Cubic Telecom reaches break-even as revenues nearly double

Cubic Telecom, whose software is installed in millions of cars globally, reached break-even in 2019 after revenues almost doubled to €38.2 million from €19.8 million a year earlier.

The company, which has raised over €100 million in funding since it was founded in 2005, reported a €1,753 pre-tax loss, down from €12.6 million in the prior year. Earnings before interest, taxes, depreciation, and amortisation (ebitda) before a share-based payment charge was €5.2 million as against a €9 million loss a year earlier.

Cubic has seen revenues surge in recent years, having climbed from just €8.3 million in 2017.

The company said nearly €37 million of its 2019 sales were to the Volkswagen Group, whose subsidiary Audi is a shareholder in Cubic. This compares to sales of €18.5 million to the car manufacturer in 2018.

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The gross margin percentage rose from 42 per cent to 67 per cent in 2019 due to a mix of data costs and increased date volumes, Cubic said.

Cubic develops mobility solutions for Internet of Things, machine-to-machine and device-manufacturing companies. The group's technology allows car manufacturers in particular to update mapping and engine software with wireless upgrades that reduces visits to dealerships. Its solutions are installed in more than 2.5 million cars across 50 countries, with clients that also include Skoda and Panasonic.

Cubic said it expected the coronavirus pandemic to impact on 2020 financial results, but said it was not likely to affect the group’s liquidity or ability to continue in business.

“As economies begin to emerge from their self-imposed lockdowns, automotive data consumption and new car registrations are increasing from the lows seen initially, and the directors are hopeful that the negative impact on the group’s revenues will therefore be short-lived and limited,” directors said.

Cubic, which is led by Barry Napier, has raised over €100 million to date from backers that also include chip-manufacturer Qualcomm, the Ireland Strategic Investment Fund, Enterprise Ireland and Dublin-based Act Venture Capital.

The company secured a further €11 million in funding from Act in January 2020. It also said it had drawn down €7 million of a €23.5 million European Investment Bank-provided credit facility as of the end of August 2020.

Cubic employed 145 people at the end of 2019, up from 124 a year earlier. Headcount has since risen to about 200, although the company recently made a small handful of redundancies.