Swissnet released preliminary FY24 figures showcasing the successful operational turnaround achieved in FY23 as well as strong growth, even exceeding the guidance on the top-line. In detail:

FY24p sales increased by 112% YoY to CHF 13.1m (eNuW: CHF 12.8m; eCons: CHF 12.8m), slightly ahead of the company’s guidance of CHF 12.9m. The strong top-line growth was driven by a combination of solid organic momentum and the full-year contribution from prior acquisitions completed in 2023 (Socialwave, Netopsie, KADSOFT & T2), underscoring the scalability of Swissnet’s platform and the successful integration of acquired entities. Notably, SaaS revenues rose 55% yoy to CHF 7.0m, while hardware sales surged 270% yoy to CHF 6.1m. Recurring revenues comprised ~77% of total sales, highlighting the strength and visibility of the group’s business model

Accordingly, FY24p adj. EBITDA improved significantly to CHF 2.5m (eNuW: CHF 2.5m; eCons: CHF 2.4m), compared to CHF -0.4m in FY23, thus implying a margin of 19.2%. This arrived predominantly on the back of scale-driven operating leverage as well as realized synergies stemming from previous acquisitions. Notably, FCF came in much stronger than expected at CHF 2.6m (eNuW: CHF -0.5m, eCons: CHF 0.3m), highlighting the company’s cash conversion ability.

Pro-forma result sets the stage. On a pro-forma basis, accounting for the full-year contribution of Swissnet AG (incl. Swissnet ICT), the Group would have generated CHF 21.0m revenues (+25% yoy) and CHF 4.4m EBITDA (+438% yoy). These figures represent the baseline for FY25e comparables, further supported by a high degree of operating leverage and synergy realization in the post-merger structure. Against this backdrop, management’s guidance of CHF 26-28m sales (eNuW: CHF 26.5m, eCons: CHF 27.1m) and c. CHF 6m adj. EBITDA (eNuW: CHF 6.1m, eCons: CHF 6.2m) appears reasonable.

On top of the strong preliminary release, recent contract wins (e.g., CHF 1.2m IoT deal with a tobacco multinational, €6.2m infrastructure contract with a European drugstore chain) and expansion into Morocco with Aleph Hospitality added further momentum, which has not yet materialized in the share price, visible in the undemanding valuation of only 4.4x EV/EBITDA FY26e.

Reiterate BUY with an unchanged € 20 PT based on DCF.