Fourth quarter 2023: Revenue growth slightly lower than estimated, operating profit at a record level

• Net sales increased 15.4 percent to EUR 59.3 million (EUR 51.3 million). The effect of exchange rates on the comparison period's net sales was EUR -1.2 million and at comparable exchange rates, net sales increased by 18.3 percent.
• Operating profit (EBITA) was EUR 25.9 million (EUR 18.8 million) or 43.8 percent (36.6 %) of net sales.
• Operating profit (EBIT) was EUR 23.9 million (EUR 16.8 million) or 40.4 percent (32.7 %) of net sales.
• Earnings per share were EUR 0.70 (EUR 0.53).

• Net sales increased 16,4 percent to EUR 180.7 million (EUR 155.3 million). The effect of exchange rates on the comparison period's net sales was EUR -2.8 million and at comparable exchange rates, net sales increased by 18.5 percent.
• Operating profit (EBITA) was EUR 55.4 million (EUR 42.2 million) or 30.6 percent (27.2%) of net sales.
• Operating profit (EBIT) was EUR 47.3 million (EUR 36.9 million) or 26.2 percent (23.7 %) of net sales.
• Earnings per share were EUR 1.40 (EUR 1.36).

The figures in brackets refer to the comparison period, i.e., the corresponding period in the previous year.  The percentage of change in net sales at comparable exchange rates is calculated by translating the net sales from the comparison period of 2022 with the actual exchange rates of the reporting period of 2023 and by comparing the reported net sales in 2023 with the calculated 2022 net sales at comparable exchange rates.

Key figures

[][][][]
EUR 1,000 10 10 Change, % 1-12/2023 1-12/2022 Change, %
-12/202 -12/202
3 2
Net sales 59,264 51,349 15.4 % 180,743 155,318 16.4 %
Operating profit 25,929 18,811 37.8 % 55,379 42,249 31.1 %
(EBITA)
EBITA, % 43.8 % 36.6 % 30.6 % 27.2 %
Operating profit 23,921 16,803 42.4 % 47,349 36,870 28.4 %
(EBIT)
EBIT, % 40.4 % 32.7 % 26.2 % 23.7 %
Return on 16.9 % 19.3 % 33.9 % 49.6 %
equity, %
Return on 17.6 % 16.2 % 35.6 % 41.5 %
investment, % 
Interest-bearing 20,513 28,159 -27.2 % 20,513 28,159 -27.2 %
liabilities [1]
Cash and cash 33,595  8,815 281.1 % 33,595 8,815 281.1 %
equivalents[1]
Net gearing, % -10.7 22.3 % -10.7 % 22.3 %
[1] %
Equity ratio, % 64.4 % 52.8 % 64.4 % 52.8 %
[1]
Earnings per 0.70 0.53 31.5 % 1.40 1.36 2.5 %
share (EPS), EUR
Diluted earnings 0.69 0.53 31.8 % 1.39 1.36 2.7 %
per share, EUR
Personnel, on 769 675 14.0 % 732 603 21.5 %
average

[1] At the end of the period

Juha Varelius, President and CEO

The fourth quarter of 2023 was the best in the company's history in terms of net sales and operating profit. Qt Group's net sales in October-December 2023 amounted to EUR 59.3 million, representing an increase of 15.4 percent when compared to the record-breaking fourth quarter of the previous year. At comparable exchange rates, net sales increased by 18.3 percent. Operating profit (EBITA) for the fourth quarter was 43.8 percent of net sales and amounted to EUR 26 million.

Net sales for the full year increased by 16.4 percent to EUR 180.7 million. At comparable exchange rates, net sales increased by 18.5 percent. Net sales from distribution licenses amounted to EUR 44.1 million in 2023, representing year-on-year growth of 49.5 percent. Net sales growth for the full year was negatively impacted by the deceleration of the consulting business and one-year developer licenses representing a higher-than-expected share of total sales. In spite of the challenges, Qt Group had a moderate year in the prevailing market conditions, and we achieved clear growth with regard to larger transactions in particular. Our growth has been strong in the automotive, consumer electronics, security, defense and aerospace, and industrial automation industries. The total effect of exchange rate changes fluctuations on net sales in 2023 was negative at EUR -2.8 million.

In October 2023, we published our new growth strategy that extends to 2027. Transforming into a multi-product company is at the core of our growth strategy. In addition to the existing Qt Development tools for development and design, we have developed our Qt Quality Assurance product portfolio. We want to be involved in quality assurance and testing in our customers' product development activities right from the first stages. We provide our customers with tools that solve even the most complex quality assurance needs, and we help them to produce higher-quality software following an even faster schedule and at lower costs throughout the product development process. 

The operating profit margin (EBITA %) was 30.6 percent, or EUR 55.4 million, in 2023. Our growth investments, especially in strengthening our sales and R&D organizations, were reflected in a substantial increase in the number of personnel. At the end of 2023, we had 775 employees, representing an increase of 12.6 percent compared to the end of 2022. 

The global economic situation and potential changes in the maturities of developer licenses will continue to be a source of uncertainty for Qt Group's short-term growth prospects. We have made strong progress in our transformation into a multi-product company, and are increasingly involved in improving our customers' productivity throughout the product development process, from UI design and software development to quality assurance and deployment.  Our ambition is to ensure that each of our products is independently competitive in the market. With our new products, we can also offer world-class solutions for product development processes that do not use the Qt development environment and tools.

Outlook for 2024

We estimate that our full-year net sales for 2024 will increase by 20-30 percent year-on-year at comparable exchange rates and that our operating profit margin (EBITA %) will be 25-35 percent in 2024.

News conference

Qt Group will hold an English-language news conference on February 16, 2024, at 12:30 EET at Sanomatalo in Helsinki, Finland, and as a webcast at www.qt.io/investors. CEO Juha Varelius and CFO Jouni Lintunen will present the results at the news conference. Analysts and investors can participate in the news conference in person or via conference call at https://palvelu.flik.fi/teleconference/?id=50048455.

Further information:
President and CEO Juha Varelius, tel. +358 9 8861 8040

Distribution:
Nasdaq Helsinki
Key media
www.qt.io