EPS of $0.2871 beat estimates of $0.2868 and revenues of $906.42M beat estimates of $895.93M. Sales grew by 8% for the year, although excluding its acquisition of WillowTree, sales grew by 1%. Profitability declined for the quarter, primarily due to an increase in salaries and benefits. Its net debt/EBITDA stands at 2.9X, a fairly high ratio. Management reaffirmed its outlook for FY2023, and its CEO bought ~$10M of stock from the beginning of 2023 through October. Its debt balance is negatively impacting profitability, however, its free cash flow increased for the quarter and it was almost entirely used to pay down debt. If the company can continue to grow its top line, begin to execute on profitability, and reduce its debt load, then it is trading at a cheap valuation of 6.9X forward earnings. Given the reaffirming of guidance, we would be OK holding here to assess if future quarters improve.
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