Mr. Andrew Caprara reports
SOFTCHOICE ANNOUNCES THIRD QUARTER 2024 RESULTS
Softchoice Corp. has released its financial results for the third quarter ended Sept. 30, 2024. Softchoice will hold a conference call/webcast to discuss its results today, Nov. 8, 2024, at 8:30 a.m. ET. Unless otherwise noted, all dollar amounts are in U.S. dollars.
Quarterly highlights:
-
Gross profit increased by 8.9 per cent year over year, or 9.6 per cent in constant currency, including double-digit growth in software and cloud and services:
-
Gross profit growth was driven by a combination of 4.3-per-cent year-over-year customer growth and expanded margin per customer, including increased revenue retention from existing customers, supported by a 7-per-cent increase in the company's technical expert team members.
-
The continued increase in customers in 2024 has enabled an 18-per-cent year-over-year increase in the company's front line sales force, a facilitator of future growth.
-
Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) increased by 2.2 per cent to $23.2-million as gross profit growth more than offset higher variable compensation and strategic growth investments, including an expanded sales force and technical expert team members.
-
Income from operations decreased by 1.6 per cent despite the growth in adjusted EBITDA, primarily driven by an increase in equity-settled share-based compensation.
-
Adjusted EPS (earnings per share) on a diluted basis was 18 cents, compared with 23 cents in Q3 2023, with the increase in adjusted EBITDA offset by higher tax and financial expenses; net income per share on a diluted basis was 15 cents compared with 14 cents in Q3 2023.
-
The company was named Cisco Canada's Commercial Impact Partner of the Year, recognizing Softchoice as a top-performing partner for commercial customers across Canada.
- The company
launched SAM+ Hub, a new self-serve centralized and intelligent subscription software management tool for customers. This digital tool is part of the previously announced launch of SAM+, a suite of software asset management solutions and services to efficiently manage the complexities of subscription-based licensing.
Andrew Caprara, Softchoice's chief executive officer, said: "We're pleased to report that we again delivered industry-leading organic growth in the third quarter, including double-digit increases in strategic focus areas. Our strategic growth investments and expanded front line sales force and technical experts, combined with our growing importance to vendors, is accelerating customer growth and increasing customer margins.
"With the successful launch of our internally developed SAM+ Hub portal, more than a thousand customers are already actively using it to optimize their software spend. This tool differentiates us in the market by providing an unmatched level of insight into a customer's software and cloud environment, enabling us to consolidate management of more of our customer's software titles and serving as a customer acquisition channel."
Dividend update
On Nov. 7, 2024, the board declared a quarterly dividend of 13 Canadian cents per common share for the period from Oct. 1, 2024, to Dec. 31, 2024, to be paid on Jan. 10, 2025, to shareholders of record at the close of business on Dec. 31, 2024, representing an approximately 18-per-cent increase over Q4 2023. The dividend to which this notice relates is an eligible dividend for tax purposes.
Supplementary measures for the trailing-12-month period ended Sept. 30, 2024:
-
Gross profit increased by 6 per cent to $342.2-million in the trailing 12 months ended Sept. 30, 2024, reflecting a similar increase in gross Sales, driven by a 12-per-cent increase in software and cloud, partially offset by a 6-per-cent decline in hardware stemming from industrywide weakness. In constant currency, gross profit grew by 8 per cent. Gross profit was driven by a combination of increased customers and higher gross profit per customer:
-
Gross profit per customer increased to $69,000 in the trailing 12 months ended Sept. 30, 2024. Revenue retention rate was 105 per cent due to increased customer retention and software and cloud and services gross sales offsetting a decline in hardware gross sales primarily due to prevailing industrywide weakness.
-
Average trailing-12-month customers increased approximately 5 per cent to 4,945 from 4,715 in the prior trailing-12-month period.
-
Average trailing-12-month account executives were 497, a 10-per-cent increase over the prior trailing-12-month period.
-
Adjusted EBITDA increased by 3 per cent to $96-million, or 28.1 per cent of gross profit.
-
Net cash from operating activities increased 2 per cent to $98-million due to an increase in working capital inflow offsetting higher taxes and interest paid. Free cash flow, which excludes the impact of working capital changes, decreased to $33-million from $62-million in the prior trailing-12-month period with the increase in adjusted EBITDA more than offset by an increase in cash taxes, operating expenses and interest.
Quarterly conference call
Softchoice's management team will hold a conference call to discuss its Q3 2024 results.
Date: Friday, Nov. 8, 2024
Time: 8:30 a.m. Eastern Time
A link to the webcast will also be available on the events page of the investors section of Softchoice's website. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. An archived replay of the webcast will be available for 90 days.
Dial in: To join the conference call without operator assistance, you may register and enter your phone number on-line to receive an instant automated callback. You can also dial direct to be entered to the call by an operator: 1-437-900-0527 or 1-888-510-2154.
Taped replay: 1-289-819-1450 or 1-888-660-6345
Replay code: 44176 followed by the number sign
The replay will be available until Nov. 15, 2024.
About Softchoice
Corp.
Softchoice is a software-focused and cloud-focused IT (information technology) solutions provider that equips organizations to be agile, innovative and secure and people to be engaged, connected and creative at work. The company does this by delivering secure, AI-powered (artificial intelligence) cloud and digital workplace solutions supported by its advanced software asset management methodology and capabilities. Through the company's ROI (return on investment) customer success framework, Softchoice creates value for its customers by reducing their IT spending, optimizing their technology and supporting business-driven innovation. Softchoice is a highly engaged, high-performing team that is welcoming, inclusive and diverse in thought and experience; and it is a certified Great Place to Work in Canada and the United States.
We seek Safe Harbor.
© 2025 Canjex Publishing Ltd. All rights reserved.