EKINOPS reported its consolidated revenue figures for the fiscal year ending on December 31, 2023, revealing the following key points:
- Total Revenue: EKINOPS reported a consolidated revenue of €129.1 million for the year 2023, marking a modest year-over-year increase of +1% compared to the previous fiscal year. When accounting for constant exchange rates, annual revenue showed slightly stronger growth at +2%. Fourth Quarter Growth: In Q4 2023, EKINOPS experienced a sequential revenue growth of +9% compared to the previous quarter, recovering from Q3 2023, which was the low point of the year. However, year-over-year, Q4 2023 revenue decreased slightly to €30.3 million from €31.5 million in Q4 2022, representing a quarterly decline of -4% (-3% at constant exchange rates). Optical Transport Success: EKINOPS saw substantial growth in its Optical Transport business line, with a +27% increase in revenue over the course of 2023. This growth was driven by successful implementations of Wavelength Division Multiplexing (WDM) solutions, particularly in France and EMEA (Europe – excluding France – Middle East and Africa). New customer wins, especially in Eastern Europe, contributed significantly to this success.
- Access Solutions Decline: In contrast, sales of Access solutions faced challenges in 2023, experiencing a significant decline of -15% over the year. This decline was particularly pronounced in the second half of the year, with a -25% decrease. Factors contributing to this decline included a slowdown in demand, increased caution among clients in making investments, high equipment inventories among major operators, and difficulties in securing financing sources for operators.
- Software & Services Growth: The share of Software & Services in EKINOPS’ revenue increased to 17% of the company’s total revenue for FY 2023, compared to 15% in the previous fiscal year. In H2 2023, Software & Services accounted for 20% of the company’s revenue. Revenue generated by Software & Services saw an impressive +12% growth over the full year, driven by network virtualization solutions, SD-WAN solutions, and associated services.
- International Expansion: EKINOPS recorded an +8% growth in international sales for the fiscal year 2023. In North America, revenue increased by +6%, reaching €31.7 million, despite a demanding comparison basis from the previous year. EMEA showed robust growth, with revenue in the region increasing by +23%. In contrast, Asia-Pacific experienced a substantial -63% decline in revenue.
- Domestic Market Performance: EKINOPS’ sales in its domestic market, France, decreased by -11% in 2023. Access equipment, the company’s core business in France, saw a -18% drop in sales due to the economic slowdown and high inventory levels at major operator customers. However, Optical Transport continued to perform well, with a significant +57% increase in sales over the year.
- EBITDA Margin Target : Despite challenging market conditions, EKINOPS confirmed its EBITDA margin target for 2023, aiming for a margin between 13% and 17%. The second half of 2023 was particularly impacted by adverse market conditions in the Access activity.
Didier Brédy, Chairman and CEO of Ekinops, said: “Changes in the economic climate during 2023, affecting company investment policies and health, penalized our Access business in the second half of the year. In contrast, we significantly outperformed the Optical Transport market, both in Europe and the United States. After the low point of Q3, our aim is to generate a higher level of revenue in H1 2024 than that of H2 2023. FY 2024 revenue should be driven by a rebound in Access equipment sales as the economy recovers, and by the launch of a major new optical transport product over the summer.
In terms of acquisitions, Ekinops’ management remains fully mobilized, and we aim to complete one or more transactions over the coming months, while favoring non-dilutive financing.”