds to a growth of 19% y-o-y and 50% q-o-q. Recurring service revenues amounted to NOK 35m (+44% y-o-y), as pre-announced. Gross profit came in at NOK 60m, 21% above ABGSC at NOK 50m. This corresponds to a gross margin of 54% vs. ABGSC at 48%. Opex was NOK 60m, slightly higher than our estimate of NOK 56m, but due to the strong GP beat, the EBITDA was still much better than we had assumed at NOK 0.5m, vs. our estimate of NOK -6m. FCF was NOK -52m vs. our estimate of NOK -41m, which was driven by working capital build-up (inventory build ahead of the important H2 season). At the end of Q2, the cash position was NOK 81m. On top of this comes NOK 16.5m in cash from subscription rights exercised after the quarters end.

Reiterates 2022 target despite delayed product launches Xplora reiterates its 2022 target of +50% growth, but sees increased uncertainty around this target due to “an increase in external risk factors and weakening consumer sentiment”. Xplora’s planned product launches for H2 has been slightly delayed, but are still targeted for H2. This is important as product launches are a key driver of sales growth. XGO3 was launched in July/August, while X6 and X6 Pro will be launched later this year. On top of this comes a significant roll-out of connectivity services in, Germany, UK (launched late Q2), France and the US.

H2 will likely see higher growth Xplora has also signed several new distribution agreements which should begin to contribute from H2, among other with the largest telco in the UK, EE. It has also begun to sell its watches online through Wal-Mart, Target and Best Buy in the US. Although we have a cautious view on consumer ... Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/xplora-technologies/Equity-research/2022/8/xplora-technologies---good-report-strong-line-up-for-h2/