Okay, sorry. Welcome, everyone. So we did have another wonderful and exciting year where we started 2024 off with an excellent result for Quarter 1, and it just confirmed our solidity of our fundamental business growth within all the financial indicators. And so please do remember that you do have a chance to ask some questions at the end of the session with the chat box just by clicking the Q&A button on the top right corner. And we'll be giving priority firstly to the non-anonymous attendees, and then we'll move on to the anonymous questions as well. And here with me, I have TXT Group CEO Daniele Misani.
Good morning.
And also we have Andrea Favini, the Investor Relations, who'll be going through the results and the Q&A at the end of the session.
Thank you, Sanela. Thank you for the introduction. So as said by Sanela, we recorded the first quarter of the year very positive, in line with the growth that we had last year, that is driven mainly by the organic growth and the synergies that we are putting from all the company within the TXT ecosystems. In terms of indicators, as said by Sanela, we had good results in all the overall financial indicators in our business. First of all, revenues that recorded EUR 67 million total revenue for the first quarter, with a growth of 28% with the same period of the last year. Of course, there are contributions coming from M&A, but there is a strong organic growth in many divisions that is 21.3%, very above also the expectation, driven by some factors that we will explain later.
This is 21% more than last year, more or less EUR 11 million more than the same period of the last year. In terms of profitability, we have sustainability also with respect to the last year, is more or less the same percentage of the last year. The total amount of EBITDA is EUR 8.8 million, that is equal to 13% of the total revenues. Looking to the contribution of the different divisions to the growth, so as said before, the overall is +28, is driven mainly and strongly from the Digital Advisory Division, that recorded a growth of 50% with respect to the first quarter of the last year. Let's say that this business is a service-based business. During the last year, we had a growth on the main projects in this area that also recorded a good result in Q4.
There is continuity in terms of project delivery that makes this division grow from EUR 8.7 million to EUR 9.9 million in one quarter. Strong contribution comes also from the Smart Solutions Division, so the product-based business that grew from EUR 11.5 million to EUR 12.5 million. This growth is both organic and there is also the contribution of the newly acquired business in North America in Montreal, in Canada, acquired in the last part of the last year. The Software Engineering Division, that is the bigger in terms of volume, recorded a growth from 38.8 to 44.7, so it's an overall of 23% year-over-year. The EBITDA value, also in this case, we keep, let's say, the performance, the profitability around 13% overall, continuing to invest, so we increase the investment also in research and development of our proprietary solutions. There is a growth in all the segments.
Particularly, there is a strong result in the Digital Advisory Division that improved the EBITDA margin, driven by the efficiency of the projects that ramp up from the beginning of the last year to the end of the last year. In this case, at the beginning of projects, you have the cost also related to hire people, train people, and so on. But today, we have already, let's say, set up a system that is also profitable and is continuing to grow. In terms of growth for the other division, also the division related to Smart Solutions increased the profitability in terms of volumes by keeping, let's say, the EBITDA margin due to the investment that we continue to do in our product lines and also in the business that is less mature.
So the Smart Solutions that are still at the beginning phase, so with a mid-long term, let's say, plan in order to make them more profitable. In terms of profitability of the overall Software Engineering Division, we keep the margins growing from EUR 4.5 million to EUR 5.2 million due to the increase of volumes in this area. As said before, we continue to invest because our solutions are vertical solutions driven by technology. New technologies require investments in order to increase, let's say, functionalities and increase, let's say, market shares in this kind of domain. The total investment in R&D is EUR 3.3 million with a growth of 50% with respect to the last year, entirely expended in our, let's say, profit and loss and balance sheet. The Smart Solutions revenues are strategic, it's EUR 12.5 million in growth of 34% with respect to the last year.
This means that investments we are doing are bringing value to the overall business of the TXT Group. International revenues are EUR 18.1 million, that is 27% of the total, driven also by contributions coming from the new business in North America. So we are growing, and for us, it's strategic to keep a percentage of our total revenues also for the international business. And in terms of that, we recorded an improvement. We did, let's say, not invest yet in M&A in the first quarter because we are working on several opportunities that were not closed in the first quarter. So the cash generator brings us to a total net debt adjusted of EUR 28 million. It's important to, let's say, highlight the fact that we are continuing with our buyback program.
