Toronto, Ontario--(Newsfile Corp. - April 15, 2025) - NTG Clarity Networks Inc. (TSXV: NCI) (OTC Pink: NYWKF); NTG Clarity ("NTG" or the "Company") today reports its fourth quarter and year end results for the fiscal year ended December 31, 2024 (all figures in Canadian Dollars).
Full Year Highlights
All comparisons below are to the year ended December 31, 2023, unless otherwise noted
- Revenue grew 102% year-over-year to $56.1 million, driven by strong customer retention of over 90%1, with 54% of customers expanding their services2 and a 25% increase in total customer count3.
- Gross Profit increased 137% to $20.8 million, representing 37% of revenue, compared to $8.8 million and 32% in the prior year. Margin expansion was driven by a higher mix of offshore revenue.
- Net Income rose 326% to $9.9 million, or 18% of revenue, up from $2.3 million or 8% a year ago. The increase reflects both improved gross margins and the operating leverage of the Company's scalable model.
- Adjusted EBITDA grew 294% to $12.3 million, or 22% of revenue, compared to $3.1 million or 11% of revenue in the prior year.
- Operating Cash Flow of $2.6 million.
- Free Cash Flow of $1.6 million.
"2024 has been a transformative year for NTG. Decades of strategic investment aligned with strong market tailwinds to deliver exceptional results. We grew revenue by 102% year over year and increased net income by 326%," said Adam Zaghloul, Vice President of Strategy & Planning at NTG Clarity. "These results are a testament to our incredible team, who continue to deliver outstanding value for our customers. The impact is clear in our KPIs-customer retention exceeded 90% in 2024, and more than half of our customers expanded their engagement with us."
"We also saw meaningful growth driven by our referral network, which contributed to a 25% increase in customers. Importantly, 2024 is just the beginning. We're in the fortunate position of being insulated from tariff-related uncertainty, and we continue to benefit from the macroeconomic tailwinds fueling digital transformation. Our clients are recognizing the value we provide-reflected in the increasing size and duration of the contracts we're signing."
Outlook
Our 2025 guidance reflects our confidence in another year of meaningful growth, profitability, and cash generation. Our backlog now exceeds $105 million, with approximately $80 million of the backlog secured against three-year contracts. This visibility into future revenue along with our isolation from North American tarrifs and uncertainty gives us strong conviction in our outlook.
While Q4 2024 showcased the strength and profitability of our operating model, our 2025 Adjusted EBITDA guidance reflects a deliberate decision to provide ourselves flexibility to reinvest in the business. We are prioritizing strategic investments in hiring, training, and operational scale to support and accelerate sustainable long-term growth.
Financial Outlook for 2025
- Revenue: Expected to be around $75 million
- Adjusted EBITDA Margin: Forecasted in the range of 16% - 20%
In 2025 our strategic priorities are:
- Expand and solidify our position as an integral part of clients' long-term digital strategy, leveraging our superior cost structure, quality offerings, and trusted relationships built over multiple years of service.
- Win new customers through the expanding network effect of recommendations from current and past clients.
- Increase adoption and traction of NTG Apps, positioning them as essential tools within our clients' digital ecosystems.
Conference Call Details
On Wednesday, April 16, 2024, at 11:00 AM ET, management will host a conference call webcast to discuss the Company's financial and operating results.
