Technology

Enghouse Releases Second Quarter Results

Published

5 months ago

June 10, 2024

MARKHAM, ON, June 10, 2024 /CNW/ – Enghouse Systems Limited (TSX: ENGH) announces second quarter (unaudited) financial results for the period ended April 30, 2024. All figures are denominated in Canadian dollars unless otherwise indicated.

Highlights for the Second Quarter ended April 30, 2024 compared to the same quarter in the prior year:

Revenue increased 10.9% to $125.8 million.Recurring revenue, which includes SaaS and maintenance services, grew 18.6% to $85.0 million, and represents 67.5% of total revenue.Operating profits increased 30.5% to $33.5 million, while achieving a 28.4% EBITDA margin.

Financial results for the three and six months ended April 30, 2024, compared to the three and six months ended April 30, 2023, are as follows:

Revenue increased to $125.8 and $246.3 million, respectively, compared to revenue of $113.5 and $219.9 million;Results from operating activities was $33.5 and $66.1 million, respectively, compared to $25.6 and $55.5 million;Net income was $20.0 and $38.1 million, respectively, compared to $12.5 and $29.6 million;Adjusted EBITDA was $35.7 and $70.4 million, respectively, compared to $30.2 and $62.5 million;Cash flow from operating activities, excluding changes in working capital, was $38.6 and $74.2 million, respectively, compared to $28.9 and $61.5 million resulting in record cash and cash equivalents of $263.8 million.

Our strong performance this quarter is demonstrated by double-digit growth in revenue, profitability and operating cash flows. Our proficiency in executing and integrating acquisitions continues to be a crucial profit growth driver. This quarter we completed the acquisition of Mediasite, which expanded our video technology into the education and event market and increased our presence in Japan.

Our business model continues to prioritize operational discipline as the demand for SaaS increases. Operational expenditures have shown improvement when compared to revenue both for the quarter and period to date, despite inflationary pressures and integrating acquisitions. Continued discipline in our business activities has increased our cash and cash equivalents to the record level of $263.8 million, with no external debt, while increasing our dividend, repurchasing shares, and completing and integrating the Mediasite acquisition in the quarter.

Subsequent to quarter-end on May 9, 2024, Enghouse completed its acquisition of substantially all of the assets of SeaChange International, Inc. (“SeaChange”) related to its IPTV products and services business, for a net purchase price of approximately US$23 million. This acquisition increases the scale of our IPTV business, augments our product offering and furthers our expansion into the European market. SeaChange will be integrated within the Asset Management Group from the date of acquisition.

Quarterly dividends:

Today, the Board of Directors approved the Company’s eligible quarterly dividend of $0.26 per common share payable on August 30, 2024 to shareholders of record at the close of business on August 16, 2024.

Enghouse Systems Limited

Financial Highlights
(unaudited, in thousands of Canadian dollars)

For the period ended April 30

Three months

Six months

2024

2023

Var ($)

Var (%)

2024

2023

Var ($)

Var (%)

Revenue

125,813

113,461

12,352

10.9

246,302

219,896

26,406

12.0

Direct costs

43,201

38,106

5,095

13.4

84,783

72,914

11,869

16.3

Revenue, net of direct costs

82,612

75,355

7,257

9.6

161,519

146,982

14,537

9.9

As a % of revenue

65.7 %

66.4 %

65.6 %

66.8 %

Operating expenses

49,031

47,712

1,319

2.8

95,211

89,422

5,789

6.5

Special charges

106

2,001

(1,895)

(94.7)

197

2,029

(1,832)

(90.3)

Results from operating activities

33,475

25,642

7,833

30.5

66,111

55,531

10,580

19.1

As a % of revenue

26.6 %

22.6 %

26.8 %

25.3 %

Amortization of acquired software and
customer relationships

(11,146)

(9,838)

(1,308)

(13.3)

(21,520)

(18,670)

(2,850)

(15.3)

Foreign exchange losses

(86)

(790)

704

89.1

(1,803)

(1,843)

2.2

Interest expense – lease obligations

(148)

(192)

22.9

(298)

(359)

17.0

Finance income

2,602

1,006

1,596

158.6

4,963

1,982

2,981

150.4

Finance expenses

(12)

(124)

112

90.3

(12)

(131)

119

90.8

Other income (expenses)

220

( 528)

748

141.7

106

(655)

761

116.2

Income before income taxes

24,905

15,176

9,729

64.1

47,547

35,855

11,692

32.6

Provision for income taxes

4,931

2,640

2,291

86.8

9,440

6,296

3,144

49.9

Net Income for the period

19,974

12,536

7,438

59.3

38,107

29,559

8,548

28.9

Basic earnings per share

0.36

0.23

0.13

56.5

0.69

0.53

0.16

30.2

Diluted earnings per share

0.36

0.23

0.13

56.5

0.69

0.53

0.16

30.2

Operating cash flows

40,256

18,698

21,558

115.3

60,155

47,960

12,195

25.4

Operating cash flows excluding changes
in working capital

38,613

28,875

9,738

33.7

74,170

61,507

12,663

20.6

Adjusted EBITDA

Results from operating activities

33,475

25,642

7,833

30.5

66,111

55,531

10,580

19.1

Depreciation

551

613

(62)

10.1

1,045

1,239

(194)

15.7

Depreciation of right-of-use assets

1,570

1,931

(361)

18.7

3,076

3,667

(591)

16.1

Special charges

106

2,001

(1,895)

94.7

197

2,029

(1,832)

90.3

Adjusted EBITDA

35,702

30,187

5,515

18.3

70,429

62,466

7,963

12.7

Adjusted EBITDA margin

28.4 %

26.6 %

28.6 %

28.4 %

Adjusted EBITDA per diluted share

0.64

0.54

0.10

18.5

1.27

1.13

0.14

12.4

Condensed Consolidated Interim Statements of Financial Position

(in thousands of Canadian dollars)

(unaudited)

As at April 30,
2024

As at October 31,
2023

ASSETS

Current assets:

