The Netgem Board of Directors has approved the accounts of the 2023 financial year. The Group says its 2023 show “the acceleration of all profitability indicators”. The Board specifies its outlook for 2024:

• Positioning refocused in the market for video entertainment technological services and solutions (‘Entertainment Tech’),
• Balance sheet able to finance its strategy of innovation and targeted external growth,
• Proactive approach to social and environmental responsibility,
• Objective of 10 per cent growth of its recurring revenues in 2024, with an improvement in profitability and cash flow generation indicators.

Highlights 2023

Netgem says it is now firmly positioned in the digital entertainment services and technologies market. The strategic and operational achievements of 2023 have consolidated this ‘Entertainment Tech’ positioning, expanding the potential of Netgem, and opening up to markets other than the traditional one of telecom operators:

• The sale of the Fibre activity which seals the Group’s exit from B2C telecoms activities;
• The acquisition of the Eclair companies in July which consolidates the diversification of services to French and international content publishers and contributes €2.5 million to revenues (including €1.3 million to recurring revenues);
• Development of the offer cloud gaming giving an additional dimension to the Netgem platform;
• The simplification of the Group’s scope with the acquisition of minority shareholders in the subsidiary Vitis (consequently renamed Netgem France);
• A private placement of €5 million, subscribed in particular by the Cash register Deposits which today holds more than 7 per cent of the capital of Netgem.

The revenues for the 2023 financial year amount to €35.6 million (-2 per cent) and the gross margin to €22 million (+10 per cent). Recurring revenues amount to €22.3 million, up 55 per cent compared to the previous financial year, reflecting the positive dynamic of on-board growth. If the increase in recurring revenue, a source of growth for the future, has not entirely compensated in 2023 for the expected decline in non-recurring revenues, the on-board growth is in a positive dynamic as illustrated by the progression of the subscriber base (up 33 per cent over the financial year), with at the end of 2023 more than 677,000 netgem.tv subscribers, managed on behalf of around twenty fixed telecommunications operators in Europe.

EBITDA increases by 14 per cent, going from €6.8 million in 2022 to €7.8 million in 2023 thanks to the combined effects of gross margin growth and control of operational costs. Current operating income is clearly improving, becoming positive in 2023 to reach €0.4 million compared to a loss of €2.1 million in 2022. This positive result is linked both to the growth in Ebitda but also to the drop in depreciation charge.

The operating income is also improving and amounts to €0.3 million over the past financial year against a loss of €2.2 million over the previous financial year. Finally, the Group’s net income, also up, amounts to €0.5 million for the year compared to €0.1 million in 2022.

Perspectives for 2024

Netgem has confirmed its recurring revenue growth objective of around 10 per cent in 2024

This growth will be supported by all of the Group’s activities, in France and internationally, and in particular by the prospects of gaining new customers thanks to new products launched in 2023 in the areas of cloud gaming and FAST channels aimed at telecom operators, and new media clients through the Eclair Preservation by Netgem and Eclair Valorisation by Netgem product lines.

Netgem successfully launched in March 2024, with the operator Zeop, and in partnership with Gamestream, the first service that unifies TV, streaming and cloud gaming.

The Group also intends to continue the simplification of its organisation, particularly following the changes in scope that occurred in 2023, leading to a reduction in its overheads as soon as 2024. The Group says it should therefore further improve its profitability and cash flow generation indicators in 2024.

It has thus given itself the means to also pursue an acquisition policy which will allow it to further strengthen its position in its digital entertainment technology market.

Mathias Hautefort, CEO of Netgem, commented: ”The operations of the past year have placed us firmly in the market for technologies and services to the video entertainment industry. Our business is profitable, debt-free and has excellent visibility thanks to the strong recurrence of our revenues. The reduction in our capex in the Telecom (IPTV) segment will allow us to generate increasing free cash flow in the coming years. Our priority is to reinvest these cash flows in accelerating our growth, either endogenous or through external growth”.

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Tags: cloud, gaming, netgem