SHERIDAN, WYOMING – Feb. 15, 2025, Teleste Corporation (TELES) released its financial statement for the period of January 1 to December 31, 2024, reporting improved orders, net sales, and adjusted operating profit in the fourth quarter. While full-year 2024 net sales decreased compared to 2023, the adjusted operating result showed significant improvement, reaching the upper end of the company's updated financial guidance. Both the Broadband Networks and Public Safety and Mobility segments contributed to this positive performance.
Q4 2024 Highlights: Strong Finish to the Year
Teleste's fourth quarter (October-December 2024) performance demonstrated a solid recovery. Key figures include:
- Net Sales: Increased by 19.0% to EUR 36.5 million (compared to EUR 30.7 million in Q4 2023).
- Adjusted EBITDA: EUR 2.1 million (compared to EUR 0.4 million in Q4 2023), a 503.0% increase.
- Adjusted Operating Result: EUR 0.8 million (compared to a loss of EUR -1.4 million in Q4 2023).
- Operating Result: EUR -5.7 million (compared to a loss of EUR -2.3 million in Q4 2023), primarily due to a one-time impairment on capitalized R&D expenses.
- Adjusted Earnings Per Share: EUR 0.08 (compared to EUR -0.10 in Q4 2023).
- Cash Flow from Operations: EUR 1.8 million (compared to EUR -1.9 million in Q4 2023).
- Orders Received: Increased by 13.2% to EUR 36.3 million (compared to EUR 32.1 million in Q4 2023).
Full-Year 2024 Performance: Profitability Improvement Despite Revenue Dip
For the full year 2024, Teleste reported the following:
- Net Sales: Decreased by 12.4% to EUR 132.5 million (compared to EUR 151.3 million in 2023).
- Adjusted EBITDA: Increased by 27.2% to EUR 9.2 million (compared to EUR 7.2 million in 2023).
- Adjusted Operating Result: EUR 4.0 million (compared to EUR 1.2 million in 2023), a 248.2% increase.
- Operating Result: EUR -5.5 million (compared to EUR -0.5 million in 2023), due to a one-time impairment on capitalized R&D expenses and restructuring costs.
- Adjusted Earnings Per Share: EUR 0.20 (compared to EUR 0.09 in 2023).
- Cash Flow from Operations: Increased by 15.2% to EUR 12.4 million (compared to EUR 10.8 million in 2023).
- Orders Received: Decreased by 16.5% to EUR 124.9 million (compared to EUR 149.6 million in 2023).
- Order Book: Decreased by 6.1% to EUR 118.3 million (compared to EUR 125.9 million in 2023).
CEO Commentary: Strategic Focus on Growth and Efficiency
President & CEO Esa Harju commented on the results: "Our performance was solid and in line with our expectations in the last financial quarter of 2024. Orders received, revenue, and adjusted operating profit all saw a clear increase compared to the same period in the previous year. Despite a decrease in full-year 2024 revenue from the previous year, adjusted operating profit improved significantly, reaching the top end of our updated financial guidance. Both business segments made excellent progress, laying a strong foundation for future growth and success."
Harju highlighted the strong performance of the Broadband Networks segment, particularly in North America. He noted, "The increase in orders was primarily due to achievements in North America... but the European market decline also appears to have stabilized." He also mentioned a multi-year cooperation agreement with Telia Finland and confirmed deliveries of next-generation DOCSIS 4.0 technologies to a major European operator in the latter half of 2025.
Regarding the Public Safety and Mobility segment, Harju stated that "revenue and profitability increased compared to the same period last year," and noted a master supply agreement with Siemens Mobility. He also emphasized the good performance of video surveillance solutions and service/maintenance business.
Harju addressed the one-time impairment of capitalized R&D, stating it was "due to uncertainties in the technology direction of the industry, as well as slower adoption of DAA technology in the market" and that it had "no impact on cash flow." He also highlighted the company's cost-saving measures and the restructuring of the group's legal structure.
Outlook for 2025: Growth and Potential Challenges
Teleste estimates 2025 revenue to be between EUR 135 million and EUR 150 million, with an adjusted operating profit in the range of EUR 4 million to EUR 7 million. The result is expected to be primarily realized in the second half of the year. The company acknowledged that potential import tariffs in the United States could negatively affect profitability in the short term.
Harju outlined the strategic priorities for 2025: "In 2025, Broadband Networks will focus on growing its North American business, whilst maintaining European revenue levels. Potential trade actions and import tariffs in the United States may reduce profitability in the short term, and the company is preparing a contingency plan for this. The Public Safety and Mobility business aims to achieve profitable growth across all product groups. Our renewed leadership team is fully aligned and committed to driving our strategic long-term growth objectives successfully."
Dividend Proposal
The Board of Directors proposes to the Annual General Meeting a dividend of EUR 0.03 per share for the financial period ending December 31, 2024.
For more information, visit www.teleste.com.