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AeroVironment Announces Fiscal 2024 Third Quarter Results

AeroVironment, Inc. (“AeroVironment” or the “Company”) reported today financial results for the fiscal third quarter ended January 27, 2024.

Third Quarter Highlights:

  • Record third quarter revenue of $186.6 million, up 39% year-over-year
  • Third quarter net income of $13.9 million and adjusted EBITDA of $28.8 million, increases of $14.6 million and $5.1 million, year-over-year, respectively
  • Funded backlog of $462.8 million as of January 27, 2024

“Once again, AeroVironment has delivered outstanding results, including a record for third quarter revenue that’s nearly 40% above the same period last fiscal year,” said Wahid Nawabi, AeroVironment chairman, president and chief executive officer. “Solid bottom-line results, fueled by record demand and strong operating execution, have us on track for our best year ever. In addition, the Company continues to show tremendous growth in the Loitering Munition Systems segment, which delivered record revenue in the quarter.

“With the increased global demand for our solutions, strong backlog and growing pipeline, AeroVironment remains well positioned for continued growth. As such, we are raising and narrowing our fiscal year revenue guidance for 2024 to between $700 million and $710 million, and we continue to anticipate double-digit revenue growth in fiscal year 2025.”

FISCAL 2024 THIRD QUARTER RESULTS

Revenue for the third quarter of fiscal 2024 was $186.6 million, an increase of 39% as compared to $134.4 million for the third quarter of fiscal 2023, reflecting higher product sales of $64.7 million, partially offset by lower service revenue of $12.5 million. From a segment standpoint, the year-over-year increase was due to revenue growth in Loitering Munitions Systems (“LMS”) of 140% and Unmanned Systems (“UMS”) of 23%, partially offset by a decrease in MacCready Works (“MW”) of 13%.

Gross margin for the third quarter of fiscal 2024 was $67.3 million, an increase of 48% as compared to $45.5 million for the third quarter of fiscal 2023, reflecting higher product margin of $20.1 million and higher service gross margin of $1.7 million. As a percentage of revenue, gross margin increased to 36% from 34%, primarily due to an increase in the proportion of product revenue to total revenue, partially offset by an unfavorable product mix. Gross margin was favorably impacted by a decrease in depreciation charges for in-service assets of $5.3 million related to the closure of COCO site locations during fiscal year 2023. Gross margin was negatively impacted by $4.0 million of intangible amortization expense and other related non-cash purchase accounting expenses in the third quarter of fiscal 2024 as compared to $3.3 million in the third quarter of fiscal 2023.

Income from operations for the third quarter of fiscal 2024 was $14.3 million as compared to $4.6 million for the third quarter of last fiscal year. The increase year-over-year was primarily due higher gross margin of $21.8 million, partially offset by increases in research and development (“R&D”) expense of $9.0 million and selling, general and administrative (“SG&A”) expense of $3.1 million.

Other income, net, for the third quarter of fiscal 2024 was $0.9 million, as compared to other loss, net of $5.4 million for the third quarter of last fiscal year. The increase in other income, net was primarily due to increases in net unrealized gains on investment holdings and interest income and a decrease in interest expense.

Provision for income taxes for the third quarter of fiscal 2024 was $1.3 million, as compared to a benefit of $(0.5) million for the third quarter of last fiscal year. The increase in provision for income taxes was primarily attributable to an increase in income before income taxes.

Net income attributable to AeroVironment for the third quarter of fiscal 2024 was $13.9 million, or $0.50 per diluted share, as compared to net loss attributable to AeroVironment of $(0.7) million, or $(0.03) per diluted share, in the prior-year period, respectively.

Non-GAAP adjusted EBITDA for the third quarter of fiscal 2024 was $28.8 million and non-GAAP earnings per diluted share were $0.63, as compared to $23.7 million and $0.33, respectively, for the third quarter of fiscal 2023.

BACKLOG

As of January 27, 2024, funded backlog (defined as remaining performance obligations under firm orders for which funding is currently appropriated to us under a customer contract) was $462.8 million, as compared to $424.1 million as of April 30, 2023.

FISCAL 2024 — OUTLOOK FOR THE FULL YEAR

For fiscal year 2024, the Company now expects revenue of between $700 million and $710 million, net income of between $51 million and $55 million, Non-GAAP adjusted EBITDA of between $122 million and $127 million, earnings per diluted share of between $1.86 and $2.00 and non-GAAP earnings per diluted share, which excludes amortization of intangible assets, other non-cash purchase accounting expenses and equity securities investments gains or losses, of between $2.69 and $2.83.

