Netgem overall revenue fell even as its recurring revenue ticked up. The company says the recurring activity has a higher margin than that of the non-recurring, and gross profit grew by 17 per cent while the gross margin increased from 55 per cent in the first half of 2023 to 70 per cent in the first half of 2024.

Mathias Hautefort, CEO of Netgem Group, commented: “In the first half of 2024, we confirmed the improvement of our key financial performance indicators. Our positioning in the ‘Entertainment Technology; market is delivering results and has allowed the Group to diversify with new revenue streams, across telecom operators as well as content publishers.”

Activity and Outlook

In H1 2024, the Group said it focused on innovation, commercial development and winning new customers:

• The Group’s Media services continue their development by carrying out, among other activities, digital services for films such as Dead For A Dollar, Bolero and Cocorico, and are also strengthening their international activity with the delivery of Amazon packages in LatAm.

• The TV subscriber base continues to grow thanks to fibre partners in the UK and will strengthen in the second half of the year with the launch of new alternative operators, notably BRSK (Better TV) and ATI Fibernet (Just TV).

• The Cloud Gaming offering continues to grow with the extension of mobile games in a ‘Super App’ that unifies TV Streaming and Gaming, and the growth of the Bouygues Telecom and zeop subscriber bases.

• Netgem extended the distribution agreements for its aggregation service for telecom operators of FAST channels, FAST Lane, to French-speaking territories (France, Réunion, Switzerland) by relying on the content from its French-speaking and Anglo-Saxon producing partners.

All of these initiatives have enabled the group to confirm its objective of growing recurring revenues and improving its profitability in 2024. The Group is also continuing its CSR policy in 2024, with particular objectives of limiting its carbon impact, improving gender parity and sharing value between the Group’s shareholders and its employees.

Growth of key performance indicators

Recurring revenue in the first half of 2024 stands at €11.7 million (H1 2023: €10.1 million), an increase of 16 per cent compared to the same period in 2023. This increase in recurring revenue did not fully offset the anticipated decrease in non-recurring revenue (disengagement from hardware activities finalised in H1 2024), and consequently total revenue is down 8 per cent to €16.7 million.

Since the recurring activity has a gross margin higher than that of the non-recurring activity, gross profit grew by 17 per cent and the gross margin increased from 55 per cent in the first half of 2023 to 70 per cent in the first half of 2024.

Thanks to the ongoing control of operational costs (which include restructuring costs of €0.2 million in the first half of 2024) associated with the growth in gross profit, this half-year results in EBITDA growing by 5 per cent and amounting to €4 million (S1 2023 : €3.8 million).

Current operating income is also improving and amounts to €0.7 million over the past half-year compared to €0.2 million over the same period in 2023. Finally, the group’s share of net profit, also up, amounts to €0.8 million over the first half of 2024 against (€0.1) million in the first half of 2023.

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Categories: Articles, Business, Results

Tags: cloud, FAST, gaming, netgem