So we are investing in acquiring treasury shares as far as today, to the quotation, at least the last few days because after the results, we had an improvement on the stock price, but we have EUR 27 million equivalent of value in treasury shares that we are planning to use them in order to continue our M&A plan in 2024. In terms of incidence of the core markets, a strong growth comes from the aerospace and defense industry. There is a growth year by year of 40% driven by, let's say, the service and the projects capability that we have and the contribution also and the growth of revenues coming from our Smart Solutions products that includes new products coming from the PACE team and the Canadian entity. Industrial automotive is also growing. 8% of the total revenue is increasing by 11% with respect to the last year.
Good result also in the banking and finance institution with our fintech offering with a +21%. Public sector, of course, that is linked to our digital advisory, let's say, business is the champion of the growth with +54%. 29% of the total revenues are related to the telco and media and gaming industry. Also in this, let's say, segment, we have a growth of 20%. Nevertheless, also the context that is quite complex in this period because there is an aggregation of big players. We have a strong positioning and we added also to this area, let's say, the offering coming from the acquisition of the last year of FastCode that is positioning in the cloud migration and the cloud application that serve, let's say, the data and telco industry. And so we recorded also a growth in this segment.
In terms of the main business evolution and events and highlight of the driver of the growth, so let's start with the digital advisory that is growing by organic growth, so growing in terms of projects, activities, and go-to-business, let's say, projects. There is a significant growth coming from the ramp-up of the business activities on the main contracts that we acquired in the past years, especially in the public administration domain. This organic growth, of course, is expected to stabilize because we ramp up with the team, even if we have still a good outlook in terms of new activities because the backlog value as far as today is more than EUR 100 million on a multi-year basis. Some relevant projects in this area are related to the transformation and data migration, data quality, and the transformation of processes for the main ministry in Italy.
In particular, we have activity with the Ministry of Environment and Energy and Security for which we are, let's say, involved in a big project of management of environment and hydrological risk management and data and process optimization. We are working for the Polo Strategico Nazionale for the migration and tailoring of the system and the data management from, let's say, the local offices towards the decentralized and overall national hub. We are working for the Ministry of Health, also supported by the PGMD company expertise in this field in order to optimize data flow from the regions and to support strategic planning and the management of the overall national health services.
Of course, we are working on the backlog and the activities won in the past, but we are strongly active in acquiring new business with new tenders, either in the public segment, but also in the industrial segment or in the big institution at national level. We are expecting to close further, let's say, big tenders in the next months in order to continue to increase our backlog and have the sustainability of this business also during the next years. The other, let's say, focus on growth is the aerospace and defense market that is a segment in which there are a lot of investments and a lot of long-term projects. Our positioning in this market is solid. We have both the capability to work on complex projects driven by the new technology like artificial intelligence, virtual reality, that supports the systems of the future.
Of course, our positioning also with the portfolio of our Smart Solutions for the civil and the defense aviation is positioning us in order to have continuity for the next future. In particular, I want to highlight that the Smart Solutions offering recorded a +73% with respect to Q1 2023, coming from the organic business growth, in particular on the U.S. market for the airlines, where our FPO application, that is the application to optimize route and give sustainability for the aircraft of the future, is growing in terms of new licenses, new projects, and is increasing the market share in the segment of sustainability and fuel optimization. But also the other product lines are positioning very well and continue to grow.
There is also the new business that is positive coming from the acquisition we made in North America and Canada for the HMI embedded graphic business that outperformed with respect also to the, let's say, initial budget figures after the acquisition, thanks to the full integration in the PACE team in terms of my sales and market reach. And of course, the positioning, strong position in the U.S. market, especially on the defense segment, is a boost also to continue to grow and to continue to offer value also internationally with our proprietary solution. Also, the software engineering, I said that growth because we have strategic programs of the main OEMs and manufacturers in terms of new aircraft and new helicopters. And so we see a positive outlook in continuity also for the next periods.
Other highlights about the business are related to some of our, let's say, excellences in our Smart Solution portfolio. The Faraday solution, that is the artificial intelligence-based solution for compliance for the fintech market, preventively recorded, let's say, reached last year the breakeven. There is a strong growth in terms of annual recurrent revenues coming from the contracts signed in the past. And, let's say, this first quarter is positive with an EBITDA margin of about 20%. The volumes are still a little bit small with respect to the total of the group, but the positioning is very strategic. We signed a new deal at the beginning of the year with a primary and important leading domestic payment institution in order to bring our technology within their processes.
