Converge Reports Preliminary Fourth Quarter and Fiscal Year 2024 Financial Results and Conference Call Details
Converge Technology Solutions (CTSDF) has released preliminary Q4-2024 and fiscal year 2024 results. For Q4-2024, the company reported gross sales of $1.1 billion (+2.5% YoY), revenue of $680.8 million (+4.6% YoY), and Adjusted EBITDA of $47.9 million (+3.0% YoY). However, Q4 showed a loss before income taxes of $21.2 million, largely due to a $24.0 million impairment from Portage CyberTech investment.
For fiscal year 2024, while gross sales reached $4.1 billion (+2.1% YoY), revenue declined 4.2% to $2.6 billion. The company faced significant challenges with a $200.5 million loss before income taxes, primarily attributed to a $176.1 million impairment loss in the German segment and $25.9 million loss from Portage investment. The company will discuss complete financial results in a conference call scheduled for March 6th, 2025.
Converge Technology Solutions (CTSDF) ha pubblicato i risultati preliminari del quarto trimestre 2024 e dell'anno fiscale 2024. Per il Q4-2024, la società ha riportato vendite lorde di 1,1 miliardi di dollari (+2,5% su base annua), ricavi di 680,8 milioni di dollari (+4,6% su base annua) e EBITDA rettificato di 47,9 milioni di dollari (+3,0% su base annua). Tuttavia, il quarto trimestre ha mostrato una perdita prima delle imposte sul reddito di 21,2 milioni di dollari, principalmente a causa di un'impostazione di valore di 24,0 milioni di dollari dall'investimento in Portage CyberTech.
Per l'anno fiscale 2024, mentre le vendite lorde hanno raggiunto 4,1 miliardi di dollari (+2,1% su base annua), i ricavi sono diminuiti del 4,2% a 2,6 miliardi di dollari. L'azienda ha affrontato sfide significative con una perdita di 200,5 milioni di dollari prima delle imposte sul reddito, principalmente attribuibile a una perdita di valore di 176,1 milioni di dollari nel segmento tedesco e a una perdita di 25,9 milioni di dollari dall'investimento in Portage. L'azienda discuterà i risultati finanziari completi in una conferenza telefonica prevista per il 6 marzo 2025.
Converge Technology Solutions (CTSDF) ha publicado resultados preliminares del cuarto trimestre de 2024 y del año fiscal 2024. Para el Q4-2024, la compañía reportó ventas brutas de 1.1 mil millones de dólares (+2.5% interanual), ingresos de 680.8 millones de dólares (+4.6% interanual) y EBITDA ajustado de 47.9 millones de dólares (+3.0% interanual). Sin embargo, el cuarto trimestre mostró una pérdida antes de impuestos sobre la renta de 21.2 millones de dólares, principalmente debido a un deterioro de 24.0 millones de dólares de la inversión en Portage CyberTech.
Para el año fiscal 2024, mientras que las ventas brutas alcanzaron 4.1 mil millones de dólares (+2.1% interanual), los ingresos disminuyeron un 4.2% a 2.6 mil millones de dólares. La empresa enfrentó desafíos significativos con una pérdida de 200.5 millones de dólares antes de impuestos sobre la renta, atribuida principalmente a una pérdida por deterioro de 176.1 millones de dólares en el segmento alemán y a una pérdida de 25.9 millones de dólares de la inversión en Portage. La compañía discutirá los resultados financieros completos en una conferencia telefónica programada para el 6 de marzo de 2025.
컨버지 기술 솔루션즈 (CTSDF)는 2024년 4분기 및 2024 회계연도 예비 결과를 발표했습니다. 2024년 4분기 동안, 이 회사는 11억 달러의 총 판매액 (+2.5% 전년 대비), 6억 8천 80만 달러의 수익 (+4.6% 전년 대비), 그리고 4천 790만 달러의 조정된 EBITDA (+3.0% 전년 대비)를 보고했습니다. 그러나 4분기 동안 세전 손실이 2천 120만 달러 발생했으며, 이는 주로 포타주 사이버테크 투자에서 발생한 2천 400만 달러의 가치 하락 때문입니다.
