Interim report, Q2 2024 - Aixia Group AB (publ)
Mölndal 2024-07-12
Group financial overview
| All amounts in TSEK | 2024 | 2023 | 2024 | 2023 | 2023 |
| Group financial overview | Second quarter | Second quarter | Firstquarters | Firstquarters | Full year |
| Net sales | 66 815 | 22 964 | 272 411 | 45 210 | 107 809 |
| EBITDA | 5 270 | -1 234 | 22 215 | -840 | 935 |
| Earnings (EBIT) | 3 868 | -2 235 | 19 294 | -2 785 | -4 047 |
| Earnings after tax | 2 921 | -2 327 | 14 996 | -2 964 | -3 901 |
| Earnings per share after tax (SEK) | 1,85 | -1,48 | 9,52 | -1,88 | -2,48 |
| Number of shares | 1 576 000 | 1 576 000 | 1 576 000 | 1 576 000 | 1 576 000 |
Aixia continues to reap success in the second quarter.
Q2 is another fantastic quarter, where we continue to exceed our goals and achieve incredible growth compared to the same period last year, and Q1, 2024. Excluding the major deal of 175 MSEK we closed in Q1, we achieved a net revenue level of 31 MSEK in Aixia for Q1, which was very good. In Q2 2024, net sales reached 66.8 MSEK, representing an increase of 115%, and compared to the same period last year, net sales rose from 23 MSEK to 66.8 MSEK – a growth of 290%. The cash flow from operating activities is 29.3 MSEK compared to -3.2 MSEK for the same period last year. I summarize it as a very good first half-year for Aixia.
EBITDA amounts to 5,3 MSEK (-1,2 MSEK), speaking to our financial stability and effective strategy, confirming our profitability and the strength of our business model.
The Group’s earnings per share for Q2 2024 amount to 1,85 (-1.48 SEK) for the same period last year.
Annual Recurring Revenue (ARR) from ongoing operations increases by 6% to 7.7 MSEK (compared to 7.2 MSEK for the same period last year).
Cash flow and financial situation:
During the first half of 2024, Aixia has shown significant improvement in cash flow and financial position compared to the same period the previous year. Operating cash flow reached 19.3 MSEK, a substantial increase from -2.8 MSEK for the same period in 2023. After adjustments for non-cash items, operating cash flow amounted to 21.3 MSEK.
Changes in working capital were positive, notably with a reduction in accounts receivable by 9.3 MSEK and a decrease in accounts payable by 3.9 MSEK. This resulted in an operational cash flow of 29.4 MSEK, a marked improvement from -3.2 MSEK during the same period last year.
The total change in cash and cash equivalents during the period was an increase of 23.7 MSEK, resulting in an increase in cash and cash equivalents from 1.3 MSEK at the beginning of the year to 25.0 MSEK by the end of the period. This significant improvement in liquidity reflects the company’s ability to generate cash flow and substantially strengthens its financial position.
This success is driven by our ongoing solution-oriented deals, which have higher revenue per order than historical norms, largely due to an increased proportion of AI-based businesses. We are actively working to improve margins on these solutions. Positive cash flows across all revenue streams also contribute to our
strong performance.
Looking ahead to the remainder of 2024, we do so with a solid foundation of stability and profitability. Our positive earnings before interest, taxes, depreciation, and amortization (EBITDA) of 5.3 MSEK reflects our operational capability to generate sustainable value. We have maintained a highly positive trend even through Q2, underscoring that our business model is performing very well and is well-adapted to the transformative shift where artificial intelligence (AI) plays a central role.
We are eager to drive our growth and strengthen our value-creation processes through additional investments in technology, personnel, and workflows. With a focused and determined perspective, we are ready to continue our growth journey and navigate through 2024 with sustained energy and optimism.
A MESSAGE FROM THE CEO
”Q2 2024 shows remarkable growth and underscores our leading position in AI”
I present our quarterly report for Q2, 2024, with great pleasure. During this period, we have witnessed continued success in our sales and robust growth across all our business segments. This demonstrates that our solutions meet market needs and demand.
For over 17 years, we have been pioneers in innovative technology and digitalization. We were early developers of AI solutions, long before the widespread attention on platforms like OpenAI and ChatGPT. It is this unique combination that sets us apart and positions us as leaders in our field. We are the partner companies turn to ensure their AI journey is secure and to enhance their competitiveness.
We are the company that creates solutions and transforms AI strategies into tangible and effective solutions, whether it involves:
AI Infrastructure
AI as a Service
AI for Industry
Generative AI
Our extensive experience also equips us to handle the growing aftermarket business in AI. Even AI solutions require service and support, operations and hosting, as well as service agreements and monitoring with contingency capabilities. Despite delays in our major delivery in Norway, our consulting business is growing. What continues to surpass all previous levels are our solution deals, which have grown by an impressive 480% compared to the same period last year. This significant increase is largely due to a higher proportion of AI-based solution deals. Overall, this growth translates to an 290% increase in total revenue and an operating profit of 5.3 MSEK, compared to a loss of -1.2 MSEK during the same period last year. This underscores tremendous dedication and confirms that we are strategically well-positioned to achieve our vision.