We also invested in continuing our diversification strategy also for the industrial, so the transformation and innovation of the manufacturer inside. We signed a partnership in the first quarter with Aras Corporation, that is a U.S. vendor of a PLM platform. We grew up with a team dedicated here in, let's say, in Italy to cover the European market. This, let's say, partnership is expected to bring value in terms of services and also projects and customization of subscription of the U.S. partner licenses within big customers in terms of manufacturing and industrial offering. Also, let's say, the telco and gaming segment, as I said before, that is a particular one because, as you know, here, especially in Italy, there is a consolidation of the main players in this segment.
In this area, we are working together with this customer in order to serve the market, and the focus is mainly on the, let's say, cloud and data management of application of, let's say, and let's say services across the cloud-based architecture. There is a growth significantly also in this area, driven and contributed also by the acquisition of FastCode last year, that is working in this area since a while. Also for the strategic position of Innova offering that is strong in the customer base and is diversifying also the offer in terms of the synergies coming from the group.
In particular, in this area, we signed in the first quarter an important multi-year contract with a lead provider of, let's say, in the gaming segment, lead provider Italian in the gaming segment for services in digital services that will cover and give continuity and sustainability and also risk balancing with respect to the overall context of this segment because it will allow us to continue to provide services with important volume also for the next year. These are the main updates. So, to sum up, we closed a very good first quarter and we have a good outlook in order to continue during the 2024 by providing value for our customer and, of course, for you all as shareholders. So, I will let introduce the financial part.
Yes, so we do have Andrea Favini, which is investor relations, and he'll be presenting the quarter one results.
Thank you so much, Sanela. Thank you, Daniele. And welcome everyone to the live financial section live from the Sunnybury League. So today we are starting from the profit and loss of the first quarter of the year and looking at the revenues, as what is discussed by Daniele. In the first quarter of 2024, revenue reached EUR 67.1 million with a growth of 28.3% compared to the first quarter of 2023. On a like-for-like basis, revenue grew by 21.3% with acquisition contributing for approximately EUR 4 million. Revenue reported in Q1 2024 included approximately EUR 3 million related to the resale of third-party software and hardware. And this activity had also a lower, let's say, gross margin compared to the average of the group.
And this is also leading, let's say, a slight decrease in the gross margin value that decreased from 34% in the first quarter of 2023 to 32.5% with a net decrease of 1.5 percentage points. If we look at the direct costs, the main growth in the direct costs is recorded in the research and development costs. Here, as already explained by Daniele, we, of course, are keeping the investment in our, let's say, material portfolio, but we are also investing in new technologies and in new smart solutions that will bring benefits and profits, let's say, in the future here. So it's also important to mention that within the growth of 51.2%, there is a strong contribution of technologies and businesses acquired in the last quarter of 2023.
In particular, the embedded graphic business, the artificial intelligence-based training provided by the PACE Canada company, and other solutions for which TXT invested during in the fintech domain, for example. Commercial costs instead recorded a lower growth at a lower rate, approximately 6%, but it's important to mention that investment in the commercial and the management structure of the group were already in place from 2023 to drive the growth of revenues that is then visible already from the first quarter of the current year. General and administrative costs also recorded a reduction in the percentage value against the revenues. In fact, in the first quarter of 2023, general and administrative costs were of approximately EUR 4.2 million with an incidence of 8% against revenues, while in the first quarter of the current year, the incidence of general and administrative is 7.3%.
So we have a 0.7 percentage point reduction as an incidence of general and administrative costs, which is mainly coming from the efficiency gain in the auditing structure and, let's say, the general services provided in a more efficient way. Looking at the EBITDA, it was equal to EUR 8.8 million in the first quarter of 2024, with an increase of 28.1% compared to the first quarter of 2023. And of course, this is already discounting, let's say, the strong growth that we recorded in the Smart Solutions, in the research and development for mature solutions products, which will bring, of course, we are positive that will bring a positive resale results already from this current year.