2024 회계연도 동안 총 판매액은 41억 달러 (+2.1% 전년 대비)에 도달했으나 수익은 4.2% 감소하여 26억 달러에 도달했습니다. 이 회사는 독일 부문에서 1억 7천 610만 달러의 가치 하락 손실과 포타주 투자에서 발생한 2천 590만 달러의 손실을 주로 원인으로 하여 2억 5백만 달러의 세전 손실로 인해 상당한 도전에 직면했습니다. 이 회사는 2025년 3월 6일 예정된 전화 회의에서 전체 재무 결과를 논의할 것입니다.
Converge Technology Solutions (CTSDF) a publié les résultats préliminaires du quatrième trimestre 2024 et de l'exercice 2024. Pour le Q4-2024, la société a déclaré des ventes brutes de 1,1 milliard de dollars (+2,5% par rapport à l'année précédente), des revenus de 680,8 millions de dollars (+4,6% par rapport à l'année précédente) et un EBITDA ajusté de 47,9 millions de dollars (+3,0% par rapport à l'année précédente). Cependant, le quatrième trimestre a montré une perte avant impôt sur le revenu de 21,2 millions de dollars, principalement en raison d'une perte de valeur de 24,0 millions de dollars de l'investissement dans Portage CyberTech.
Pour l'exercice 2024, bien que les ventes brutes aient atteint 4,1 milliards de dollars (+2,1% par rapport à l'année précédente), les revenus ont diminué de 4,2% pour atteindre 2,6 milliards de dollars. L'entreprise a rencontré d'importants défis avec une perte de 200,5 millions de dollars avant impôt sur le revenu, principalement attribuée à une perte de valeur de 176,1 millions de dollars dans le segment allemand et à une perte de 25,9 millions de dollars de l'investissement dans Portage. L'entreprise discutera des résultats financiers complets lors d'une conférence téléphonique prévue le 6 mars 2025.
Converge Technology Solutions (CTSDF) hat vorläufige Ergebnisse für das vierte Quartal 2024 und das Geschäftsjahr 2024 veröffentlicht. Für das Q4-2024 meldete das Unternehmen Bruttoumsätze von 1,1 Milliarden Dollar (+2,5% im Jahresvergleich), Einnahmen von 680,8 Millionen Dollar (+4,6% im Jahresvergleich) und bereinigtes EBITDA von 47,9 Millionen Dollar (+3,0% im Jahresvergleich). Das vierte Quartal wies jedoch einen Verlust vor Ertragsteuern von 21,2 Millionen Dollar auf, der hauptsächlich auf eine Wertminderung von 24,0 Millionen Dollar aus der Portage CyberTech-Investition zurückzuführen war.
Für das Geschäftsjahr 2024 erreichten die Bruttoumsätze 4,1 Milliarden Dollar (+2,1% im Jahresvergleich), während die Einnahmen um 4,2% auf 2,6 Milliarden Dollar sanken. Das Unternehmen sah sich erheblichen Herausforderungen gegenüber, mit einem Verlust von 200,5 Millionen Dollar vor Ertragsteuern, der hauptsächlich auf einen Wertminderungsverlust von 176,1 Millionen Dollar im deutschen Segment und einen Verlust von 25,9 Millionen Dollar aus der Portage-Investition zurückzuführen war. Das Unternehmen wird die vollständigen finanziellen Ergebnisse in einer Telefonkonferenz am 6. März 2025 besprechen.