Cash and cash equivalents

262,918

239,532

Short-term investments

854

827

Accounts receivable

110,965

93,383

Prepaid expenses and other assets

17,369

15,515

Income taxes recoverable

–

114

392,106

349,371

Non-current assets:

Property and equipment

3,328

3,273

Right-of-use assets

9,966

12,242

Intangible assets

98,253

109,659

Goodwill

292,990

280,241

Deferred income tax assets

25,422

28,884

429,959

434,299

822,065

783,670

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable and accrued liabilities

70,229

67,769

Income tax payable

1,500

–

Dividends payable

14,398

12,156

Provisions

1,420

2,238

Deferred revenue

130,273

109,019

Lease obligations

5,733

6,322

223,553

197,504

Non-current liabilities:

Income taxes payable

–

1,333

Deferred income tax liabilities

11,897

13,340

Deferred revenue

7,752

8,170

Net employee defined-benefit obligation

1,922

1,912

Lease obligations

4,337

6,080

25,908

30,835

249,461

228,339

Shareholders’ equity:

Share capital

113,237

107,701

Contributed surplus

10,252

10,404

Retained earnings

436,848

426,397

Accumulated other comprehensive income

12,267

10,829

572,604

555,331

822,065

783,670

Condensed Consolidated Interim Statements of Operations and Comprehensive Income

(in thousands of Canadian dollars, except per share amounts)

(unaudited)

Three months

Six months

Periods ended April 30

2024

2023

2024

2023

Revenue

Software licenses

$ 20,492

$ 22,016

$ 37,467

$ 42,751

SaaS and maintenance services

84,984

71,634

169,571

138,137

Professional services

17,401

17,995

33,346

34,886

Hardware

2,936

1,816

5,918

4,122

125,813

113,461

246,302

219,896

Direct costs

Software licenses

741

698

1,415

1,568

Services

40,951

36,793

80,482

69,218

Hardware

1,509

615

2,886

2,128

43,201

38,106

84,783

72,914

Revenue, net of direct costs

82,612

75,355

161,519

146,982

Operating expenses

Selling, general and administrative

24,812

23,935

47,681

44,733

Research and development

22,098

21,233

43,409

39,783

Depreciation

551

613

1,045

1,239

Depreciation of right-of-use assets

1,570

1,931

3,076

3,667

Special charges

106

2,001

197

2,029

49,137

49,713

95,408

91,451

Results from operating activities

33,475

25,642

66,111

55,531

Amortization of acquired software and customer relationships

(11,146)

(9,838)

(21,520)

(18,670)

Foreign exchange losses

(86)

(790)

(1,803)

(1,843)

Interest expense – lease obligations

(148)

(192)

(298)

(359)

Finance income

2,602

1,006

4,963

1,982

Finance expenses

(12)

(124)

(12)

(131)

Other income (expenses)

220

(528)

106

( 655)

Income before income taxes

24,905

15,176

47,547

35,855

Provision for income taxes

4,931

2,640

9,440

6,296

Net income for the period

19,974

12,536

38,107

29,559

Item that may be subsequently reclassified to income:

Cumulative translation adjustment

9,455

11,295

1,438

21,038

Other comprehensive income

9,455

11,295

1,438

21,038

Comprehensive income

$ 29,429

$ 23,831

$ 39,545

$ 50,597

Earnings per share

Basic

$ 0.36

$ 0.23

$ 0.69

$ 0.53

Diluted

$ 0.36

$ 0.23

$ 0.69

$ 0.53

Condensed Consolidated Interim Statements of Cash Flows

(in thousands of Canadian dollars)

(unaudited)

Three months

Six months

Periods ended April 30

2024

2023

2024

2023

OPERATING ACTIVITIES

Net income for the period

$ 19,974

$ 12,536

$ 38,107

$ 29,559

Adjustments for non-cash items

Depreciation

551

613

1,045

1,239

Depreciation of right-of-use assets

1,570

1,931

3,076

3,667

Interest expense – lease obligations

148

192

298

359

Amortization of acquired software and customer relationships

11,146

9,838

21,520

18,670

Stock-based compensation expense

501

473

778

931

Provision for income taxes

4,931

2,640

9,440

6,296

Finance expenses and other (income) expenses

(208)

652

(94)

786

38,613

28,875

74,170

61,507

Changes in non-cash operating working capital

6,651

(5,989)

(6,489)

(3,987)

Income taxes paid

(5,008)

(4,188)

(7,526)

(9,560)

Net cash provided by operating activities

40,256

18,698

60,155

47,960

INVESTING ACTIVITIES

Net purchase of property and equipment

(418)

(66)

(778)

(171)

Acquisitions, net of cash acquired*

(12,594)

(25,617)

(12,594)

(25,617)

Purchase consideration for prior-year acquisition

–

233

171

233

Purchase of short-term investments

–

(69)

Net cash used in investing activities

(13,012)

(25,450)

(13,201)

(25,624)

FINANCING ACTIVITIES

Issuance of share capital

373

–

4,683

604

Normal course issuer bid share repurchases

(1,147)

–

(1,147)

Repayment of lease obligations

(1,798)

(2,470)

(3,400)

(4,280)

Dividends paid

(12,188)

(10,225)

(24,344)

(20,446)

Net cash used in financing activities

(14,760)

(12,695)

(24,208)

(24,122)

Impact of foreign exchange on cash and cash equivalents

3,682

3,797

640

8,833

Increase (decrease) in cash and cash equivalents

16,166

(15,650)

23,386

7,047

Cash and cash equivalents – beginning of period

246,752

247,801

239,532

225,104

Cash and cash equivalents – end of period

$ 262,918

$ 232,151

$ 262,918

$ 232,151

* Acquisitions are net of cash acquired of $497 for the three and six months ended April 30, 2024 and $2,088 for the three and six months ended April 30, 2023, respectively.

