cBrain Raises 2024 EBT Margin Expectations to 30-32% Amidst Market Shifts

In a recent announcement, cBrain (NASDAQ: CBRAIN), a leading software engineering company specializing in e-government solutions, has revised its expected earnings before tax (EBT) margin for 2024 to a range of 30-32%. This upward revision reflects the company's strong performance and the accelerated shift towards Commercial Off-The-Shelf (COTS) software for government, a trend that is occurring faster than initially anticipated.

cBrain's revised EBT margin expectations are driven by two main factors. Firstly, the company has witnessed faster-than-expected global industry changes, with government organizations increasingly adopting standard software and platforms to address the lack of skilled IT resources and the growing demand for rapid digital transformation. This shift towards COTS for government has opened new opportunities for cBrain, as exemplified by its recent collaboration with the United Nations Development Programme (UNDP) in Africa and larger orders in Romania.

Secondly, cBrain has held back some market investments planned for 2024 due to market uncertainties in the US and Germany. Instead, the company has adapted its go-to-market strategy and organization to take advantage of the changing market situation, resulting in lower-than-expected costs. This strategic flexibility, combined with the solid business performance and strong cash flow, has contributed to the upward revision of cBrain's EBT margin expectations.



The accelerated shift towards COTS for government has significant implications for cBrain's growth strategy. As a leading supplier of COTS software for government, cBrain is well-positioned to capitalize on this trend. The company's F2 Digital Platform, built in close collaboration with strategic government customers, offers a unique value proposition by enabling users without a technical background to tailor the platform to meet specific organizational needs and processes.

In response to these developments, cBrain has decided to revisit and potentially adjust its international growth strategy. This includes evaluating organizational readiness, as well as market and product development strategies, to leverage and make the most of the accelerated industry changes. By doing so, cBrain aims to fully take advantage of the positive developments and solid business with strong cash flow and earnings, which offer strategic flexibility.



In conclusion, cBrain's revised EBT margin expectations for 2024 reflect the company's strong performance and the accelerated shift towards COTS for government. As a leading supplier of COTS software for government, cBrain is well-positioned to capitalize on this trend and expand its growth strategy. By revisiting and potentially adjusting its international growth strategy, cBrain aims to fully take advantage of the positive developments and solid business with strong cash flow and earnings, which offer strategic flexibility.