- Q4 gross sales increased 2.5% YoY to $1.1 billion
- Q4 revenue grew 4.6% YoY to $680.8 million
- Q4 Adjusted EBITDA improved 3.0% YoY to $47.9 million
- Strong Q4 cash from operations at $57.0 million (119% of Adjusted EBITDA)
- FY2024 cash from operations reached $269.4 million (161% of Adjusted EBITDA)
- Q4 gross profit declined 1.6% YoY to $178.6 million
- Q4 loss before income taxes of $21.2 million, worsening by $16.8 million YoY
- FY2024 revenue declined 4.2% YoY to $2.6 billion
- FY2024 Adjusted EBITDA decreased 1.7% YoY to $167.3 million
- FY2024 loss before taxes of $200.5 million, including $176.1 million German segment impairment
- Significant impairment charges from Portage CyberTech investment ($25.9 million)
Q4-2024 Preliminary Results:
- Gross sales1 is expected to be approximately
$1.1 billion 2.5% year-over-year. - Revenue is expected to be approximately
$680.8 million 4.6% year-over-year. - Gross profit is expected to be approximately
$178.6 million 1.6% year-over-year. - Adjusted EBITDA1 is expected to be approximately
$47.9 million 3.0% year-over-year. - Cash from operating activities is expected to be approximately
$57.0 million 119% of Adjusted EBITDA1. - Loss before income taxes is expected to be approximately
$21.2 million $16.8 million $24.0 million
Fiscal 2024 Preliminary Results:
- Gross sales1 is expected to be approximately
$4.1 billion 2.1% year-over-year. - Revenue is expected to be approximately
$2.6 billion 4.2% year-over-year. - Gross profit is expected to be approximately
$691.4 million 1.6% year-over-year. - Adjusted EBITDA1 is expected to be approximately
$167.3 million 1.7% year-over-year. - Cash from operating activities is expected to be approximately
$269.4 million 161% of Adjusted EBITDA1. - Loss before income taxes is expected to be approximately
$200.5 million $182.0 million $176.1 million $25.9 million
_________________________________ |
[1] This is a non-IFRS measures and not a recognized, defined or a standardized measure under IFRS. This non-IFRS financial measure reported by the Company are defined in the "Non-IFRS Financial Measures" section of this press release. |
The above results are preliminary in nature and unaudited, and are inherently uncertain due to a number of factors, and remain subject to review by the Company's management, audit committee and board of directors and the completion of regular financial closing and review procedures and audit procedures for Q4-2024 and fiscal year ended December 31, 2024, as applicable. These estimates are not a comprehensive statement of the Company's financial results for Q4-2024 and fiscal year December 31, 2024 The preliminary unaudited figures disclosed herein should not be viewed as a substitute for audited financial statements prepared in accordance with generally accepted accounting principles. Additional adjustments to the preliminary unaudited figures presented above may be identified, and final results for the relevant fiscal periods may differ materially from these preliminary unaudited figures and will not be finalized until after the Company completes its normal year-end accounting procedures, including execution of internal controls over financial reporting. These preliminary unaudited figures are intended to provide information about management's current expectations regarding certain aspects of Converge's financial performance. Reliance on the information presented herein may not be appropriate for other purposes. Please see the section below entitled "Forward- Looking Information".
The Company will provide additional discussion and analysis regarding its fourth quarter results when it reports its complete financial results for Q4-2024 and fiscal year ended December 31, 2024.
Conference Call Details:
Date: Thursday, March 6th, 2025
Time: 8:00 AM Eastern Standard Time
Participant Webcast Link:
Webcast Link – https://app.webinar.net/5dw46kbzGAR
Participant Dial-in Details with Operator Assistance:
Conference ID: 07389
North American Toll Free: 1-888-699-1199
International Toll-Free Numbers:
You may register and enter your phone number to receive an instant automated call back via https://emportal.ink/3WRn7js
Recording Playback:
Webcast Link - https://app.webinar.net/5dw46kbzGAR
North American Toll Free: 1-888-660-6345
Replay Code: 07389 #
Expiry Date: March 13th, 2025
Please connect at least 15 minutes prior to the conference call to ensure time for any software download that may be required to access the webcast. A live audio webcast accompanied by presentation slides and archive of the conference call and webcast will be available by visiting the Company's website at https://convergetp.com/investor-relations/.
About Converge
Converge Technology Solutions Corp. is reimagining the way businesses think about IT—a vision driven by people, for people. Since 2017, we've focused on delivering outcomes-driven solutions that tackle human-centered challenges. As a services-led, software-enabled, IT & Cloud Solutions provider, we combine deep expertise, local connections, and global resources to deliver industry-leading solutions.