Enghouse Systems Limited
Segment Reporting Information
(in thousands of Canadian dollars)

Three months ended April 30

2024

2023

IMG

AMG

Total

IMG

AMG

Total

Revenue

80,530

45,283

125,813

64,578

48,883

113,461

Direct costs

(26,573)

(16,628)

(43,201)

(19,133)

(18,973)

(38,106)

Revenue, net of direct costs

53,957

28,655

82,612

45,445

29,910

75,355

Operating expenses excluding special charges

(23,483)

(11,751)

(35,234)

(23,034)

(12,596)

(35,630)

Depreciation

(392)

(159)

(551)

(544)

(69)

(613)

Depreciation of right-of-use assets

(997)

(573)

(1,570)

(941)

(990)

(1,931)

Segment profit

29,085

16,172

45,257

20,926

16,255

37,181

Special charges

(106)

(2,001)

Corporate and shared service expenses

(11,676)

(9,538)

Results from operating activities

33,475

25,642

Six months ended April 30

2024

2023

IMG

AMG

Total

IMG

AMG

Total

Revenue

156,666

89,636

246,302

122,431

97,465

219,896

Direct costs

(51,979)

(32,804)

(84,783)

(35,564)

(37,350)

(72,914)

Revenue, net of direct costs

104,687

56,832

161,519

86,867

60,115

146,982

Operating expenses excluding special charges

(44,909)

(23,447)

(68,356)

(42,285)

(23,916)

(66,201)

Depreciation

(769)

(276)

(1,045)

(1,081)

(158)

(1,239)

Depreciation of right-of-use assets

(1,933)

(1,143)

(3,076)

(2,041)

(1,626)

(3,667)

Segment profit

57,076

31,966

89,042

41,460

34,415

75,875

Special charges

(197)

(2,029)

Corporate and shared service expenses

(22,734)

(18,315)

Results from operating activities

66,111

55,531

About Enghouse

Enghouse is a Canadian publicly traded company (TSX:ENGH) that provides mission-critical vertically focused enterprise software solutions. Our core technologies are used for contact centers, video communications, virtual healthcare, telecommunications networks, public safety and the transit market. The Company’s two-pronged growth strategy to grow earnings focuses on organic growth and acquisitions, which, to date, have been funded through operating cash flows as the Company has no outstanding external debt financing. The Company is organized around two business segments, the Interactive Management Group (“IMG”) and the Asset Management Group (“AMG”) due to their unique customer segments and technology offerings. Further information about Enghouse may be obtained from the Company’s website at www.enghouse.com.

Conference Call and Webcast

A conference call to discuss the results will be held on Tuesday, June 11, 2024 at 8:45 a.m. EST. To participate, please call
+1-289-514-5100 or North American Toll-Free +1-800-717-1738. Confirmation code: 14684. A webcast is also available at: https://www.enghouse.com/investors.php.

The Company uses non-IFRS measures to assess its operating performance. Securities regulations require that companies caution readers that earnings and other measures adjusted to a basis other than IFRS do not have standardized meanings and are unlikely to be comparable to similar measures used by other companies. Accordingly, they should not be considered in isolation. The Company uses Adjusted EBITDA as a measure of operating performance. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Adjusted EBITDA is calculated based on results from operating activities adjusted for depreciation of property and equipment and right-of-use assets, and special charges for acquisition related restructuring costs. Management uses Adjusted EBITDA to evaluate operating performance as it excludes amortization of software and intangibles (which is an accounting allocation of the cost of software and intangible assets arising on acquisition), any impact of finance and tax related activities, asset depreciation, foreign exchange gains and losses, other income and restructuring costs primarily related to acquisitions.

SOURCE Enghouse Systems Limited

Technology

Avathon Partners with CP PLUS, Largest CCTV Manufacturer in India, to Enhance Public Safety while Strengthening Community Bonds

Published

23 minutes ago

November 14, 2024

PLEASANTON, Calif., Nov. 13, 2024 /PRNewswire/ — Avathon, provider of the leading AI platform for industrial operations, has partnered with CP PLUS, one of the largest manufacturers of CCTV cameras, to create safer, more connected societies by bundling Avathon’s computer vision technology with each camera. The companies are bringing Avathon’s computer vision AI capabilities to small and medium-sized businesses (SMBs) across India, turning their cameras into intelligent assets that enable more secure workplaces, factories and facilities.

In today’s fast-paced world, it’s hard to keep an eye on every single detail, every minute of the day. Computer vision AI technology gives users the freedom and control to go about their daily lives knowing they will receive proactive alerts identifying safety and security issues in real time.

“Increasing demand for advanced public safety tools, smart home devices and integrated AI-powered cameras is fueling massive industry growth,” said Aditya Khemka, Managing Director, CP PLUS, a subsidiary of Aditya Group. “Our partnership with Avathon will help us to better deliver state-of-the-art AI-powered solutions that feature advanced functions like real-time anomaly detection and intelligent monitoring.”

Avathon’s computer vision AI automatically detects and alerts unsafe conditions and incidents in real time, allowing users to proactively take the right actions. Avathon enables business owners using valuable resources to monitor CCTV camera feeds to get back to focusing on operations. The company partners with OEM camera manufacturers by providing AI technology that enables end customers to quickly and accurately address processes, behaviors, and conditions that cause unacceptable risk. Through its partnership with CP PLUS, Avathon has democratized this technology, giving access to large organizations and small businesses alike.

CP PLUS is India’s leading surveillance brand with the most extensive portfolio in the entire global industry. Representing a major share of the Indian CCTV market, CP PLUS offers a range of products and services to meet the varied needs of government, commercial, residential, and industrial customers and its products are successfully deployed in every nook and corner of India and many countries across verticals and industry.

“AI cameras are paving the path forward in India toward smart-city initiatives and enhanced public safety improvements. In this sometimes disconnected world, it’s comforting to rely on a technology that instantly alerts users to potential dangers and other anomalies,” said Pervinder Johar, CEO of Avathon. “We’re proud to partner with CP PLUS to provide the AI innovations needed to push India to the leading edge of technological advancement.”

About Avathon

Avathon, a leader in Industrial AI, extends the life of critical infrastructure while advancing the journey toward full autonomy. Avathon’s Industrial AI platform empowers commercial and government customers with scalable, secure, and value-driven solutions that enhance efficiency and resilience across heavy industry.

