AutoStore Holdings Ltd (FRA:1IG) Q2 2025 Earnings Call Highlights: Navigating Market Challenges ...

Revenue: $134 million, up 56% sequentially, but down 13% year-over-year. Order Intake: $150 million, a 6% increase both sequentially and year-over-year. Gross Margin: 69%, or 75% excluding an $8.5 million write-down tied to the B1 Robot. Adjusted EBITDA Margin: 48%, returning to historical levels. Order Backlog: $529 million, up 3% sequentially. Cash Position: Closing cash at the end of June was $300 million. Net Debt: $150 million. New Bank Facilities: Secured a fully underwritten $500 million five-year bank facility.

Warning! GuruFocus has detected 5 Warning Sign with FRA:1IG.

Release Date: August 14, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

AutoStore Holdings Ltd (FRA:1IG) reported a sequential revenue increase of 56% in Q2 2025, marking a recovery from a weak Q1. The company achieved a gross margin of 75% when excluding an $8.5 million write-down tied to the B1 Robot, indicating strong operational discipline. AutoStore Holdings Ltd (FRA:1IG) has realized $10 million in annualized cost savings by reallocating investments towards high-growth initiatives. The company has launched 10 new products and features in under 12 months, enhancing its competitive edge and market opportunity. AutoStore Holdings Ltd (FRA:1IG) secured a fully underwritten $500 million five-year bank facility, providing financial flexibility and stability.

Negative Points

Q2 2025 revenue was down 13% compared to the same period last year, reflecting ongoing caution and hesitation in the market. Order intake growth was modest, with a 6% increase both sequentially and year-over-year, and was flat when adjusted for currency effects. The B1 Robot business line was phased out, resulting in an $8.5 million inventory write-down. North America and Asia Pacific markets remained weak, with no significant revenue recovery reported in Q2 2025. AutoStore-as-a-Service revenue recognition is delayed, with no revenue from this model recognized in Q2 2025, impacting short-term financial results.

Q & A Highlights

Q: Can you explain the impact of currency fluctuations on your order intake and how it affects your financial results? A: Paul Harrison, CFO, explained that the order intake was $150 million, including favorable currency effects of $22 million quarter-on-quarter and $23 million year-over-year. Adjusting for the currency tailwind, the development is broadly flat. The weaker US dollar primarily influenced this, and they have been transparent about the favorable impact of currency on order intake.

Story Continues

Q: How is the AutoStore-as-a-Service model performing, and what are its financial implications? A: Paul Harrison, CFO, noted that the AutoStore-as-a-Service model is gaining traction, particularly in the 3PL market. They have shipped products to secure $34 million in future revenue, which will be recognized over the contract period of three to eight years. The model is economically attractive, moving into profitability early to mid-stage of the contract term.

Q: What is the outlook for North America and Asia Pacific markets, and when can we expect a recovery? A: Mats Vikse, CEO, mentioned that North America shows positive developments in order intake and leading metrics, especially after clarity on tariffs. However, revenue has not yet materialized. Asia Pacific remains flat, but North America is seen as a large growth opportunity moving forward.

Q: How does the AutoStore-as-a-Service model affect your relationship with partners, and what feedback have you received? A: Mats Vikse, CEO, stated that the model is designed to be beneficial for partners, aligning with their business models. They have onboarded major partners to drive adoption in relevant markets. The model is seen as a win-win strategy, benefiting AutoStore, partners, and customers.

Q: Can you provide insights into the gross margin trends and expectations for the future? A: Paul Harrison, CFO, indicated that the gross margin, excluding the B1 write-down, was 75%. However, he advised modeling forward with margins in the early to mid-70s due to potential fluctuations in commodity prices and other market factors.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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