The market is amid a transformative shift where artificial intelligence (AI) is poised to become a central part of our society. AI holds enormous potential to enhance products, services, work methods, and productivity. For the public sector, AI offers impressive opportunities, yet it is also a necessity to address demographic shifts that will demand new ways of operating in the coming years. In the private sector, there is a clear trend where AI is increasingly adopted across industries.
However, this trend also underscores the need for Sweden to take significant steps to remain competitive and avoid falling behind. We are incredibly optimistic about the future, knowing that we are among the leaders in the field of artificial intelligence (AI).
Our quarterly results underscore a continued strong financial position with increased revenues and improved margins compared to the same period last year. To highlight some specific highlights:
Revenue and Profit
Our revenue for the quarter amounted to 66,8 MSEK, an increase of 290% compared to the same period last year. Our pre-tax profit rose by 427%, reflecting our effective cost management and strong sales growth.
Expansion in the US
I am proud to announce that Aixia has been approved for trading on the OTCQX in the United States of America since June 18, 2024. This opens increased interest from American investors and provides access to the US capital market. We see significant potential to penetrate the US market with our software solution AiQu, which has the potential to become a global product.
AiQu
AiQu is an advanced AI workload management platform developed by Aixia. It optimizes the utilization of resources in artificial intelligence and deep learning projects, prevents resource oversubscription, and autonomously manages workloads. AiQu supports both centralized and edge devices, enabling real-time quality assessment and other applications.
AiQu can be used in various scenarios, including:
- Managing and optimizing GPU-based AI systems
- Performing inference on edge devices like cameras for quality assessment
- Integrating into existing workflows for improved project and time management
- Ensuring security and compliance in AI initiatives by segregating data and resources
Success in AI for the Industry
We take pride in leading the development of vision-based AI in the manufacturing industry. By implementing AI-driven vision systems, we assist companies in automating processes such as quality control and packaging, thereby enhancing production times and product quality.
Aixia also offers innovative solutions in generative AI tailored to meet diverse business needs. Leveraging advanced generative AI technology, we aim to improve efficiency, safety, and quality across these sectors.
By implementing generative AI to automate and optimize workflows, organizations can save both time and resources, enabling faster and more precise decision-making. Our solutions include advanced security features that protect sensitive information, in compliance with GDPR and other data protection regulations, which are crucial for any business handling large amounts of personal data.
Aixia has positioned itself as a pioneer in the AI sector, and our prominent market position is the result of our commitment to offering customized AI solutions tailored to our customers’ specific needs. Our team of experts works closely with our clients to understand their challenges and deliver innovative solutions that enhance their competitiveness.
We strongly believe in creating value through AI. It’s about identifying critical challenges and opportunities within organizations and using AI as part of the solution. This is largely a leadership issue, and it’s important that we not only focus on the problems but also on the opportunities AI presents. Therefore, we have a crucial role not only in identifying solutions that can add value for our customers but also in guiding and leading C-level executives and boards in these companies to start thinking, analyzing, and investing in a completely different way than before. AI can and will fundamentally change many companies, and this work must start now.
In the second half of the year, we will expand our consultancy services in Data Science Professional Services, focusing on GPU-accelerated data science. By leveraging expertise in GPU acceleration and data science, we enhance our ability to assist clients in migrating critical workflows and optimizing models and applications, supporting them at every stage of their GPU journey. This expansion increases our potential to secure new large-scale business across all revenue streams.
Currently, we provide services that span from initial learning to full implementation and scaling, ensuring clients can fully harness the capabilities of GPU technology, driving their success and ours together. Now, we are accelerating even further in alignment with market demands.
Moving forward, we aim to play a leading role in Sweden and its business community. The Swedish AI ecosystem has the potential to address significant societal challenges. We want Sweden and Swedish businesses to actively participate in defining how these solutions should be built from a global perspective, as it will be crucial for shaping our future lives. We have a responsibility to deploy AI where it can make the greatest positive impact on society, and we are ready to shoulder that responsibility.
Looking ahead, we are already sketching out the next step – Hyper digitalization. I will revisit this topic in the future. Remember where you heard it first!
Mattias Bergkvist
CEO, Aixia Group AB (publ)
Significant events Q2 2024
2024-04-17
Aixia Group: Aixia Agrees on Strategic AI Cooperation with 3stepIT for AI-Based Quality Assessment of IT Equipment
Aixia is pleased to announce the launch of a groundbreaking AI solution for the quality assessment of used IT devices, developed in collaboration with 3stepIT, a leading player in circular technology solutions. This innovative solution, which will be put into production in Sweden in May, represents a significant advance in sustainable management of IT equipment.