Media contact:

Jon Ross
Sr. PR & Communications Manager
Avathon
jross@avathon.com

View original content:https://www.prnewswire.com/news-releases/avathon-partners-with-cp-plus-largest-cctv-manufacturer-in-india-to-enhance-public-safety-while-strengthening-community-bonds-302304865.html

SOURCE Avathon

Technology

Belgian Unicorn Odoo Celebrates Remarkable First Anniversary in Indonesia

Published

23 minutes ago

November 14, 2024

JAKARTA, Indonesia, Nov. 14, 2024 /PRNewswire/ — This November, Belgian business management software company Odoo celebrates 1st anniversary of the Indonesian office with esteemed partners and customers like Ismaya, Pertamina Energy Terminal, DORÉ, Dekoruma, Abuba Steak, Perum Bulog and Arista Group, to name a few.

With a mission to help more businesses to become digitally organized, the software company started actively developing the Indonesian market five years ago and has reached record-breaking milestones one after another—91.2% average annual growth and a quadrupled 189 active local partners—making Indonesia the best-performing market in APAC for six consecutive years.

The now locally based Odoo Indonesia is confident in extending services and helping businesses of all sizes in the country to digitally transform business management to contribute to optimized workflow efficiency and national economic growth.

To support rapid market expansion, Odoo will base its operations in BSD as the area embodies the start-up environment the Belgian firm always strives for—vibrant & dynamic—a choice affirmed by its sustained success in digital transformation endeavors across Indonesia.

Odoo opens first SEA office in BSD.

From a squad of 3, Odoo Indonesia has expanded into an over 80-strong team. In 2024, it engaged the community at 41 events in major cities, including Medan, Bandung, Surabaya, and Makassar, and around the archipelago in Java, Sumatra, Kalimantan, and Sulawesi, providing countless on-site support. Within a year of opening, the company introduced multiple landmark integrations and regionalized upgrades.

Odoo-Xendit Integration

Integration with Indonesian-based payment solution provider Xendit is made standard in Odoo to facilitate effortless transactions in Indonesia and across Southeast Asia through QRIS, e-Wallets, convenience stores, and other major payment methods in the region.

e-Faktur Submission

To support the Tax Office e-Faktur application, Odoo now collects necessary data to automate documents to assist users in completing the submission process in compliance with local regulations and is in the last stages of integrating with Pajak.io for direct submission from Odoo.

QRIS Features

The team introduced QRIS into the system to maximize ways to receive payments, facilitating a more convenient and localized payment process for Indonesian Odoo users.

Odoo-Shopee Integration

In October, Odoo announced upcoming integration with Shopee, the leading eCommerce platform in Southeast Asia.

“The opening of Odoo’s new office in BSD marks a significant milestone in our effort to penetrate the Indonesia market. Looking at our journey so far, I am also extremely proud of my team for their relentless contributions in helping our customers become more efficient, one app at a time. Moving forward, we aim to expand the team even more and the best part is: we are always looking for top talents to join us!” — Benny Putra Sugito, Director of Odoo (Indonesia)

Odoo is committed to leading the Indonesian business scene. While its expansion also aims to generate employment opportunities to offer the country a professional workforce in tech and business management, Odoo is resolute in educating the market about the significance of utilizing the right business tools and is dedicated to offering a comprehensive and integrable yet approachable solution to facilitate an easy digital transformation process for 64.2 million businesses of all sizes in Indonesia.

About Odoo

Odoo is a Belgian online business management software with a complete suite of business modules. The open-source service provider operates in 19 locations worldwide, including Indonesia, the United States, Hong Kong SAR, and Dubai. With 80+ official apps and 49k+ third-party apps, Odoo manages businesses’ finance, sales, inventory & manufacturing processes, human resources, marketing, team productivity, and more.

View original content to download multimedia:https://www.prnewswire.com/apac/news-releases/belgian-unicorn-odoo-celebrates-remarkable-first-anniversary-in-indonesia-302305086.html

SOURCE PT Odoo Software Indonesia

Technology

ZEEKR Reports Third Quarter 2024 Unaudited Financial Results

Published

23 minutes ago

November 14, 2024

HANGZHOU, China, Nov. 14, 2024 /PRNewswire/ — ZEEKR Intelligent Technology Holding Limited (“ZEEKR” or the “Company”) (NYSE: ZK), a global premium electric mobility technology company, today announced its unaudited financial results for the third quarter ended September 30, 2024.

Operating Highlights for the Third Quarter of 2024

Total vehicle deliveries were 55,003 units for the third quarter of 2024, representing a 51% year-over-year increase.

Deliveries

2024 Q3

2024 Q2

2024 Q1

2023 Q4

55,003

54,811

33,059

39,657

Deliveries

2023 Q3

2023 Q2

2023 Q1

2022 Q4

36,395

27,399

15,234

32,467

Financial Highlights for the Third Quarter of 2024

Vehicle sales were RMB14,401.3 million (US$2,052.2 million)[1] for the third quarter of 2024, representing an increase of 42.0% from the third quarter of 2023 and an increase of 7.2% from the second quarter of 2024.

Vehicle margin[2] was 15.7% for the third quarter of 2024, compared with 18.1% for the third quarter of 2023 and 14.2% for the second quarter of 2024.

Total revenues were RMB18,358.0 million (US$2,616.0 million) for the third quarter of 2024, representing an increase of 30.7% from the third quarter of 2023 and a decrease of 8.4% from the second quarter of 2024.

Gross profit was RMB2,941.8 million (US$419.2 million) for the third quarter of 2024, representing an increase of 28.5% from the third quarter of 2023 and a decrease of 14.7% from the second quarter of 2024.

Gross margin was 16.0% for the third quarter of 2024, compared with 16.3% for the third quarter of 2023 and 17.2% for the second quarter of 2024.