Through advanced analytics, artificial intelligence (AI), cloud platforms, cybersecurity, digital infrastructure, and workplace transformation, we empower businesses across industries to innovate, streamline operations, and achieve meaningful results. Our AIM (Advise, Implement, Manage) methodology ensures solutions are tailored to our customers' specific needs, aligning with existing systems to drive success without complexity.
Discover IT reimagined with Converge—where innovation meets people. Learn more at convergetp.com.
For further information:
Investor Relations
investors@convergetp.com
Phone: 416-360-1495
Non-IFRS Financial Measures
This press release refers to certain performance indicators including Adjusted EBITDA and gross sales that do not have any standardized meaning prescribed by IFRS and may not be comparable to similar measures presented by other companies. Management believes that these measures are useful to most shareholders, creditors, and other stakeholders in analyzing the Company's operating results and can highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. The Company also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers.
Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess the ability to meet capital expenditure and working capital requirements. These non-IFRS financial measures should not be considered as an alternative to the consolidated income (loss) or any other measure of performance under IFRS. Investors are encouraged to review the Company's financial statements and disclosures in their entirety, are cautioned not to put undue reliance on non-IFRS measures and view them in conjunction with the most comparable IFRS financial measures.
Please see "Non-IFRS Financial & Supplementary Financial Measures" and "Summary of Consolidated Financial Results" in the Company's most recent Management Discussion and Analysis, which is available on the Company's profile on SEDAR+ at www.sedarplus.ca, for further details on certain non-IFRS measures, which information is incorporated by reference herein.
Adjusted EBITDA
Adjusted EBITDA represents net income or loss adjusted to exclude amortization, depreciation, net finance expense, foreign exchange gains and losses, other expenses and income, share-based compensation expense, income tax expense or recovery, change in fair value of contingent consideration, impairment loss, gain or loss on loss of control of subsidiary, income or loss from investment in associates and acquisition, integration, restructuring and other expenses. Acquisition and transaction related costs primarily consists of acquisition-related compensation tied to continued employment of pre-existing shareholders of the acquiree not included in the total purchase consideration and professional fees. Integration costs primarily consist of professional fees incurred related to integration of acquisitions completed. Restructuring costs mainly represent employee exit costs as a result of synergies created from acquisitions and organizational changes. Adjusted EBITDA is not a recognized, defined, or standardized measure under IFRS. The Company's definition of Adjusted EBITDA will likely differ from that used by other companies and therefore comparability may be limited.
Adjusted EBITDA is not a recognized, defined, or standardized measure under IFRS. The Company's definition of Adjusted EBITDA will likely differ from that used by other companies and therefore comparability may be limited.
Adjusted EBITDA should not be considered a substitute for or in isolation from measures prepared in accordance with IFRS.
The IFRS measure most directly comparable to Adjusted EBITDA presented in the Company's financial statements is net (loss) income before taxes.
The Company has reconciled Adjusted EBITDA to the most comparable IFRS financial measure as follows:
(000' of CAD) | Q4 2023 $ | Fiscal 2023 $ |
Net (loss) income before taxes | (4,454) | (18,565) |
Depreciation and amortization | 29,212 | 111,451 |
Depreciation included in cost of sales | 2,427 | 8,532 |
Finance expense, net | 10,355 | 41,225 |
Acquisition, integration, restructuring and other | 2,679 | 13,648 |
Change in fair value of contingent consideration | 5,464 | 14,673 |
Share-based compensation | 954 | 3,692 |
Other loss (income), net | (132) | (4,362) |
Adjusted EBITDA | 46,505 | 170,294 |
Gross sales
Gross sales, which is a non-IFRS measure, reflects the gross amount billed to customers, adjusted for amounts deferred or accrued. The Company believes gross sales is a useful alternative financial metric to net revenue, the IFRS measure, as it better reflects volume fluctuations as compared to net revenue. Under the applicable IFRS 15 'principal vs agent' guidance, the principal records revenue on a gross basis and the agent records commission on a net basis. In transactions where Converge is acting as an agent between the customer and the vendor, net revenue is calculated by reducing gross sales by the cost of sale amount.