If you look at the EBIT of EUR 6.1 million, it discounts, let's say, the effect of amortization of intangible assets for EUR 1.1 million, of which EUR 0.9 million were related to the purchase price allocation in the context of the M&A plan initiated by the group in 2018. Also included within the amortization and depreciation, there are also, let's say, depreciation of tangible assets for approximately EUR 1.5 million, of which EUR 1.1 million were related to leases like IFRS 16. And then there is also impairment losses for EUR 0.1 million. So the EBIT, the operating profit, recorded an important growth to 6%, and the EBIT margin, the operating profit margin in the first quarter of 2024, reached 9.1% of revenues.
The net financial result in the first quarter of 2024 has a negative balance of EUR 0.4 million, in line with the negative net financial results in the same period of the previous year. Financial expenses in the first quarter of 2024 consist of EUR 1 million related to interest expenses and other bank charges, and EUR 0.3 million related to the share of negative results of associated companies that are not consolidated in the TXT profit and loss. The financial charges of the period are partially offset by financial income from the fair value of trading security added in the TXT portfolio of EUR 0.5 million, the fair value of the earnout paid during the period, EUR 0.1 million, and the effect of the net exchange rate differences for EUR 0.3 million.
If we look at the net profit, there is a strong growth of 41.2%, and the net profit margin is at 6.1% in the first quarter of 2024, up compared to the 5.6% recorded in the same period of the previous year. Tax rates remain constant at 28%. If we move to the net debt as of the end of March 2024, the net debt was equal to EUR 28.1 million. The adjusted net debt was equal to EUR 28.1 million, while the reported net debt was equal to EUR 45.9 million. A decrease of EUR 5.8 million compared to the EUR 31.4 million as of, sorry, to the EUR 41.7 million as of the end of December 2023.
And this, let's say, reduction of the net debt is made related to the cash generated from the operation of the group, partially offset by the outlay related to the purchase of treasury shares for approximately EUR 1.5 million. Main items of the net debt as of the end of March 2024 consist of cash of approximately EUR 41 million, with an increase of EUR 2.7 million compared to the year-end of 2023. There are trading securities at fair value of EUR 26 million as of the year-end of the first quarter of 2024, with an increase of approximately EUR 1.7 million compared to the year-end of 2023, mainly for the fair value evaluation of the securities. And the short-term financial debt instead is at EUR 55 million, with an increase of approximately EUR 2 million compared to the year-end of 2023.
If we look at the short-term financial position, it's positive as of the end of March 2024 by EUR 11.2 million, up EUR 6 million compared to the year-end of 2023. The non-current financial debt as of 31 March 2024 is EUR 57 million, and the net financial debt includes EUR 10.6 million of debt referred to IFRS 16, up EUR 0.5 million compared to EUR 10.1 million as of year-end 2023, and EUR 5.3 million of debt for earnouts and put call options for the purchase of minority interest, down EUR 1 million compared to the year-end 2023 affecting after, let's say, the outlay for earnouts that have been paid in the first quarter. If we compare the consolidated net reported financial debt against the adjusted net financial debt, the adjustment of EUR 17.8 million is related to the stake in Banca del Fucino, which is constant compared to the year-end 2023.
So the net adjusted financial debt is of EUR 28.1 million, down EUR 3.4 million compared to the net adjusted debt as of year-end 2023. If we look at the balance sheet for the period against the year-end 2023 in the next slide, exactly, so we have fixed assets that are of a total of EUR 130 million, pretty constant, steady compared to the year-end 2023, and within intangible fixed assets as of March 2024 of EUR 85 million, the main contribution is coming from goodwill for approximately EUR 65 million, and the customer relationship and IPs acquired in the context of M&A for approximately EUR 18 million. Reduction recorded in the period is to be attributed to the amortizations. Tangible assets as of March 2024 were EUR 21 million consisting mainly on hardware and building rental and lease contract of offices, car, and printing, following the adoption of the accounting standard IFRS 16.
Tangible fixed assets are up EUR 0.6 million approximately compared to the year-end 2023, following increased value of financial lease IFRS 16 recorded in the period. Other fixed assets consist mainly of the investment in Banca del Fucino for EUR 17.8 million, and the remaining value consists of investment in minority. Net working capital in the period is constant, so there is at EUR 40.3 million against the EUR 40.4 million as of year-end 2023, and if you look at the shareholders' equity, the increase of approximately EUR 5 million is related to the profit of the period and the net effect of the transfer and the repurchase of treasury shares.