Loss from operations was RMB1,216.4 million (US$173.3 million) for the third quarter of 2024, representing a decrease of 19.3% from the third quarter of 2023 and a decrease of 29.3% from the second quarter of 2024. Excluding share-based compensation expenses, adjusted loss from operations (non-GAAP)[3] was RMB1,169.8 million (US$166.7 million) for the third quarter of 2024, representing a decrease of 20.8% from the third quarter of 2023 and an increase of 50.5% from the second quarter of 2024.

Net loss was RMB1,139.1 million (US$162.3 million) for the third quarter of 2024, representing a decrease of 21.7% from the third quarter of 2023 and a decrease of 37.0% from the second quarter of 2024. Excluding share-based compensation expenses, adjusted net loss (non-GAAP) was RMB1,092.6 million (US$155.7 million) for the third quarter of 2024, representing a decrease of 23.4% from the third quarter of 2023 and an increase of 26.3% from the second quarter of 2024.

[1] All conversions from Renminbi(“RMB”) to U.S. dollars (“US$”) are made at an exchange rate of RMB7.0176 to US$1.00, set forth in the H.10 statistical release of the Federal Reserve Board on September 30, 2024.

[2] Vehicle margin is the margin of vehicle sales, which is calculated based on revenues and cost of revenues derived from vehicle sales only.

[3] The Company’s non-GAAP financial measures exclude share-based compensation expenses. See “Unaudited Reconciliation of GAAP and Non-GAAP Results” set forth at the end of this announcement.

Key Financial Results

(in RMB millions, except for percentages)

2024 Q3

2024 Q2

2023 Q3

% Change i

YoY

QoQ

Vehicle sales

14,401.3

13,438.2

10,143.7

42.0 %

7.2 %

Vehicle margin

15.7 %

14.2 %

18.1 %

(2.4)pts

1.5pts

Total revenues

18,358.0

20,040.1

14,044.6

30.7 %

(8.4) %

Gross profit

2,941.8

3,449.8

2,289.4

28.5 %

(14.7) %

Gross margin

16.0 %

17.2 %

16.3 %

(0.3)pts

(1.2)pts

Loss from operations

(1,216.4)

(1,721.0)

(1,507.8)

(19.3) %

(29.3) %

Non-GAAP loss from operations

(1,169.8)

(777.1)

(1,477.6)

(20.8) %

50.5 %

Net loss

(1,139.1)

(1,808.8)

(1,455.7)

(21.7) %

(37.0) %

Non-GAAP net loss

(1,092.6)

(864.9)

(1,425.6)

(23.4) %

26.3 %

Except for vehicle margin and gross margin, absolute changes instead of percentage changes are presented.

Recent Developments

Delivery Update

In October 2024, the Company delivered 25,049 vehicles, representing an increase of 92% from October 2023.

New Model Launches

On October 23, 2024, ZEEKR officially launched and commenced deliveries of the ZEEKR MIX, a five-seat, family-oriented vehicle. The ZEEKR MIX redefines the concept of an everyday driver, seamlessly combining ample space, outstanding safety, and agile handling. As the first model built on the Company’s SEA-M architecture, the ZEEKR MIX boasts up to 93% in-cabin space utilization, maximizing interior space through innovative packaging and a capsule-style exterior. Two front-row seats that can swivel 270 degrees and a movable central console enhance cabin versatility, enabling “9+N” cabin scenario modes and flexible seating arrangements.

CEO and CFO Comments

“Our performance remained strong and resilient this quarter, marked by record-high deliveries and successful new model launches,” said Mr. Andy An, ZEEKR’s chief executive officer. “In the third quarter, we set a new record with 55,003 vehicle deliveries, representing a 51% year-over-year increase, and reached an additional milestone in October with monthly deliveries of 25,049 units. Notably, the ZEEKR 7X’s deliveries exceeded 20,000 units within 50 days since its launch, marking a robust achievement in the highly competitive mainstream SUV market. As we expand our product lineup and strengthen each model’s position in its respective category, we are delivering ZEEKR’s ultimate driving experience to more users, further cementing ZEEKR’s industry leadership.”

Mr. Jing Yuan, ZEEKR’s chief financial officer, added, “Our disciplined cost control measures, coupled with ongoing optimization of product structure, economies of scale, and technological innovation, drove a 30.7% year-over-year increase in revenue. Vehicle sales for the quarter grew by 42.0% and 7.2% year-over-year and quarter-over-quarter, respectively. Meanwhile, vehicle margin remained on an upward trajectory, rising to 15.7% in the third quarter of 2024, highlighting our consistent progress in profitability enhancement. Looking ahead, we will continue to consolidate resources, strengthen product capabilities, and expand our industry presence to propel our sustainable growth.”

Financial Results for the Third Quarter of 2024

Revenues

Total revenues were RMB18,358.0 million (US$2,616.0 million) for the third quarter of 2024, representing an increase of 30.7% from RMB14,044.6 million for the third quarter of 2023 and a decrease of 8.4% from RMB20,040.1 million for the second quarter of 2024.

Revenues from vehicle sales were RMB14,401.3 million (US$2,052.2 million) for the third quarter of 2024, representing an increase of 42.0% from RMB10,143.7 million for the third quarter of 2023, and an increase of 7.2% from RMB13,438.2 million for the second quarter of 2024. The year-over-year increase was due to the increase in new product delivery volume, partially offset by the lower average selling price due to the different product mix and pricing strategy changes between the two quarters. The quarter-over-quarter increase was mainly attributable to the launch of the ZEEKR 7X new model in the third quarter of 2024 and the higher average selling price resulting from changes in product mix.

Revenues from sales of batteries and other components were RMB3,245.3 million (US$462.5 million) for the third quarter of 2024, representing a decrease of 1.3% from RMB3,288.8 million for the third quarter of 2023 and a decrease of 38.8% from RMB5,299.2 million for the second quarter of 2024. The revenues from sales of batteries and other components remained relatively stable compared with the third quarter of 2023. The quarter-over-quarter decrease was mainly driven by lower sales volume of battery packs in the domestic market.

