• Positive adjusted free cash flow of $753K, up $1.1M over previous quarter
• Lower operating expenses and growth in recurring revenues and SatPhone Shop
• One-off costs of $3M for ZOLEO arbitration led to net operating cash outflow of $2.2M

Beam Communications Holdings Limited (ASX: BCC) has provided an overview of its activities and financial results for the three months ended 31 December 2024 (Q2FY25). The company recorded a net operating cash outflow of $2.2 million in the quarter due to $3 million worth of one-off costs relating to the ZOLEO arbitration process. Excluding these one-off costs, Beam would have recorded an adjusted net operating cash inflow of $757K and a positive adjusted free cash flow of $753K. This was driven by significant cost cutting and growth in the Core Beam business when compared to the previous quarter. Beam's recurring revenue jumped 36.4% over the previous corresponding period (PCP) to $854K, with both ZOLEO royalties and Airtime sales notching double-digit gains, while hardware sales from SatPhone Shop increased 12.5% PCP to $392K. Revenue from Beam's core business (sales of Beam-branded equipment and OEM devices excluding Zoleo) dipped 4.1% PCP to $6.6 million, but this is up 59.3% over Q1FY25 and the dip is due to the timing of some orders. Beam's cost rationalisation program is on track to deliver annual savings of circa $2.5 million, and further anticipated savings are expected from a new employment contract with the Managing Director. While Beam continues to face uncertainties and challenges under its transformation program, the company is forecasting a significant improvement in net operating cash flow in the current quarter from the cost savings, timing of new orders in Q3FY25 and the absence of one-off costs relating to the ZOLEO arbitration process.

Beam is anticipating a significant improvement in operating cash flow for Q3FY25 due to cost savings, timing of new orders, and the absence of one-off costs related to the ZOLEO arbitration process.