I would like to know your thoughts on NVEI's earnings please.
Thank You
EPS of $0.44 was in line with estimates of $0.44 and revenues of $256.5M beat estimates of $252.84M. Its sales grew by 20% for the quarter, and organic revenue growth was 26%. It incurred a net loss of $8.3M for the quarter, largely due to its Paya-related integration and one-time acquisition costs of $20M, but its Adjusted EBITDA grew from $91.6M to $96.3M. Management raised the low end of its prior FY2023 financial outlook and reiterated the high end of the range. While its gross profits increased as a result of growth in sales, its operating profit shrunk as it incurred higher SG&A costs, and net profits took a hit from integration and acquisition costs.
Its balance sheet contracted slightly against the previous quarter, and its debt increased as a result of acquisition costs. There are certainly a few downsides to this report, but the company continues to trade at a reasonable valuation (17.2X forward P/E) and we feel that its acquisitions will help to fuel future growth. We like the company and its fundamentals, but we feel that investors will need to see stabilization and improvement in its balance sheet and profits next quarter.