Revenues from research and development service and other services were RMB711.4 million (US$101.4 million) for the third quarter of 2024, representing an increase of 16.2% from RMB612.1 million for the third quarter of 2023 and a decrease of 45.4% from RMB1,302.6 million for the second quarter of 2024. The year-over-year increase was mainly due to the increased sales of after-sales vehicle services. The quarter-over-quarter decrease was mainly due to the decreased sales of research and development services to related parties.

Cost of Revenues and Gross Margin

Cost of revenues was RMB15,416.2 million (US$2,196.8 million) for the third quarter of 2024, representing an increase of 31.1% from RMB11,755.2 million for the third quarter of 2023 and a decrease of 7.1% from RMB16,590.2 million for the second quarter of 2024. The year-over-year increase was mainly attributable to the increase in vehicle delivery volume and the quarter-over-quarter decrease was mainly attributable to the decrease in sales of batteries and other components.

Gross profit was RMB2,941.8 million (US$419.2 million) for the third quarter of 2024, representing an increase of 28.5% from RMB2,289.4 million for the third quarter of 2023 and a decrease of 14.7% from RMB3,449.8 million for the second quarter of 2024.

Gross margin was 16.0% for the third quarter of 2024, compared with 16.3% for the third quarter of 2023 and 17.2% for the second quarter of 2024. The gross margin remained relatively stable compared with the third quarter of 2023. The quarter-over-quarter decrease was mainly attributable to the decreased margins on batteries and other components.

Vehicle margin was 15.7% for the third quarter of 2024, compared with 18.1% for the third quarter of 2023 and 14.2% for the second quarter of 2024. The year-over-year decrease was primarily attributed to the lower average selling price of ZEEKR vehicles due to the different product mix and pricing strategy changes between the two quarters, partially offset by the procurement savings as the cost of auto parts and materials decreased. The quarter-over-quarter increase was mainly due to the change in product mix.

Operating Expenses

Research and development expenses were RMB1,966.2 million (US$280.2 million) for the third quarter of 2024, representing a decrease of 2.6% from RMB2,018.1 million for the third quarter of 2023 and a decrease of 25.1% from RMB2,623.5 million for the second quarter of 2024. Research and development expenses remained relatively stable compared with the third quarter of 2023. The quarter-over-quarter decrease was mainly due to a one-off, large quantity of share-based compensation expenses in the second quarter, conditioned on the Company’s initial public offering.

Selling, general and administrative expenses were RMB2,274.8 million (US$324.1 million) for the third quarter of 2024, representing an increase of 25.4% from RMB1,813.9 million for the third quarter of 2023 and a decrease of 12.7% from RMB2,604.7 million for the second quarter of 2024. The year-over-year increase was mainly due to increased expenses related to the expansion of offline channels in China and overseas as well as the marketing activities of the launch of new models. The quarter-over-quarter decrease was mainly due to a one-off, large quantity of share-based compensation expenses in the second quarter, conditioned on the Company’s initial public offering.

Loss from Operations

Loss from operations was RMB1,216.4 million (US$173.3 million) for the third quarter of 2024, representing a decrease of 19.3% from RMB1.507.8 million for the third quarter of 2023 and a decrease of 29.3% from RMB1,721.0 million for the second quarter of 2024.

Non-GAAP loss from operations, which excludes share-based compensation expenses from loss from operations, was RMB1,169.8 million (US$166.7 million) for the third quarter of 2024, representing a decrease of 20.8% from RMB1,477.6 million for the third quarter of 2023 and an increase of 50.5% from RMB777.1 million for the second quarter of 2024.

Net Loss and Net Loss Per Share

Net loss was RMB1,139.1 million (US$162.3 million) for the third quarter of 2024, representing a decrease of 21.7% from RMB1,455.7 million for the third quarter of 2023 and a decrease of 37.0% from RMB1,808.8 million for the second quarter of 2024.

Non-GAAP net loss, which excludes share-based compensation expenses from net loss, was RMB1,092.6 million (US$155.7 million) for the third quarter of 2024, representing a decrease of 23.4% from RMB1,425.6 million for the third quarter of 2023 and an increase of 26.3% from RMB864.9 million for the second quarter of 2024.

Net loss attributable to ordinary shareholders of ZEEKR was RMB1,226.3 million (US$174.7 million) for the third quarter of 2024, representing a decrease of 16.9% from RMB1,476.1 million for the third quarter of 2023 and a decrease of 44.0% from RMB2,190.2 million for the second quarter of 2024.

Non-GAAP net loss attributable to ordinary shareholders of ZEEKR, which excludes share-based compensation expenses from net loss attributable to ordinary shareholders, was RMB1,179.7 million (US$168.1 million) for the third quarter of 2024, representing a decrease of 18.4% from RMB1,445.9 million for the third quarter of 2023 and a decrease of 5.3% from RMB1,246.3 million for the second quarter of 2024.

Basic and diluted net loss per share attributed to ordinary shareholders were RMB0.48 (US$0.07) each for the third quarter of 2024, compared with RMB0.74 each for the third quarter of 2023 and RMB0.95 each for the second quarter of 2024.

Non-GAAP basic and diluted net loss per share attributed to ordinary shareholders were both RMB0.46 (US$0.07) each for the third quarter of 2024, compared with RMB0.72 each for the third quarter of 2023 and RMB0.54 each for the second quarter of 2024.

Basic and diluted net loss per American Depositary Share (“ADS[4]”) attributed to ordinary shareholders were RMB4.80 (US$0.68) each for the third quarter of 2024, compared with RMB9.51 each for the second quarter of 2024.

Non-GAAP basic and diluted net loss per ADS attributed to ordinary shareholders were RMB4.62 (US$0.66) each for the third quarter of 2024, compared with RMB5.41 each for the second quarter of 2024.

[4] Each ADS represents ten ordinary shares.

Balance Sheets

Cash and cash equivalents and restricted cash was RMB8,297.7 million (US$1,182.4 million) as of September 30, 2024.

Conference Call

The Company’s management will host an earnings conference call on Thursday, November 14, 2024, at 7:00 A.M. U.S. Eastern Time (8:00 P.M. Beijing/Hong Kong Time on the same day).