If we then look at the performance of the TXT stock, the treasury shares, and the shareholding structure available from the next slide, we can see that the shareholding structure as of March 31, 2024, remains constant compared to the previous to the year-end of 2023, with the Laser line the share the let's say financial vehicle of the Chairman Enrico Magni owning approximately 30% of TXT, managers owning 15% of which the main component is our treasury share transfer in the context of the M&A plan initiated in 2018. Then there are IVO Global Asset Management with a stake of 3%, treasury shares are approximately at 10%, and then the market owning 42% TXT share stock.
If we look at the performance of the TXT stock, so compared to the share prices of 31 December 2019, which was equal to EUR 9.66 per share, the share prices of end of March 2024 was EUR 22.44 per share, and the market cap as of end of quarter 2024 was of more than EUR 260 million. In the first three months of 2024, the TXT share price recorded an official high of EUR 23.95 on March 25, 2024, and the low of EUR 18.48 per share on 5th of January 2024.
If you look at the dividend and the treasury share repurchases, the dividend of EUR 0.25 per share will be paid on May 22, so it's not visible from the chart, and the expected outlay will be of approximately EUR 3 million, while treasury shares as of 31 March 2024 were 1.2 million, representing approximately 9.4% of the issued shares, and the treasury shares were 1.3 million as of December 2023. The decrease of about 82,000 shares is to be attributed to the consideration paid in TXT shares in the context of the 2023 M&A plan, net of the shares repurchased in the context of the buyback plan.
So in the first three months of 2024, approximately 154,000 shares were transferred to the vendor and manager of TXT in the M&A plan, and about 72,000 shares were repurchased at the average price of 20.44 per share, for a total investment of approximately EUR 1.5 million as visible from the chart. And when we yes, of course, the dividends that were already resolved at a shareholders' meeting and communicated over the last conference were of EUR 0.25 per share, so the dividend yield of 1.3% on the price as of end of the year 2023. We are done with the financial part of this conference call. Thank you so much for your attention, and now is the Q&A section starting.
Thank you, Andrea. So I let Sanela, so please post any question on the Q&A section of the chat.
I'll let Sanela read the question, and we are very open to answer to our shareholders.
Thank you very much. So we'll start off with the first question by Alessandro Orsini from Horizon SCF. So thanks for the presentation. Is it possible to ask for this affirmation published in your press release? For the remaining nine months of the year, TXT's management expects top-line growth rates to stabilize at low double-digit levels. This affirmation is about quarter two, quarter three, quarter four 2023, or about the growth in the first quarter of 2024?
Okay, so we, let's say, expect, so the first quarter was very strong, strong in terms of organic growth driven, let's say, by the growth of the comparison of first quarter to the first quarter.
Of course, during the last year, we observed a strong growth driven by the projects that were ramping up during the year. So the affirmation that we put in the press release is more focused on the overall and the total growth of the year by considering the performances we had in the last year. So this kind of business, the service-based business, the project-based business is a business that ramps up with the growing of the projects and the, let's say, the status of the project that goes to the regime during the period. And so the expectation is that we will have still growth according to our, let's say, guideline, but of course, with respect to the first quarter, it will be a little bit lower because the first one, compared to the first one of the last year, is very strong.
I think that you have answered more or less.
Fantastic. And the next question we have is from Andrea Randone. The question is, if we assume a 10% organic growth in the period from April to December 2024, we can calculate a 14% organic growth in the full year of 2024. Is this calculation correct to represent the lower end of your full-year revenue expectations?
It's a long question, so we separate maybe the answer, otherwise it's a little bit difficult. So I think that the assumption made by Andrea is correct. Let's say our guidance is more or less in around 10% organic overall, let's say, in overall business at all. Of course, at the end of the year, the strong growth of the Q1 will contribute in order to have a better growth rate on an annual basis.
The calculation more or less around 15% with respect to the last year can be a good, let's say, a good target that we can reach given the growth that we had in the first quarter and the capability to continue to grow at 10%. So it's a correct assumption. Second point?
So the second point, what do you see in terms of a margin trend evolution, and what are the business areas you expect to drive margins up?
Y es, for this year, let's say, our guidance was to have a growth, a profitability margin around 14%. Let's say the outlook for the year is not to increase too much the percentage margin. Of course, by increasing the volume, we will increase the overall absolute value of the margins.
