Converge Technology Solutions Corp., a leading IT and Cloud Solutions provider, has announced a significant increase in cash generated from operating activities for the year-to-date period ending September 30, 2024. The company reported a rise of $97 million to $212 million, which has enabled continued net debt reduction and a return of $61.7 million in capital to shareholders.
In addition to the financial results, Converge also announced the completion of its Group CEO transition plan. Shaun Maine, the co-founder and former Group CEO, has stepped down from his position and the Board of Directors, effective immediately. Greg Berard, the current CEO of Converge, has been appointed as a member of the Board.
The financial highlights for the third quarter of 2024 showed a decrease in gross sales of $91.8 million or 8.9%, with organic growth in gross sales and gross profit at -8.4% and -7.3% respectively. Revenue decreased by $79.4 million or 11.2%, while gross profit decreased by 9.1% to $158.3 million, representing a gross margin of 25.1%. Adjusted EBITDA decreased by 22.2% to $32.1 million.
For the year-to-date period, gross sales increased by $55.4 million or 1.9%, with organic growth in gross sales and gross profit at 2.0% and -1.0% respectively. Revenue decreased by $142.8 million, while gross profit decreased by 1.6% to $512.8 million, representing a gross margin of 26.8%. Adjusted EBITDA decreased by 3.5% to $119.4 million. The net loss for the period increased by $160.6 million to $171.8 million, primarily due to a non-cash impairment charge on the Germany segment of $176.1 million.
Despite the challenging macroeconomic conditions that led to delays in hardware spending, Converge remains optimistic about closing the deals contributing to the gross profit shortfall in the fourth quarter of 2024 and 2025. The company continues to experience double-digit growth in strategic investment areas such as AI, cloud, and cybersecurity, driving growth in software and managed services revenue.
Converge’s strong cash flow generation reflects its financial strength, and the company is committed to a strategic and disciplined capital allocation approach. This includes targeted, high-impact growth investments while returning a significant amount of capital to shareholders.
In line with its commitment to shareholders, Converge declared a quarterly dividend of $0.015 per common share to be paid on December 28, 2024.
The company has provided financial guidance for the fourth quarter of 2024 and the fiscal year ending December 31, 2024.
The completion of the Group CEO transition plan ahead of schedule reflects the progress and success of Converge’s leadership team. The Board expressed gratitude to Shaun Maine for his visionary leadership since co-founding the company in 2017 and welcomed Greg Berard as the newest member of the Board.
Converge Technology Solutions Corp. is a services-led, software-enabled IT and Cloud Solutions provider that delivers industry-leading solutions to clients across various industries. The company offers advanced analytics, AI, application modernization, cloud platforms, cybersecurity, digital infrastructure, and digital workplace offerings, supported by advisory, implementation, and managed services expertise.