All participants who wish to join the call are requested to complete the online registration using the link provided below. After registration, each participant will receive by email a set of dial-in numbers, a passcode and a unique access PIN to join the conference call. Participants may pre-register at any time, including up to and after the call start time.

Participant Online Registration: https://dpregister.com/sreg/10194063/fdd5d5735e

A live webcast of the conference call will be available on the Company’s investor relations website at https://ir.zeekrlife.com/.

About ZEEKR

ZEEKR (NYSE: ZK) is a global premium electric mobility technology brand from Geely Holding Group. ZEEKR aims to create a fully integrated user ecosystem with innovation as a standard. ZEEKR utilizes Sustainable Experience Architecture (SEA) and develops its own battery technologies, battery management systems, electric motor technologies, and electric vehicle supply chains. ZEEKR’s value is equality, diversity, and sustainability. Its ambition is to become a true mobility solution provider.

ZEEKR operates its R&D centers and design studios in Ningbo, Hangzhou, Gothenburg, and Shanghai and boasts state-of-the-art facilities and world-class expertise. Since ZEEKR began delivering vehicles in October 2021, the brand has developed a diversified product portfolio that primarily includes the ZEEKR 001, a luxury shooting brake; the ZEEKR 001 FR, a hyper-performing electric shooting brake; the ZEEKR 009, a pure electric luxury MPV; the ZEEKR 009 Grand, a four-seat ultra-luxury flagship MPV; the ZEEKR X, a compact SUV; the ZEEKR 7X, a premium electric five-seater SUV; the ZEEKR MIX; and an upscale sedan model. ZEEKR has announced plans to sell vehicles in global markets, and has an ambitious roll-out plan over the next 5 years to satisfy the rapidly expanding global EV demand.

For more information, please visit https://ir.zeekrlife.com/.

Non-GAAP Financial Measures

The Company uses non-GAAP financial measures, such as non-GAAP loss from operations, non-GAAP net loss, non-GAAP net loss attributable to ordinary shareholders, non-GAAP basic and diluted net loss per ordinary share attributed to ordinary shareholders, non-GAAP basic and diluted net loss per ADS attributed to ordinary shareholders, in evaluating its operating results and for financial and operational decision-making purposes. By excluding the impact of share-based compensation expenses, the Company believes that the non-GAAP financial measures help identify underlying trends in its business and enhance the overall understanding of the Company’s past performance and future prospects. The Company also believes that the non-GAAP financial measures allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making. The non-GAAP financial measures are not presented in accordance with U.S. GAAP and may be different from non-GAAP methods of accounting and reporting used by other companies. The non-GAAP financial measures have limitations as analytical tools and when assessing the Company’s operating performance, investors should not consider them in isolation, or as a substitute for net loss or other consolidated statements of comprehensive loss data prepared in accordance with U.S. GAAP. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure. The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.

For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and non-GAAP Results” set forth in this announcement.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars and from U.S. dollars to RMB are made at a rate of RMB7.0176 to US$1.00, the exchange rate on September 30, 2024, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or U.S. dollar amounts referred to could be converted into U.S. dollars or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including statements about the Company’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement. In some cases, forward-looking statements can be identified by words or phrases such as “may,” “will,” “expect,” “anticipate,” “future,” “target,” “aim,” “estimate,” “intend,” “plan,” “believe,” “potential,” “continue,” “is/are likely to,” or other similar expressions. Further information regarding these and other risks, uncertainties or factors is included in the Company’s filings with the SEC. All information provided in this announcement is as of the date of this announcement, and the Company does not undertake any duty to update such information, except as required under applicable law.

For Investor Enquiries
ZEEKR
Investor Relations
Email: ir@zeekrlife.com

For Media Enquiries
ZEEKR
Media Relations
Email: Globalcomms@zeekrlife.com

ZEEKR INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amounts in thousands)

As of

December 31

September 30

2023

2024

RMB

US$

ASSETS

Current assets:

Cash and cash equivalents

3,260,670

5,640,993

803,835

Restricted cash

844,079

2,656,734

378,582

Notes receivable

487,851

952,108

135,674

Accounts receivable

1,104,450

2,096,355

298,728

Inventories

5,228,689

4,745,085

676,169

Amounts due from related parties

7,256,861

6,535,623

931,319

Prepayments and other current assets

2,294,508

2,711,024

386,317

Total current assets

20,477,108

25,337,922

3,610,624

Property, plant and equipment, net

2,914,274

3,265,370

465,312

Intangible assets, net

410,912

624,404

88,977

Land use rights, net

51,755

62,185

8,861

Operating lease right-of-use assets

2,443,545

2,225,175

317,085

Deferred tax assets

86,395

195,175

27,812

Long-term investments

459,794

629,383

89,686

Other non-current assets

273,717

367,752

52,404

Total non-current assets

6,640,392

7,369,444

1,050,137

TOTAL ASSETS

27,117,500

32,707,366

4,660,761

ZEEKR INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS (CONTINUED)

(Amounts in thousands)

As of

December 31

September 30

2023

2024

RMB

US$

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Short-term Borrowings

–

30,000

4,275

Accounts payable

4,104,717

3,589,418

511,488

Notes payable

5,504,945

12,474,151

1,777,552

Amounts due to related parties

16,355,902

15,008,230

2,138,656

Income tax payable

108,083

172,826

24,628

Accruals and other current liabilities

6,243,956

8,114,841

1,156,354

Total current liabilities

32,317,603

39,389,466

5,612,953

Long-term borrowings

–

414,630

59,084

Operating lease liabilities, non-current

1,807,159

1,577,950

224,856

Amounts due to related parties, non-current

1,100,000

–

Other non-current liabilities

563,001

540,082

76,961

Deferred tax liability

8,337

8,224

1,172

Total non-current liabilities

3,478,497

2,540,886

362,073

TOTAL LIABILITIES

35,796,100

41,930,352

5,975,026

SHAREHOLDERS’ EQUITY

Ordinary shares

2,584

3,361

479

Convertible preferred shares

362

–

Shares subscription receivable

–

(66)

