I will be your conference operator today. At this time, I would like to welcome everyone to the Asetek A/S first quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, we will have a question-and-answer session. If you'd like to ask a question at this time, simply press star followed by the number 1 on your telephone keypad, and if you'd like to withdraw that question, again, press star 1. If you would like to ask an online question, please type your question in the question box on the right-hand corner of your screen. Thank you. I will now turn the conference over to Peter Dam Madsen, Chief Financial Officer. Peter, you may begin.
Thanks, Krista. And thank you, everybody , for joining our Q1 2024 earnings calls. You got the instructions from Krista. I think we are good to go. My name is Peter Madsen. I'm the CFO. I have in the room here with me our CEO and founder, André Sloth Eriksen. Hi, André.
Hello. Good afternoon.
We will right away change the slides so that we go to the highlights.
All right. So a few bullet points about the first quarter of the year. Revenue of just shy of or just above $12 million. Gross profit around $5 million. And of course, an EBITDA close to 0 given the lower revenue. What we see is, and as expected, a continued low revenue visibility. And as always, and what the slide is showing, we have a high volatility between our quarters. So there's not anything new there. Going into the year, we see customers with elevated inventories, and that has clearly impacted the demand from them to us, and therefore also our revenue in the quarter, I would say, in the first two quarters. What we see in indications from both, let's say, the industry, peers, competitors, and customers is everybody expects an increased activity towards the second half of the year.
And, that's what I believe we're looking into as well. And therefore, jumping a few bullets, we also maintain the guidance for the full year. In terms of gross margins, we are looking at a group gross margin at 44%, same as the last quarter, or similar quarter last year. We have released a new customer, new OEM partner, TRYX, from China. I'll get back to that a little bit later. Next slide, please. So looking a little bit from the top and down, the last 12 trailing months, we've had a revenue of $74 million. And of that, we've invested 10%, sorry, in R&D. We have made roughly $34 million of gross profits. And up until now, we have shipped more than 11 million coolers. The EBITDA margin for the last trailing 12 months, just shy of 18%.
We are moving around in a premium market position. If we look at our two businesses, we have the liquid cooling business that most of you know. We have the relatively new SimSports business. I would say that the synergies we're looking into is, if we look internally first, we can allocate our resources around between the two segments because, for example, on the engineering side, it's exactly the same competencies we have in both segments. So that's a big advantage. The same goes for our supply chain and production. For that sake, we have many of the same contract manufacturers and the same suppliers. Of course, for the end users, it's all going into gaming. So there is an overlap in the end user segment as well.
Where there are differences is, of course, on the liquid cooling side, we are selling into OEM, whereas on the SimSports side, we are selling through our own webshop as well as a network of resellers. If we look at our setup, we have expanded this slide a little bit over time. We expanded it again, where you can see with the orange dots, that's where we have our SimSports resellers currently. That also shows where the concentration of our end users are. It also shows that we have manufacturing in Malaysia and in China.
Something that I'm actually happy about is that we have now established more contract manufacturers both in China and Malaysia, giving us, let's say, more flexibility but also more security in terms of if one of our contract manufacturers should burn down to the ground, for example, we have more now. That's something we've been working on for a while. I will not go too much in detail with our own organization because I think I repeated that a lot of times, and it's kind of self-explanatory. If we go to the next slide. The reason why we are mentioning TRYX is because it's not every day we get a new OEM partner, and this is truly a new one of the kind.
They have just launched their brand and their products in China, and they made a big deal out of liquid cooling. And I would say they are probably the first to integrate a curved LED screen on the cooler, turning the cooler into its own entertainment center almost. And they will start shipping in China in Q2, so basically now or later this quarter. And that's, of course, exciting because we have few customers and the customer concentration issue we've looked at for many years. This is obviously the way out of that, or this is an example of the way out of it. So we're excited about that. Looking at a little bit on the profitability of the business, it has been a long-term and profitable business. We accumulated an EBITDA since 2020 of almost $85 million.
But what you can also see on the slide and on the screen, depending on where you're looking, there is a high volatility during the quarters. And that is something we're looking at still. Diving a little bit into liquid cooling first, we shipped 10 new products this quarter, started shipping them, meaning that our customer will start shipping them soon as well. We have two new products estimated to start in this quarter. We are investing, as always, heavily in product development and branding to expand the reach within our key customers. We are at this point in time shipping to over 20 OEMs. Top five customers represented 72% of our liquid cooling this year versus 92% last year. That is, of course, a step in the right direction.
However, due to the lower than normal revenue, I would say it's, it's difficult to read too much into it. But, but nevertheless. As I alluded to at the, the last, quarterly presentation, we are broadening the addressable market to us, with a value offering, where we are seeing, multiple customers who would like to, let's say, enter into more, price-sensitive or price-competitive segments together with us. And the first target is China, but also other value-oriented markets. I think it's important to underline here that we are not compromising on the quality to reach it. And at the same time, we are not really seeing this as a cannibalization because it's different segments, it's different price points. So we don't see any reflection of, let's say, a general price or margin pressure because of this.
