Gloster 2024 first half: Growth driven by exports and recurring revenues Half-year net profit exceeds full-year result for last year

Regular UPDATE
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Gloster Infocommunications Public Limited Company (company registration number: 13-10-042012; registered office: 2142 Nagytarcsa, Csonka János Street 1/A, Building A/2; hereinafter: the Company, Gloster) hereby informs its esteemed investors of the following in accordance with applicable laws, in particular Act CXX of 2001 on the Capital Market (“Tpt.”) and the General Rules of the Budapest Stock Exchange.

Gloster First Half of 2024: Growth Driven by Exports and Recurring Revenue

Half-year net income exceeds last year's full-year net income

September 25, 2024 – Gloster Infokommunikációs Nyrt., which was listed on the BSE’s Standard category in January of this year, saw its net sales revenue increase by 90 percent to 6.2 billion forints in the first half of 2024—of which revenue from foreign sales rose by 144 percent to 2.4 billion forints. Compared to the same period last year, EBITDA grew by 199%, reaching 522 million forints. This significant growth was driven by the company’s acquisition of P92 IT Solutions Kft., completed in August 2023, and the merger of Systemfarmer Zrt. and Gloster Cloud Zrt., signed on February 16, 2024.

According to the interim report published for the first time in accordance with IFRS standards, Gloster’s profit after tax of 309 million forints in the first half of 2024 represents a spectacular increase compared to the 49 million forint loss in the same period last year, but is also comparable to the group’s full-year after-tax profit for 2023, which was 305 million forints. Behind this significant growth lies the group’s ongoing growth strategy, which was key to increasing revenues and profits: the 2023 acquisition of P92 IT Solutions Kft. and the merger with Systemfarmer Zrt., announced in 2024, contributed significantly to the group’s improved results for the first half of 2024. Management expects that, as a result of the integration of Systemfarmer Zrt., Gloster’s revenue and profits will also increase, as the merger now positions the group as the largest domestically owned Microsoft cloud services partner, which will attract additional clients and projects.

Profits Come from Abroad

In Gloster’s report for the first half of 2024, export revenue showed an outstanding 144% increase, reaching 2.4 billion forints. Exports account for an ever-growing share of the company’s total revenue, and revenue earned in foreign currency significantly reduces the risks arising from exchange rate exposure. The growth in export revenue is of strategic importance to Gloster, and its success is demonstrated by the fact that the share of exports relative to the company’s total revenue reached 38.1% at the end of the first half of the year. This means that Gloster has already met its strategic goal for 2026—which called for an export share of 30–40%—as early as 2024. Management expects further growth in international markets.

Successful expansion into international markets is the result of a deliberate strategy. The Group’s strategic acquisitions—such as those of Minero IT Hungary Kft. and P92 IT Solutions Kft.—have enabled Gloster to enter new, profitable markets and expand its international client base. In recent years, global partners such as BMW, Audi, and SONY Music have joined the Group’s client base, further increasing the company’s foreign-currency-denominated revenues and long-term financial stability.

The Focus Is on Recurring Revenue

In management’s view, the significant 125% increase in recurring revenue during the first half of the year is one of the most important indicators of Gloster’s financial stability. Recurring revenue, which rose to 4.8 billion forints (compared to 2.13 billion forints in the same period of the previous year), consists of recurring, predictable revenue streams typically linked to subscriptions, service contracts, or long-term customer relationships, and as a result, these revenues are less exposed to short-term market fluctuations.

The increase in recurring revenue indicates that the Company is performing well in its core business areas and that further growth is built on a sustainable foundation. Recurring revenue accounted for 77.4% of total revenue (compared to 65.3% last year), which clearly demonstrates that the Group is increasingly relying on strategic, long-term customer relationships and recurring service contracts.

ERSTE Investment Ltd. is tracking Gloster shares, with a target price of 1,183 HUF and a “buy” recommendation.

About Gloster

Gloster is a broad-spectrum international IT service provider listed in the BSE’s Standard category. Over the course of its more than 20-year history, it has evolved from a hardware-focused garage startup into a software-focused international mid-sized company. Thanks to Gloster’s aggressive growth strategy, it has completed eleven transactions since 2018 and expanded its operations into the areas of systems integration, cloud solutions, and international software development services. The group currently employs a team of nearly 350 people; according to its audited consolidated financial statements for 2023, its revenue was 10.3 billion forints, its adjusted EBITDA was 976 million forints, and its net income was 414 million forints.

Nagytarcsa, September 25, 2024

Gloster Infocommunications Plc.

Further information:

Dr. Adrienn Karlovich-Szabó

investor relations officer

karlovich.szabo.adrienn@gloster.hu