(9)

Additional paid-in capital

11,213,798

15,683,094

2,234,823

Accumulated deficits

(20,865,686)

(26,296,475)

(3,747,218)

Accumulated other comprehensive income/(loss)

17,555

(26,402)

(3,762)

Total ZEEKR shareholders’ deficit

(9,631,387)

(10,636,488)

(1,515,687)

Non-controlling interest

952,787

1,413,502

201,422

TOTAL SHAREHOLDERS’ DEFICIT

(8,678,600)

(9,222,986)

(1,314,265)

TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY

27,117,500

32,707,366

4,660,761

ZEEKR INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
(LOSS)/INCOME

(Amounts in thousands, except share/ADS and per share/ADS data and otherwise noted)

Three Months Ended

September 30

June 30

September 30

2023

2024

RMB

US$

Revenues:

Vehicle sales

10,143,742

13,438,241

14,401,309

2,052,170

Sales of batteries and other components

3,288,766

5,299,171

3,245,331

462,456

Research and development service and
other services

612,103

1,302,639

711,362

101,368

Total revenues

14,044,611

20,040,051

18,358,002

2,615,994

Cost of revenues:

Vehicle sales

(8,308,327)

(11,533,020)

(12,146,781)

(1,730,902)

Sales of batteries and other components

(3,050,588)

(4,223,452)

(2,808,646)

(400,229)

Research and development service and
other services

(396,289)

(833,756)

(460,775)

(65,660)

Total cost of revenues

(11,755,204)

(16,590,228)

(15,416,202)

(2,196,791)

Gross profit

2,289,407

3,449,823

2,941,800

419,203

Operating expenses:

Research and development expenses

(2,018,136)

(2,623,471)

(1,966,167)

(280,177)

Selling, general and administrative
expenses

(1,813,890)

(2,604,665)

(2,274,751)

(324,149)

Other operating income, net

34,851

57,287

82,747

11,791

Total operating expenses

(3,797,175)

(5,170,849)

(4,158,171)

(592,535)

Loss from operations

(1,507,768)

(1,721,026)

(1,216,371)

(173,332)

Interest expense

(28,186)

(23,396)

(8,088)

(1,153)

Interest income

27,614

42,537

43,255

6,163

Other income/(expense), net

6,020

(7,809)

54,967

7,833

Loss before income tax expense and
share of losses in equity method
investments

(1,502,320)

(1,709,694)

(1,126,237)

(160,489)

Share of income in equity method
investments

33,021

85,852

81,500

11,614

Income tax benefits/(expense)

13,605

(184,980)

(94,409)

(13,453)

Net loss

(1,455,694)

(1,808,822)

(1,139,146)

(162,328)

Less: income attributable to non-
controlling interest

20,368

381,363

87,134

12,416

Net loss attributable to shareholders
of ZEEKR

(1,476,062)

(2,190,185)

(1,226,280)

(174,744)

ZEEKR INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE
(LOSS)/INCOME (CONTINUED)

(Amounts in thousands, except share/ADS and per share/ADS data and otherwise noted)

Three Months Ended

September 30

June 30

September 30

2023

2024

RMB

US$

Net loss per share attributed to
ordinary shareholders:

Basic and diluted

(0.74)

(0.95)

(0.48)

(0.07)

Weighted average shares used in
calculating net loss per share:

Basic and diluted

2,000,000,000

2,301,866,887

2,552,901,668

Net loss per ADS attributed to
ordinary shareholders:

Basic and diluted

–

(9.51)

(4.80)

(0.68)

Weighted average ADS used in
calculating net loss per ADS:

Basic and diluted

–

230,186,689

255,290,167

Net loss

(1,455,694)

(1,808,822)

(1,139,146)

(162,328)

Other comprehensive income/(loss),
net of tax of nil:

Foreign currency translation
adjustments

(35,240)

74,670

(75,858)

(10,810)

Comprehensive loss

(1,490,934)

(1,734,152)

(1,215,004)

(173,138)

Less: comprehensive income/(loss)
attributable to non-controlling interest

20,368

381,363

87,134

12,416

Comprehensive loss attributable to
shareholders of ZEEKR

(1,511,302)

(2,115,515)

(1,302,138)

(185,554)

ZEEKR INC.

UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS

(Amounts in thousands, except share/ADS and per share/ADS data and otherwise noted)

Three Months Ended

September 30

June 30

September 30

2023

2024

RMB

US$

Loss from operations

(1,507,768)

(1,721,026)

(1,216,371)

(173,332)

Share-based compensation expenses

30,142

943,921

46,595

6,640

Non-GAAP loss from operations

(1,477,626)

(777,105)

(1,169,776)

(166,692)

Net loss

(1,455,694)

(1,808,822)

(1,139,146)

(162,328)

Share-based compensation expenses

30,142

943,921

46,595

6,640

Non-GAAP net loss

(1,425,552)

(864,901)

(1,092,551)

(155,688)

Net loss attributable to ordinary
shareholders

(1,476,062)

(2,190,185)

(1,226,280)

(174,744)

Share-based compensation expenses

30,142

943,921

46,595

6,640

Non-GAAP net loss attributable to
ordinary shareholders of ZEEKR

(1,445,920)

(1,246,264)

(1,179,685)

(168,104)

Weighted average number of
ordinary shares used in calculating
Non-GAAP net loss per share

Basic and diluted

2,000,000,000

2,301,866,887

2,552,901,668

Non-GAAP net loss per ordinary
share attributed to ordinary
shareholders

Basic and diluted

(0.72)

(0.54)

(0.46)

(0.07)

Weighted average number of ADS
used in calculating Non-GAAP net
loss per ADS

Basic and diluted

–

230,186,689

255,290,167

Non-GAAP net loss per ADS
attributed to ordinary shareholders

Basic and diluted

–

(5.41)

(4.62)

(0.66)

View original content:https://www.prnewswire.com/news-releases/zeekr-reports-third-quarter-2024-unaudited-financial-results-302305084.html

SOURCE ZEEKR Intelligent Technology Holding Limited

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