In Q3, DNTL saw revenue increase +7.9% year-over-year to $336.9M, missing analysts’ expectations of $343.5M. Adjusted EBITDA rose +2.4% year-over-year to $60.9M displaying a margin of 18.1%. Thus far in FY2023, same practice EBITDA growth has been +6.5% with adjusted EBITDA growth from acquisitions completed in the prior period of 12%. DNTL has continued to display a high level of total debt coming in at $1.38B along with being 6.1x EBITDA in Q3. In Q4, management is expecting revenue growth in the 9% to 10% range, and same practice revenue growth in the 5% to 6% range, both year-over-year. Adjusted EBITDA margins are expected to remain consistent in Q4 with year-to-date values. DNTL trading at 11.4x (2024) earnings and displaying growth reflects positively for the stock, but high debt levels can help explain the poor year-to-date performance (-38%).
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