Beam Communications Holdings (ASX: $BCC) Q4FY24 update

Beam Communications Holdings Ltd (ASX: $BCC) has reported a positive free cash flow (FCF) of $0.5 million for the fourth quarter (Q4) of the financial year 2024 (FY24). The company's total revenue in Q4 was $6.8 million, which was 34% below the previous corresponding period (PCP) due to lower hardware sales, including the run-off profile for Iridium GO! exec. However, annualised subscription revenue has seen a significant increase, reaching $3.2 million, up 44% from FY23. Additionally, ZOLEO's royalty revenue has surged by 41% compared to the previous year, demonstrating strong subscriber and usage metrics.

Executive commentary on Q4 performance and outlook

Managing Director, Michael Capocchi, commented, 'Q4 delivered positive free cash flow as expected. Working capital improvements, a sustained focus on disciplined capex investments, and further growth in subscription revenue contributed to a stronger free cash flow result. Our solid balance sheet and the underlying cash flow generation of the business enabled us to fully fund the ZOLEO arbitration from cash reserves. We are looking forward to refocusing the business in FY25 as we finalize the arbitration and assess any associated opportunity. Beam will share further insights on the outlook for FY25 around the time of the full year results update, late next month'.

Summary of Q4FY24 performance and outlook

Beam Communications Holdings Ltd has demonstrated a strong finish to FY24, delivering a positive free cash flow of $0.5 million in Q4. The company's annualised subscription revenue has surged by 44% from FY23, reaching $3.2 million, showcasing robust growth in this segment. Despite a 34% decline in total revenue in Q4, the company's focus on efficiency and effectiveness of the capex program has resulted in 4 consecutive quarterly reductions in spend, with Q4 65% below the PCP. The heightened focus on disciplined capex investments and sustained growth in subscription revenue have contributed to the positive free cash flow result. The company's solid balance sheet and cash flow generation have enabled it to fully fund the ZOLEO arbitration from cash reserves. Looking ahead, Beam Communications Holdings anticipates refocusing the business in FY25 as it finalizes the arbitration and assesses associated opportunities. The company plans to share further insights on the outlook for FY25 around the time of the full year results update, late next month.