Of course, it's still brand new, so I don't think we will see a big effect from it until 2025. Diving into the SimSports segment. I think that the headline says a lot, a high-quality offering in a fast-growing market. That's exactly what we're doing and who we are. And we had a Q1 revenue of $2.2 million versus $1.3 million for the same quarter last year. And I would say we are on track to reach profitability. That is, of course, the first milestone and then the next one to make it hugely profitable. But I would say that we are steadily moving towards that goal, our goal. Gross margins are improving, but they still reflect that we are in a scale-up and in a startup phase.
But, they are moving into the right direction, and I'm, I'm confident that we will get where we need to, to get to. In the quarter, we released a lot of new accessories, for example, table brackets, what shall we call it, third-party mounting brackets so that you can use our competitors' products together with ours. Wheel different wheel accessories, etc. But I would say that the major thing here we will just release is the RaceHub 3.0. What is that? That is the software binding all our products together. And I would say, from a strategic perspective, where all the lower-cost vendors are saving is on the software development. And that's obvious because without doing a lot of software development, you don't need a lot of engineers and software people. And I would say that's really where, where we stand out.
And we have received really great feedback on that software, and it's something we've been working on since the very beginning. And now we are finally there where I would say that our software truly meets the performance of our hardware. We have, as I alluded to before, two main sales channels. We have roughly 30 niche resellers globally. Of course, we have an ambition of growing that number all the time. And then we have our own webshop. And I think for the first time, actually, our own webshop turned out to be the largest sales channel in the quarter. Needless to say, when we are launching more mass-market product lines late this year or early next year, we will add new sales channels. So the whole vision with entering this market was to have a full range of high-quality products.
I would say we are very much on track for a full range of high-quality products. I hope that during the first half of 2025, we will actually be able to launch and sell what I would say the missing link in our entire portfolio. That does not mean our product development will stop. There will, of course, be ongoing product development and new products. But I would say during 2025, we will have what I would consider a full ecosystem ranging from I would not call it low-end, but perhaps mass-market until the very high-end. And of course, our ambition is to take the pole position here and build a market share based on the open ecosystem that we have designed. We are not forgetting our high-end focus.
We will actually keep that because I believe that being a premier brand in the high-end market is actually going to have a huge effect on the lower-end market sales. Yes. And with that, I will turn over the mic to Peter to look a little bit more into the financials. Yep. Thanks, André. And we are going to be starting out by looking at the income statement, taking it pretty much top-down. Revenues this quarter, the first quarter of 2024, came in at just above $12.12 million versus $14.8 million the year before. So that's a mix of selling less sealed loop as a liquid cooling product, and then a quite solid improvement of the sales of SimSports products where we sold $2.2 million versus $1.3 million last year.
So that's about 70% up on that line in itself, a significant step into that segment. The gross profits, I'll talk about those in a couple of slides. So let's talk a little bit about operating expenses. Operating expenses at $6.7 million versus $5.2, $5.4 last year, same quarter, driven by added investments in marketing spends, R&D, supply chain development, etc. Keep in mind, though, that the number last year, the $5.4 million, was impacted, was really low, first of all, because we came out of a cost-saving exercise, and then it was impacted by a relatively high amount of capitalized expenses, which we could not do the same way, did not do the same way this year. So that's why the two numbers differ as much as they do.
If we take a 3-4 quarters look back on average, then we are pretty much on a run rate that is consistent and stable. So those numbers together bring us to an operating income of a negative $1.4 million versus a positive $1.1 million the year before. There's a foreign exchange gain line of $650,000 to the positive this year versus $400,000 to the negative last year. That line comes from the fact that we need to adjust our loans, our construction lines every quarter. And the way that the US dollars versus the Danish krone has developed over this quarter actually gave us a profit of $650,000. All in all, income before tax of minus $722 for the quarter versus plus $749 the year before.
So if we should just take a look at the gross margins, we should first look at the development over the quarters in revenue. You see, as André also talked about, they do come out with a great degree of volatility. At this point, Q4, Q1 this year, it is a pretty soft quarter. That also means, or should I start a different way, we always see relatively lower gross margins in quarters where we have less sales activity. That simply follows by the fact that, yes, many costs are variable, but some costs are more variable than others, and some costs are more rigid. That means that when we have a low revenue quarter, then we also have a low gross margin quarter. So it may look a little drastic here, but actually, take a look at it.
It's the gross margin total is the same 44% as it was the year before. We are also impacted just a tad bit by the US dollar, Chinese renminbi, foreign exchange cross, which was to our disadvantage this quarter. Changing the focus to the balance sheet. The big chunk here, of course, on the balance sheet is our investment in our HQ. At this point, we are at $51 million. We invested $2.2 million during the quarter. There's a couple of million more to go, before we're done with that. That is then countered by a current liability on the construction line of around $19 million. And this current, it's current as a technicality, it expires on January 1st, 2025, because, of course, the construction is going to be done this year.