What: NTG Clarity Year End 2024 Earnings Call
When: Wednesday, April 16, 2024, at 11:00 AM ET
Where: Live webcast can be accessed from the Events page of NTG's website: https://ntgclarity.com/events/q4-and-year-end-2024-earnings-conference-call-ntg-clarity/
Management will be hosting a Q&A at the end of the call; however, to streamline the earnings conference call, we ask any questions to be emailed along with the asker's name and company, if applicable, by the end of the day Tuesday, April 15, 2024, to:
Adam Zaghloul, Vice President, Strategy & Planning
Email: adam@ntgclarity.com
Income Statement Highlights for the Year Ended December 31, 2024 and 2023
| December 31, 2024 | December 31, 2023 | |||||
| REVENUE | $ | 56,126,751 | $ | 27,728,117 | ||
| COST OF SALES | 35,279,794 | 18,926,200 | ||||
| GROSS PROFIT | $ | 20,846,957 | $ | 8,801,917 | ||
| Operating Expenses | 8,504,817 | 6,628,123 | ||||
| Other Expenses | 2,530,010 | 464,083 | ||||
| Exchange loss (gain) on translation | (43,422 | (606,024 | ||||
| Comprehensive Income | $ | 9,855,552 | $ | 2,315,735 | ||
| per share (basic) | $ | 0.23 | $ | 0.01 | ||
| per share (fully diluted) | $ | 0.20 | $ | 0.01 | ||
Balance Sheet Highlights
| December 31, 2024 | December 31, 2023 | |||||
| Total Assets | $ | 28,292,859 | $ | 12,456,036 | ||
| Total Liabilities | $ | 15,691,675 | $ | 15,693,179 | ||
| Shareholder's Equity | $ | 12,601,184 | $ | (3,237,143 | ) | |
Non-GAAP Financial Measures
NTG references Adjusted EBITDA, which is a non-IFRS (non-GAAP) measure and Adjusted EBITDA margin, which is a non-GAAP ratio. Adjusted EBITDA means adjusted earnings before interest, taxes, depreciation and amortization. EBITDA is equal to net income (loss) before income taxes plus finance costs plus depreciation. Adjusted EBITDA is equal to EBITDA before other discretionary expenses and expenses outside of the control of NTG. In NTG's case these are other income, share-based payments, and expenses related to foreign exchange. Adjusted EBITDA margin is Adjusted EBITDA as a percentage of total revenue.
Adjusted EBITDA and Adjusted EBITDA margin are not recognized measures under IFRS. Management believes that in addition to net income (loss), Adjusted EBITDA and Adjusted EBITDA margin are useful supplemental measures as they provide an indication of the results generated by the Company's primary business activities prior to consideration of how those activities are financed, amortized, or how the results are taxed and consolidated in various jurisdictions and currencies as well as the cash generated by the Company's primary business activities without consideration of the timing of the monetization of non-cash working capital items.
NTG also references Free Cash Flow, which is a non-IFRS (non-GAAP) measure. Free Cash Flow means cash provided by operating activities less capital expenditures. In NTG's case, Free Cash Flow is equal to net cash from operating activities as reported in the consolidated statements of cash flows, reduced by the purchase of property and equipment.
Free Cash Flow is not a recognized measure under IFRS. Management believes that in addition to net cash from operating activities, Free Cash Flow is a useful supplemental measure as it provides insight into the cash generated by the Company's primary business activities after funding required capital expenditures, and it reflects the Company's ability to pursue strategic growth, repay debt, or return capital to shareholders.
Readers should be cautioned, however, that Adjusted EBITDA and Adjusted EBITDA margin should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of the Company's performance. Neither should Free Cash Flow be construed as an alternative to net cash from operating activities as determined in accordance with IFRS as an indicator of the Company's performance. The Company's method of calculating Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow may differ from other organizations and, accordingly, Adjusted EBITDA, Adjusted EBITDA margin, and Free Cash Flow may not be comparable to measures used by other organizations.