The solution is based on Aixia's proprietary software, AiQu, and has been meticulously trained by experts from both Aixia and 3stepIT over 18 months using data from over 35,000 devices. It utilizes advanced artificial intelligence to provide unbiased and accurate evaluations of used laptops. The implementation is the first in a larger rollout and marks the launch of AI-based solutions at 3stepIT's centers. The goal is a complete implementation by the end of the year at all 3stepIT's operational facilities for automated lifecycle management of devices and IT equipment to the secondary market.
This collaboration underscores Aixia's commitment to improving sustainability within the tech industry by supporting circular economy methods. The AI tool not only identifies specific damages but also assesses the overall wear and tear, providing a standardized quality assessment that offers businesses a reliable assessment and valuation of the device's condition.
"Our partnership with 3stepIT is based on a shared vision of reducing e-waste and promoting the reuse of IT equipment," says Mattias Bergkvist, CEO of Aixia. "Solutions like this that manage quality will transform the way companies handle automated production."
Jakob Lagander, CEO of 3stepIT, says, “By integrating Aixia's AI expertise with our circular technology model, we can offer even greater value to our customers, ensuring that devices have a longer and more sustainable lifecycle. This is an important step towards more sustainable IT management globally.”
2024-04-22
Aixia Group: Aixia secures a new deal with a new customer in the banking sector.
Today, Aixia has secured a significant deal within a new strategic sector for them: Banking and Finance. The customer, a leading player in the Banking and Finance sector in the Nordics, is investing in advanced network solutions from Aixia. The deal is initially valued at 2.6 million SEK and delivery is expected to take place during Q2.
2024-04-25
Aixia Group: Aixia secures new AI order with existing customer, valued at 18.5 million SEK.
Aixia has secured a new order from an existing customer in the software industry specializing in AI for the automotive sector. The customer is investing in a new, comprehensive data security solution. The initial value of the deal is 18.5 million Swedish kronor, and the solution will be delivered in the second quarter of 2024.
2024-06-18
Aixia Group: Aixia Group AB (publ)'s share approved for trading on the OTCQX
Aixia Group AB ("Aixia") has been approved to take up share trading on trading platform OTCQX in the USA, trading in the share on OTCQX starts on June 18 2024.
OTCQX is a US-based securities trading platform operated by OTC Markets Group
which are not listed on a national stock exchange. The purpose of taking up trading on the OTCQX is to cater to an increasing interest from American investors and to increase accessibility to the US capital market. Aixia's shares will be traded on the OTCQX
ticker “AIXAF”. US investors can now find up-to-date financial information and
real-time level 2 information for stock trading in the Aixia stock at www.otcmarkets.com.
In a comment, Aixia's CEO, Mattias Bergkvist, says:
“We are seeing increasing interest in Aixia from North American investors and are excited about now giving these investors the opportunity to trade in the share. Through OTCQX facilitates we for international investors and institutions considering having an exposure to our shares. The fact that the share is traded on OTCQX also opens up opportunities for Aixia to present in capital markets in the United States.”
About OTC Markets Group Inc.
OTC Markets Group Inc. (OTCQX: OTCM) operates regulated markets for trading with 12,000 US and international securities. Our data-driven standards for
disclosure forms the basis of our three public markets: OTCQX(R) Best Market,
OTCQB(R) Venture Market and Pink(R) Open Market. Our OTC Link(R) Alternatives
trading systems (ATS) provide critical market infrastructure such as brokers and
distributors rely on to facilitate trade. Our innovative model makes companies more efficient access to the US financial markets. OTC Link ATS, OTC Link ECN and OTC Link
NQB is each an SEC-regulated ATS, operated by OTC Link LLC, a FINRA and SEC-registered broker-dealer, member SIPC.
B. Riley Securities acted during the process as Aixia's OTCQX sponsor.
2024-06-20
Aixia Receives Significant Order for Advanced Data Center Solution for AI from Leading Software Company in the Automotive Sector
Aixia AB, a leading player in advanced AI/IT solutions, announced today that the company has received a new significant order from an existing customer, a prominent company in software development in the automotive sector. The customer is investing in an advanced data center solution for artificial intelligence (AI). The initial order value is SEK 19.1 million, and the solution delivery is planned for the first quarter of 2025.
This comprehensive solution is designed to meet the high-performance demands required for modern AI applications in the automotive industry, representing an important step forward for both the customer and Aixia.
This information is information that Aixia Group AB (publ) is required to make public pursuant to the EU Market Abuse Regulation. The information was provided by the above contact, for publication 2024-07-12.
For more informtion:
Get in touch with the company at:
CEO Mattias Bergkvist
Phone: 031-762 02 40
[email protected]
www.aixia.se
Aixia Group AB (publ)
Taljegårdsgatan 11
431 53 Mölndal