But still, we are investing because the ramp-up of the project implies costs in terms of training of people, recruitment of people. So to ramp up projects needs still investment in order to continue to grow. On the other side, there is also the need to continue to invest in technology. We have a portfolio of Smart Solutions that is quite different because we have more mature solutions like in the aerospace that are growing and they are positioning well in the market. But still, we are investing in the small business and technologies that will give, let's say, contribution to the overall EBITDA margin in the mid-term. So not in 2024, but from the 2025 more. We continue to invest in R&D.
As you noticed by our, let's say, data, we invested 50% more with respect to the last year, same period, because we strongly believe that our Smart Solutions portfolio is a very, let's say, portfolio of specialized solution. The technology of this solution is advanced. So we are speaking about artificial intelligence. So the age of the technology, so still investments are required. And so, let's say, the expectation of increasing of EBITDA margin should be, let's say, shifted for the next future in which we will have the contribution also of the Smart Solutions that are not yet, let's say, very profitable because of the investment we are doing.
Fantastic. And the third question, congratulations to the amazing organic growth rate in the first quarter 2024. Can you comment on cross-selling and upselling initiatives you're putting in place among your subsidiaries to achieve these results?
Yes, of course.
The growth is due to the, let's say, to the business of each company in our ecosystem that is growing on their vertical, let's say. But a very important and strategic point is the synergy, so cross-selling and upselling opportunity. Just to make an example, a concrete example, the Innova business that was focused mainly on the telco industry is in synergies together with the digital advisory, let's say, business for the public sector and the, let's say, the companies who participated by the government. Let's say we are speaking about the main institutions that are participated by the government for which, let's say, the market reach is based on tenders, public tenders.
The expertise and the know-how of this kind of, let's say, approach to the business coming from HSPI, that is our main digital advisory company, is making giving the opportunity also to Innova to offer the capabilities and the know-how that is within the Innova group also towards new market segments. So we acquired also a public tender for, let's say, an institution participated by the government, the Italian government, on a good, let's say, volumes that compensate maybe some slowdown for the market segment origin of Innova that was focused mainly on the telco operators that are today, let's say, under a change management process, let's say. So this is like an example, but there are other examples come from the integration of the new acquisition.
I said that the Smart Solutions offering for the Canadian entity in embedded graphics and the HMI for aerospace and aviation is working strongly together with the PACE team, especially in terms of, let's say, sales team. We joined and we merged. We opened up also offices in Far East, in Singapore last year in order to have the broader portfolio of offering offered by a single sales representative. So there are sales synergies that allow us to approach a broader market, let's say, number of possible targets by offering more with more Smart Solutions in our portfolio and more service capability opportunities. Also for the business, as usual, let's say, also historical, let's think about the quality assurance services related to the software quality assurance process that is a core competence in terms of the group since a few years.
Also in this case, we leverage, let's say, the positioning of the other company in the market, in different markets with respect to the original ones. So quality assurance was mainly focused on banking and financial institutions. Now, this kind of service is offered also to the industry in general. So manufacturing, I'm speaking about, is offered also to the telco industry in which we are pushing and we approached this market last year. And this is offered also to the public sector for which projects of quality assurance are now served by using the competencies and the companies that we have in our portfolio.
Okay, so we have another question from Andrea Randone. So software engineering, an important client used to be TIM, a company facing tough times. How have you achieved such a strong organic growth despite this factor?
Okay, let's say, the business, of course, one of the most important is Telecom Italia as a customer, as probably I said also in previous discussions or meetings with shareholders. We are working for Telecom Italia and we are working together with Telecom Italia towards end user, their customer. So offering services through Telecom Italia to end customer. Of course, this part is a bit, let's say, under pressure because the big change is coming from the customer itself, so that everybody knows. We have still a strong position in terms of services we offer that are in some part of the business of Telecom Italia that requires continuity. So we are, let's say, not recording growth with this kind of customer, but we are quite stable in our positioning.
The growth comes from the cross-selling of the competencies that we were offering to this kind of customers, also to the other customer in the overall group. And there is also the contribution of synergies coming from the competencies coming from the new company, for example, FastCode, that has a very good positioning for cloud application and data management that are also transferred to a broader customer base. So we recorded to this result thanks to this and thanks also to some activities that we were able to deliver coming from contracts we signed in the last year.
Right, and we have another question from Alessandro Orsini. Can you replace, please, the affirmations about EUR 2.7 million of amortization and depreciation? Where does that data come from?
