Hurco Companies’ QQ2 2024 results show a meaningful shift in profitability despite a modest sequential revenue uptick. Revenue for the quarter ended 2024-04-30 was $45.17 million, up slightly QoQ from Q1 but down 16.07% year over year. Gross profit totaled $7.38 million, yielding a gross margin of 16.3%, while operating income declined to -$4.08 million and net income was -$3.92 million, or -$0.60 per share. The coda of the quarter’s performance is a negative EBITDA of -$2.86 million and a net margin of -8.68%, signaling that fixed cost absorption remains a challenge in a softer demand environment.
Against the backdrop of negative profitability, Hurco generated operating cash flow of $1.88 million and delivered free cash flow of approximately $1.40 million, aided by favorable working capital movements (cash inflows from working capital changes of $4.07 million, including receivables inflow of $5.71 million and a smaller payables increase). The company finishes QQ2 with a robust liquidity position: cash and cash equivalents of $37.54 million and a net cash position of about $25.70 million (net debt of -$25.70 million), supporting optionality to weather downturns or opportunistically invest in product development and services.
From a balance sheet perspective, Hurco remains financially solid, with total assets of $280.83 million and total stockholders’ equity of $215.58 million. The balance sheet shows a heavy inventory balance of $163.81 million, which, combined with an elevated accounts receivable level, underscores the need for inventory and working capital optimization as demand normalizes. While revenue and earnings are pressured this quarter, the company’s liquidity resilience and absence of material debt maturities provide a runway to navigate a potentially protracted macro and demand cycle. Investors should monitor how the company manages backlog conversion, pricing, and cost control to translate the cash generation into improved profitability going forward.