So it is a current liability. It will then be refinanced and then reclassified to a long-term mortgage, when we're done with the completion. In other news on the balance sheet here, if we look at the working capital, then I'm happy to say that our inventories remain low, our customers are paying well, and we have a solid relationship with our vendors, meaning that our working capital is absolutely where it should be and in good shape. I think, well, I know our conversion cash conversion rate in cycle in days is 52 days this quarter, and it was 56 days the same quarter last year. So all in all, we are performing well on the working capital.
And here is then our new domicile in HQ going to be done here in late summer, fall 2024, suited for us, but luckily also suited for other tenants, one of whom is moving in later this year, also taking up 20% of the space. And as we have said a number of times before, when we are done with all this and when we have, yeah, when we moved in and it's all settled, then we can start evaluating whether to do a sale- lease back kind of thing or we've got to proceed with a standard long-term mortgage financing. And that concludes my comments, André. And then over to you. Yes. So entering 2024, our customers had elevated inventories, and that has clearly impacted the demand and the revenue for the first half of the year.
We do maintain our guidance for the year; however, because indication from the industry is that with Intel, AMD, NVIDIA, and so forth introducing new chips in the second half of the year, there is a, let's say, industry consensus that we will see a pickup. Our long-term growth ambition is, as always, I dare to say, 15%. And some of the more strategic focus areas this year is, of course, to try to mitigate some of these, let's say, big volatilities that we are seeing. And at least what we believe is that expanding the liquid cooling market will help us a little bit in this volatility, as well as, of course, expanding the SimSports business. I believe in rough terms, last year, SimSports was 10% of our overall business.
And for sure, if we can grow that to become a much more significant part of our business, I also believe then we can get rid of some of the volatility. So that is what I'm focused on a lot. That was basically the summary and the outlook. So with that, I think we are moving to the Q&A.
Yes. That means that we will call up on the operator and see if there are any verbal questions. Otherwise, we'll focus on the questions that are typed in here in the queue. And of course, feel free to type any questions. But operator, can you help us?
Absolutely. If you would like to ask a question, please press star one on your telephone keypad. And if you would like to ask a web question, please type your question in the question box on the right-hand corner of your screen. As of right now, we have no phone questions.
That's good. Well, that means that we'll go back to the questions that are typed in here. I'll simply start from the top. A question here. Could you please provide an updated list of the largest shareholders as of the end of Q1 on your website? I can answer that. When we were listed in Norway, we, of course, had to follow the Norwegian rules and traditions. Under that regime, we were posting an ever-updated list of the 20 largest shareholders. We don't do that in Denmark. So actually, I would have to say, respectfully decline the request here to publish that list.
All right. I think the next one is for me. How do you see the recent news about your biggest competitor in sim racing? And is this a chance or neutral for you? I would say fortunately, today, I'm here to run Asetek. So I don't really comment too much on our competitors' businesses, but of course, we've noted it. And yes, I do believe it's an opportunity for us, on the sales side. I'm never fond of seeing other people struggling, but I think in this case, it is an opportunity for us to capture market share. And, of course, the way we try to do that is to make sure we have product availability and inventory.
The top five customers decreased from 1% to another %. What is driving this development?
Yes. So I would like to be happy and proud about that, number because that's exactly what we want to see. But let's hold out that thought for the next couple of quarters and see if we are able to continue that trend. Because right now, I think it's also, as I mentioned before, I also think it perhaps shows that some of our customers have bigger inventories than others. So let's see when things have normalized. But for sure, that is exactly what we want to do. I think the next one is for you also. Yeah. How certain are you that the decrease in revenue is mainly driven by elevated inventories, and what kind of data do you base it on?
So I think a lot of times in the history of Asetek, we have gone a little bit against the industry. When other people have struggled, we've been up. And when other people's been up, we've been down. But I think in this case, there seems to be a broad consensus, no matter where we look in our industry, that people do not have the sell-through that they had expected. They bought too much in the last couple of quarters of last year. And, then, of course, we also have customer indications on forecasts. The reason we don't talk much about that is keep in mind forecasts in our shop, for the Q3 and Q4 are indications at this point in time. They can move a lot, and they do move a lot.
So I would say, all in all, this is what we see looking out in the market. But since we have such a short notice and short, short time period to look into, there are no hard facts to say that, September 2nd, we'll receive this order, and October 2nd, we'll receive this order. It never worked like that. Very good. Can you talk to that one also, number five? At Q4, you timely warned to slower activity in Q1. What should we expect in Q2 this year? Is it prudent to expect a lower revenue in Q2 compared to the strong Q2 revenue reported last year? So we don't report on quarters. Well, we report on quarters because we have to, but we don't guide on quarters. We guide for the full year.
And I think what's in my presentation and what we've said so far is that we can see a slower first half, and then we expect a stronger second half. So I think I'm going to keep it at that.
Very good. And I've been hitting the refresh button for a number of times now. Nothing further has come in. So let me just remind you that the financial data is available on our website in a database form that you can look into as you want to. And of course, you're always welcome to contact us. We are more than keen on listening to your questions and answering the best we can. With that, thank you for your interest in Asetek. Have a good day.
Thank you.
This concludes today's conference call. Thank you for your participation, and you may now disconnect.