Okay, so for this, to go deeper in terms of content of this topic, I will ask Andrea if you can address this topic about amortization and depreciation. Please, Andrea.
Sure, sure. So basically, we have these EUR 2.7 million of amortization, depreciation, and write-offs in the period first quarter 2024. And as also reported in the press release published yesterday, this includes intangible assets for EUR 1.1 million, out of which EUR 0.9 million are related to the purchase price allocation in the context of M&A. So basically, this goodwill allocated to customer relationships and IPs mainly that are then amortized over a period between 6 or plus years. So this is the intangible part, so the amortization part of EUR 1.1 million. Then we have the depreciation of tangible assets for an overall value of EUR 1.5 million, of which EUR 1.1 million are related to IFRS 16, so financial leases.
And then, we have the impairment losses, so write-offs of EUR 0.1 million. This is also reported in the press release, but if, of course, if further, let's say, clarification or details are required, I'm happy to further, let's say, follow up or discuss over this call.
Okay, so I don't, I don't see another question, Sanela.
Yeah, so we did receive some questions earlier on through an anonymous person. So, are there any updates about the last investment with Arcan Technology and Paladin AI? And is the investment in PayDo progressing as expected?
Yeah, okay. We are speaking about the investment we made last year in Smart Solutions and in technology. Let's start from Arcan Technology, that is an artificial intelligence-based platform in order to calculate technical debt on software.
Let's say this is the, we acquired the technology, so we are growing up in terms of market positioning and, let's say, sales pitch in order to reach the customer. We are investing in the platform, so it's still an entity that is, not a break-even, so it's still in the investment phase. Let's say, our strategy is to invest in order to capture, let's say, growth in the mid-long term. Let's say we signed an initial contract also to adopt this technology during due diligence phases for companies acquiring software from software companies in general because our tool is capable to analyze complex legacy software systems and, understand, let's say, the complexity and the technical debt related to this. So there is a possible channel to the market also for this.
So we have a good outlook in order to continue to invest to make it grow, but the benefit in terms of profitability will come next year on. In terms of Paladin AI, for example, that, let's say is the technology also based on artificial intelligence to map the skills of pilots during the training process. The technology, let's say, is quite mature with some initial customers. Now we are bidding with a defense player in order to use the technology within their own systems and to provide this technology, as integrated to the full solution of the customer. That is quite significant even in terms of volume. Of course, also in this case, it is a mid-long-term investment that positions us as a very strong player that enables, thanks to the technology, to change the processes of the customer.
Also in this case, we are still in the investment phase and the results will come in the near future. There was also some comment about PayDo that is the investment we made last year at the end of the year with initial minority shares and options. PayDo is addressing a good, let's say, moment in terms of sales pipeline and growth. Of course, we don't consolidate as far as today since we are in minority shares results of PayDo, but let's say the strong pipeline, signature of new contracts that are also, let's say, published across our channels in terms of press releases.
We think that it's another good asset that allows us to position, to have possible in the future recurrent revenues, and it's also a driver for synergies with other companies because it's positioned with big bank institutions at a high level and allows us to, present the overall offering to these customers. So also in this case, there is potential even if it's not consolidated in our results as far as today, of course.
Great. And so the last question we have, are there any news about the investment in Banca del Fucino?
Banca del Fucino, yes, so nobody was asking and now we are also addressing this topic. Banca del Fucino closed, let's say, the last year profit and loss balance sheet with a very positive result as is published on the main channels and is visible to everybody.
So we expect to have from Banca del Fucino a dividend coming to us in the very next future that is worth more or less EUR 350,000 that will be, let's say, will contribute as a positive effect in our, let's say, financial gain. As discussed also in the past, we are planning to sell this participation and we have and make, let's say, a statement because we have agreed with the bank itself that has a commitment to, let's say, let us sell at least half of the participation during this year. So we have a commitment and our plan is to monetize part of the participation during this year, during 2024, and by opportunity also to sell everything as soon as we have a good, let's say, also need for the cash in order to continue with our M&A plan. Okay.
Fantastic.
I think that's all the questions that we have for now.
Okay. Thank you, Sanela. Thank you, Andrea.
Thank you.
And to everybody because, you know, for us it's very important to communicate and to continue to share with you the results and, let's say, the background of the results itself. So thank you very much and see you soon to the next conference.
Thank you.
Thank you.