Enghouse Systems (TSE:ENGH) Reports Mixed Q2 Results, Declining Earnings
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Enghouse Systems (TSE:ENGH) Reports Mixed Q2 Results, Declining Earnings

Story Highlights

Enghouse reported mixed earnings, with revenue beating expectations while earnings per share came in lower than expected.

After market hours today, software solutions company Enghouse Systems Limited (TSE:ENGH) revealed a mixed bag regarding its Q2-2023 earnings results, as revenue beat expectations, but earnings per share missed the mark. For the quarter ending April 30, 2023, the company saw revenues climb to C$113.5 million, outperforming the consensus estimate of C$111.45 million. This 6.7% increase compared to last year was because of a C$3.6 million benefit from foreign exchange as well as acquisitions that were completed.

However, Enghouse took a hit in net income, which fell to C$12.5 million compared to last year’s C$17.9 million. This led to a drop in earnings per share from C$0.32 last year to C$0.23 this quarter, falling short of the estimated C$0.32. The cause was incremental operating costs from the process of integrating new acquisitions and higher third-party costs associated with these acquisitions. Similarly, adjusted EBITDA for the quarter fell from C$0.61 to C$0.54 year-over-year.

Even with a slight uptick in revenues for the past six months, from C$217.4 million last year to C$219.9 million, the company saw operating results take a dip. Adjusted EBITDA per share slipped from C$1.30 last year to C$1.13 as costs linked to acquisitions and third-party services impacted results.

On a brighter note, Enghouse wrapped up the acquisitions of Qumu Corporation and Mobi All Technologies S.A, and the companies were “substantially” integrated into Enghouse in the quarter.

Is Enghouse Stock a Buy, According to Analysts?

According to analysts, Enghouse stock earns a Moderate Buy consensus rating based on two Buys and one Hold assigned in the past three months. The average Enghouse stock price forecast of C$42.86 implies 15.2% upside potential.

Disclosure

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