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Cluj-Napoca, November 14, 2024 – AROBS Transilvania Software (BVB: AROBS), the largest technology company listed on the Bucharest Stock Exchange, reports consolidated turnover of 306.2 million lei as of September 30, 2024, with an EBITDA of 43.4 million lei and a net profit of 16.1 million lei.
“If at the end of 2023 we anticipated potential stagnation in the automotive industry, by the end of the second quarter, the outlook began to suggest a downturn scenario, although the full implications were still unclear. Nevertheless, we responded promptly by implementing cost optimization measures and restructuring our organization, particularly in departments affected by reduced demand for our software services in 2024, and we significantly reduced group-level administrative costs. The results of these measures are already reflected in our Q3 2024 results. Through these measures, we continue to streamline internal processes and eliminate redundancies, thereby increasing operational efficiency. At the same time, instead of focusing exclusively on cost reduction, we ensure that savings are reinvested in innovation and enhancement of our services and products to consolidate our market position and remain competitive in the software services sector. Going forward, we are focused on integrating technologies that address our clients’ most pressing needs – cybersecurity, exponential technologies such as AI, RPA, and data engineering, as well as R&D,” stated Voicu Oprean, Founder and CEO of AROBS.
Regarding the performance of the Group’s business segments, the “Software Services” segment generated revenues of 245.6 million lei as of September 30, 2024, representing 80% of the total revenue. Although this segment saw a moderate decrease of 6% due to the challenging context of 2024, the company is confident that investments in cybersecurity and the integration of AI into its solutions will yield visible results in the near future.
Revenue from the second business segment, “Software Products,” grew by 14% compared to the same period last year, reaching 57.5 million lei as of September 30, 2024. This segment accounted for 19% of the total revenue. Growth in this segment highlights the importance of AROBS’s diversified business model with three business lines. The software products segment helps offset challenges in the services area, thus ensuring financial and operational stability.
The Integrated Systems segment, where AROBS recorded revenues of 3.1 million lei, remains impacted by the delay of essential projects, including those financed through the PNRR (National Recovery and Resilience Program), which is one of the main reasons for the decrease in total revenue this year. Although AROBS’s management initially expected these projects to be awarded in Q4 2024, currently, the company anticipates the projects be signed at the beginning of next year.
“In the third quarter of 2024, AROBS achieved both revenue growth and a significant improvement in profitability compared to the previous quarter, reaching a 15% EBITDA margin. Measures taken at the Group level led to an 18% reduction in personnel costs like-for-like compared to Q3 2023, amounting to 55.6 million lei, while a 13% decrease was also recorded compared to Q1 2024, when costs were 59.2 million lei. Meanwhile, sales and marketing expenses were reduced by 11%, down to 5 million lei, and general and administrative expenses decreased by 11%, reaching 16.2 million lei in Q3 2024, compared to the same period in 2023. Our ability to optimize expenses as of Q3 2024, in response to market downturn signals, confirms our adaptability to changing business environments as well as our financial discipline,” stated Bogdan Ciungradi, CFO of AROBS.
In terms of contributions from companies acquired by AROBS since 2021, as of September 30, 2024, the companies in the Software Services segment contributed 103 million lei to the Group’s revenue, compared to 86.7 million lei in the same period in 2023. For the Software Products segment, companies that joined the Group since 2021 contributed 6.4 million lei to the turnover, compared to 4.4 million lei as of September 30, 2023.
Considering the results recorded as of September 30, 2024, and the challenging context for the software services market, especially in the automotive industry, AROBS had to adjust its consolidated revenue and expense budget for the current year, as per the published report with the financial results as of September 30, 2024. Consequently, the Group expects the total 2024 turnover to reach 404.9 million lei, with a net profit of 18 million lei. AROBS is prepared for a strong recovery in 2025 and the following years.
“Although the impact on the net profit is significant, this decline does not affect our operations, as we have a solid liquidity position and a healthy balance sheet. The cost-reduction measures already implemented in this challenging year demonstrate our ability to manage challenges efficiently and flexibly. Compared to a year ago, when the company was not prepared for a crisis of this magnitude, we are now much better positioned and will end this year still profitable, demonstrating that our diversified business model is well-suited as it helps maintain operational stability even when two of our business lines experiences less satisfactory results. Regardless of developments in 2025, AROBS is now a more flexible, robust company with a committed and agile management, and our business model is sufficiently diversified to absorb the shocks experienced by certain economic sectors,” added Voicu Oprean.
AROBS Transilvania Software is listed on the Premium category of the Bucharest Stock Exchange Main Market as of September 25, 2023.
About AROBS Transilvania Software
AROBS Transilvania Software provides software services and solutions in various industries, having approximately 70 partners of the Software Services business line located in Europe and America and more than 11.000 clients of the Software Products business lines from Europe and Asia. AROBS is present in 11 locations in Romania and nine abroad, and over 1.300 AROBS specialists build solutions for the future in embedded – Automotive, Aerospace, Maritime, and Medical – as well as Travel Technology, IoT, Clinical Trials, Fintech, Enterprise Solutions, Cybersecurity, and Intelligent Automation.
More about the AROBS group: www.arobs.com and www.arobsgrup.ro