The Company has reconciled Gross sales to the most comparable IFRS financial measure as follows:
(000' of CAD) | Q4 2023 $ | Fiscal 2023 $ |
Gross sales | 1,078,663 | 4,037,921 |
Less: adjustment for sales transacted as agent | 427,573 | 1,332,714 |
Revenue | 651,090 | 2,705,207 |
Forward-Looking Information
This press release contains certain "forward-looking information" and "forward-looking statements" (collectively, "forward-looking statements") within the meaning of applicable Canadian securities legislation regarding Converge and its business. Any statement that involves discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, future events or performance (often but not always using phrases such as "expects", or "does not expect", "is expected" "anticipates" or "does not anticipate", "plans", "budget", "scheduled", "forecasts". "estimates", "believes" or "intends" or variations of such words and phrases or stating that certain actions, events or results "may" or "could", "would", "might" or "will" be taken to occur or be achieved) are not statements of historical fact and may be forward-looking statements. Specifically, statements regarding Converge's expected revenue, gross profit, gross sales, Adjusted EBITDA, cash from operating activities and loss before income taxes are considered forward-looking information. The forward-looking information, including management's assessments of, and outlook for, revenue, gross profit, gross sales, Adjusted EBITDA, cash from operating activities and loss before income taxes are based on management's opinions, estimates and assumptions, including, but not limited to: (i) Converge's results of operations will continue as expected, (ii) the Company will continue to effectively execute against its key strategic growth priorities, (iii) the Company will continue to retain and grow its existing customer base and market share, (iv) the Company will be able to take advantage of future prospects and opportunities, and realize on synergies, including with respect of acquisitions, (v) there will be no changes in legislative or regulatory matters that negatively impact the Company's business, (vi) current tax laws will remain in effect and will not be materially changed, (vii) economic conditions will remain relatively stable throughout the period, (vii) the industries Converge operates in will continue to grow consistent with past experience, and (ix) those assumptions described under the heading "About Forward-Looking Information" in the Company's Management Discussion and Analysis for the three and nine months ended September 30, 2024. While these opinions, estimates and assumptions are considered by the Company to be appropriate and reasonable in the circumstances as of the date of this press release, they are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by such forward-looking information.
The forward looking information, including the achievement of expected revenue, gross profit, gross sales, Adjusted EBITDA, cash from operating activities and loss before income taxes set out above, are subject to significant risks including, without limitation: that the Company will be unable to effectively execute against its key strategic growth priorities; the Company will be unable to continue to retain and grow its existing customer base and market share; risks related to the Company's business and financial position; that the Company may not be able to accurately predict its rate of growth and profitability; risks related to economic and political uncertainty; income tax related risks; and those risk factors discussed in greater detail under the "Risk Factors" section of the Company's most recent annual information form and under the heading "Risks and Uncertainties" in the Company's most recent Management Discussion and Analysis, which are each available under the Company's profile on SEDAR+ at www.sedarplus.ca. Many of these risks are beyond the Company's control.
If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. Although the Company has attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to the Company or that the Company presently believes are not material that could also cause actual results or future events to differ materially from those expressed in such forward-looking information.
Although the Company bases these forward-looking statements on assumptions that it believes are reasonable when made, the Company cautions investors that forward-looking statements are not guarantees of future performance and that its actual results of operations, financial condition and liquidity may differ materially from those made in or suggested by the forward-looking statements contained in this press release. In addition, even if the Company's results of operations, financial condition and liquidity are consistent with the forward-looking statements contained in this press release, those results of developments may not be indicative of results in subsequent periods.
There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this press release represents the company's expectations as of the date specified herein, and are subject to change after such date. However, the Company disclaims any intention or obligation or undertaking to update or revise any forward-looking information or to publicly announce the results of any revisions to any of those statements, whether as a result of new information, future events or otherwise, except as required under applicable securities laws. Comparisons of results for current and any prior periods are not intended to express any future trends or indications of future performance, unless specifically expressed as such, and should only be viewed as historical data.
All of the forward-looking information contained in this press release is expressly qualified by the foregoing cautionary statements.
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SOURCE Converge Technology Solutions Corp.
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