1. Q4 2024 revenues decreased to $38.9 million from $43 million in 2023. 2. Adjusted EBITDA fell to $1.2 million from $2.3 million YoY. 3. Quarterhill projects growth and margin expansion for 2025. 4. Q4 cash from operations was $6.5 million, improving compared to 2023. 5. Leadership changes and strategic plans are central to Quarterhill's turnaround.
Despite lower Q4 revenues, overall cash flow and strategic growth plans indicate positive future potential, similar to past recoveries following strategic leadership changes.
The financial results and turnaround strategy addressing operational efficiencies are crucial factors that could influence investor confidence and share price in QTRHF.
The transformation initiatives and projected growth suggest benefits will materialize over the next few quarters, akin to Quarterhill's previous recovery phases.
All financial information in this press release is reported in United States ("US") dollars, unless otherwise indicated.
"We made progress in 2024 on our turnaround efforts, delivering top-line growth and positive Adjusted EBITDA for the year, as well as positive cash from operations and growth in our cash balance in Q4," said Chuck Myers, CEO at Quarterhill.
"For the past year, our focus has been to transform the business by integrating our strong operating assets, implementing leadership changes, developing our strategic plan, advancing our technology roadmap, expanding our sales pipeline, and renegotiating certain tolling contracts. While there is still work to do, we made important progress on each of these fronts in 2024, which positions us well for revenue growth and margin expansion in 2025."
"Our vision is to become the number one or two player in the markets we operate in. We aim to achieve growth while generating reliable cash flows to build a healthy balance sheet capable of supporting both organic and acquisition-driven expansion. While we still have work to do in our turnaround, with a solid financial foundation, improved operational efficiency, and enhanced technological capabilities, we are confident in our strategy and ability to execute on our growth plans."
Quarterhill's Management's Discussion and Analysis for the three and twelve months ended December 31, 2024 and 2024 Annual Consolidated Financial Statements are available at the Company's website and at its profile at SEDAR+.
Financial statements for the three and twelve months ended December 31, 2023, have been prepared to reflect continuing operations, and therefore, exclude results during that period from Wi-LAN Inc. ("WiLAN"), which was sold by Quarterhill on June 15, 2023.
Revenues for the three and twelve months ended December 31, 2024, were $38.9 million and $153.3 million, compared to $43.0 million and $144.0 million in the three and twelve months ended December 31, 2023. The decrease in revenue for Q4 2024 was due primarily to the timing of revenues received from certain contracts and the disposition of non-core Latin American operations in December 2023. The increase in revenues for fiscal 2024 was primarily due to continued strong performance from the enforcement operations as well as increased contribution from tolling operations.
Gross profit as a value and as a percentage of revenues may be subject to significant variance in each reporting period due to the nature and type of contract and service work performed and currency volatility. Gross profit for the three and twelve months ended December 31, 2024, was $7.8 million and $27.8 million, or 20% and 18%, as compared to $8.5 million and $30.1 million, or 20% and 21%, in the three and twelve months ended December 31, 2023, respectively.
The decrease in fiscal 2024 compared to fiscal 2023 was primarily due to reserves taken in Q3 2024 related to cost overruns on two tolling projects which was partially offset by continued strong margin performance from the enforcement operations.
Total operating expenses are comprised of selling, general and administrative costs ("SG&A"), research and development ("R&D") costs, depreciation, amortization of intangible assets and other charges. Total operating expenses for the three and twelve months ended December 31, 2024, were $11.2 million and $43.7 million, compared to $15.8 million and $47.9 million in the three and twelve months ended December 31, 2023, respectively.
The decreases are primarily due to a reduction in other charges and lower R&D, which was offset in part by an increase in SG&A.
Adjusted EBITDA for the three and twelve months ended December 31, 2024, was $1.2 million and $0.2 million, compared to $2.3 million and $2.9 million for the three and twelve months ended December 31, 2023, respectively.
The decrease in Adjusted EBITDA for the three and twelve months ended December 31, 2024, compared to the prior year periods, was due to the factors impacting revenue, gross margin and expenses, as previously described.
Net income (loss) from continuing operations for the three and twelve months ended December 31, 2024, was $0.3 million and ($11.0) million, or $0.00 and ($0.10) per diluted share, compared to a net loss from continuing operations of ($11.5) million and ($32.4) million, or ($0.10) and ($0.28) per diluted share, for the three and twelve months ended December 31, 2023.
Cash generated from (used in) continuing operations for the three and twelve months ended December 31, 2024, was $6.5 million and ($4.4) million, compared to $32 thousand and ($14.0) million for the three and twelve months ended December 31, 2023.
Cash and cash equivalents were $31.9 million at December 31, 2024, compared to $23.1 million at September 30, 2024 and $42.7 million at December 31, 2023.
Due to the nature of the Company's business activities, operating cash flows may vary significantly between periods due to changes and timing in working capital balances. Adjusted Working Capital was $66.2 million at December 31, 2024, compared to $78.9 million at December 31, 2023.
Quarterhill will host a conference call to discuss its financial results on Monday, March 17, 2025, at 10:00 AM Eastern Time.
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Telephone Replay
Telephone replay will be available from March 17, 2025, until March 24, 2025, at:
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Conference ID: 09879 and Replay Passcode: 09879#
Quarterhill uses both IFRS and certain non-IFRS financial measures to assess performance.
Non-IFRS financial measures are financial measures disclosed by a company that (a) depict historical or expected future financial performance, financial position or cash flow of a company...
Quarterhill is a leading provider of tolling and enforcement solutions in the Intelligent Transportation System (ITS) industry.
This news release contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities laws...
The Consolidated Statements of Net Income (Loss) and Comprehensive Loss are presented as follows: