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.
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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.