The non-IFRS measures referenced in this release reconcile to the IFRS measures reported in the Consolidated Financial Statements as follows, unless reconciled elsewhere:
| For the three months ended | For the twelve months ended | |||||||||||
| Adjusted EBITDA | December 31, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||
| Net Income (Margin) | $ | 2,980,357 (17%) | $ | 469,848 (6%) | $ | 9,855,552 (18%) | $ | 2,315,734 (8%) | ||||
| Add back: | ||||||||||||
| (Gain) loss on foreign exchange | (574,477 | ) | 345,818 | (563,595 | ) | 583,000 | ||||||
| Depreciation | 322,577 | 83,894 | 478,193 | 165,782 | ||||||||
| Amortization | 132,183 | 122,033 | 528,733 | 421,218 | ||||||||
| Interest, net | 191,305 | 128,236 | 435,332 | 378,985 | ||||||||
| Taxes | 513,700 | 11,563 | 810,636 | - | ||||||||
| Other income | (222,226 | ) | (252,308 | ) | (436,147 | ) | (252,308 | ) | ||||
| Share-based payment | 401,281 | 25,750 | 974,266 | 104,250 | ||||||||
| Loss on joint venture | 267,730 | 0 | 267,730 | 0 | ||||||||
| Loss on disposal of assets | 0 | 9,390 | 0 | 9,390 | ||||||||
| Exchange (gain) loss arising on translation of foreign operations | 310,525 | (1,334,454 | ) | (43,422 | ) | (606,024 | ) | |||||
| Adjusted EBITDA (Margin) | $ | 4,322,955 (25%) | $ | (390,230) (-5%) | $ | 12,307,278 (22%) | $ | 3,120,027 (11%) | ||||
| For the twelve months ended | ||||||
| Free Cash Flow | December 31, 2024 | December 31, 2023 | ||||
| TOTAL CASH IN-FLOW FROM OPERATING ACTIVITIES | $ | 2,572,960 | $ | 1,862,379 | ||
| Less: | ||||||
| Purchase of property, plant and equipment | 967,622 | 689,149 | ||||
| Free Cash Flow | $ | 1,605,338 | $ | 1,173,248 | ||
- Customer retention based on customers as of the twelve months ended December 31, 2024. Customer defined as accounts spending more than $100,000 in a year.
- Calculated as % of total customers that spent more with NTG through the twelve months ended December 31, 2024, compared to prior year period. Customer defined as accounts spending more than $100,000 in a year.
- Customer defined as accounts spending more than $100,000 in a year. Increase in number of customers as of the twelve months ended December 31, 2024, compared to prior year period.
About NTG Clarity Networks Inc.
NTG Clarity Networks' vision is to be a global leader in digital transformation solutions. As a Canadian company established in 1992, NTG Clarity has delivered software, networking, and IT solutions to large enterprises including financial institutions and network service providers. More than 1,000 IT and network professionals provide design, engineering, implementation, software development and security expertise to the industry's leading enterprises.
For Further Information:
Adam Zaghloul, Vice President, Strategy & Planning
NTG Clarity Networks Inc.
Ph: 905-305-1325
Fax: 905-752-0469
Email: adam@ntgclarity.com
Forward Looking Information
Certain statements in this release, other than statements of historical fact, are forward looking information that involve various risks and uncertainties. Forward looking information includes, but is not limited to, statements with respect to: 2025 financial guidance including anticipated revenue and adjusted EBITDA margin; anticipated activity levels and operating results; projections based on current backlog; corporate strategies; customer demand and competitive conditions in the markets in which the Company operates.
Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: future demand for the Company's products and services; the results of research and development activities; access to capital; intellectual property protection; general business, economic, competitive, political and social uncertainties; delays in obtaining governmental approvals; failure to obtain regulatory approvals; reliance on key personnel; stock market volatility; fluctuations in interest rates and exchange rates; and the impact of new laws and regulatory requirements. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.
This press release contains future-oriented financial information and financial outlook information (collectively, "FOFI") about estimated annual revenue and adjusted EBITDA margin, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set out in the above paragraph. The actual financial results of the Company may vary from the amounts set out herein and such variation may be material. NTG and its management believe that the FOFI has been prepared on a reasonable basis, reflecting management's best estimates and judgments. However, because this information is subjective and subject to numerous risks, it should not be relied on as necessarily indicative of future results. Except as required by applicable securities laws, the Company undertakes no obligation to update such FOFI. FOFI contained in this news release was made as of the date hereof and was provided for the purpose of providing further information about the Company's anticipated future business operations on an annual basis. Readers are cautioned that the FOFI contained in this news release should not be used for purposes other than for which it is disclosed herein.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/248479
SOURCE: NTG Clarity Networks Inc.