The foregoing estimates are forward-looking and reflect management’s view of current and future market conditions, subject to certain risks and uncertainties, including certain assumptions with respect to our ability to efficiently and on a timely basis integrate acquisitions, obtain and retain government contracts, changes in the timing and/or amount of government spending, react to changes in the demand for our products and services, activities of competitors, changes in the regulatory environment, and general economic and business conditions in the United States and elsewhere in the world. Investors are reminded that actual results may differ materially from these estimates.

CONFERENCE CALL AND PRESENTATION

In conjunction with this release, AeroVironment, Inc. will host a conference call today, Monday, March 4, 2024, at 4:30 pm Eastern Time that will be webcast live. Wahid Nawabi, chairman, president and chief executive officer, Kevin P. McDonnell, chief financial officer and Jonah Teeter-Balin, senior director corporate development and investor relations, will host the call.

Investors may access the call by registering via the following participant registration link up to ten minutes prior to the start time.

Participant registration URL: https://register.vevent.com/register/BI2e69517f68da41c0ade849312a1992e2

Investors may also listen to the live audio webcast via the Investor Relations page of the AeroVironment, Inc. website, http://investor.avinc.com. Please allow 15 minutes prior to the call to download and install any necessary audio software.

A supplementary investor presentation for the third quarter fiscal year 2024 can be accessed at https://investor.avinc.com/events-and-presentations.

Audio Replay

An audio replay of the event will be archived on the Investor Relations section of the Company's website at http://investor.avinc.com.

ABOUT AEROVIRONMENT, INC.

AeroVironment (NASDAQ: AVAV) is a global leader in intelligent multi-domain robotic systems, uncrewed aircraft and ground systems, sensors, software analytics and connectivity. Headquartered in Arlington, Virginia, AeroVironment delivers actionable intelligence so our customers can proceed with certainty. For more information, visit www.avinc.com.

FORWARD-LOOKING STATEMENTS

This press release contains "forward-looking statements" as that term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate or imply future results, performance or achievements, and may contain words such as “believe,” “anticipate,” “expect,” “estimate,” “intend,” “project,” “plan,” or words or phrases with similar meaning. Forward-looking statements are based on current expectations, forecasts and assumptions that involve risks and uncertainties, including, but not limited to, economic, competitive, governmental and technological factors outside of our control, that may cause our business, strategy or actual results to differ materially from the forward-looking statements.

Factors that could cause actual results to differ materially from the forward-looking statements include, but are not limited to, the impact of our ability to successfully close and integrate acquisitions into our operations and avoid disruptions from acquisition transactions that will harm our business, including the acquisition of Tomahawk Robotics; the recording of goodwill and other intangible assets as part of acquisitions that are subject to potential impairments in the future and any realization of such impairments; any actual or threatened disruptions to our relationships with our distributors, suppliers, customers and employees, including shortages in components for our products; the ability to timely and sufficiently integrate international operations into our ongoing business and compliance programs; reliance on sales to the U.S. government, including uncertainties in classification, pricing or potentially burdensome imposed terms for certain types of government contracts; availability of U.S. government funding for defense procurement and R&D programs; changes in the timing and/or amount of government spending, including due to continuing resolutions; adverse impacts of a U.S. government shutdown; our reliance on limited relationships to fund our development of HAPS UAS; our ability to perform under existing contracts and obtain new contracts; risks related to our international business, including compliance with export control laws; the extensive and increasing regulatory requirements governing our contracts with the U.S. government and international customers; the consequences to our financial position, business and reputation that could result from failing to comply with such regulatory requirements; unexpected technical and marketing difficulties inherent in major research and product development efforts; the impact of potential security and cyber threats or the risk of unauthorized access to and resulting misuse of our, our customers’ and/or our suppliers’ information and systems; uncertainty in the customer adoption rate of commercial use unmanned aircraft systems; failure to remain a market innovator, to create new market opportunities or to expand into new markets; unexpected changes in significant operating expenses, including components and raw materials; failure to develop new products or integrate new technology into current products; any increase in litigation activity or unfavorable results in legal proceedings, including pending class actions; our ability to respond and adapt to legal, regulatory and government budgetary changes, including those resulting from the impact of pandemics and similar outbreaks; our ability to comply with the covenants in our loan documents; our ability to attract and retain skilled employees; the impact of inflation; and general economic and business conditions in the United States and elsewhere in the world; and the failure to establish and maintain effective internal control over financial reporting. For a further list and description of such risks and uncertainties, see the reports we file with the Securities and Exchange Commission. We do not intend, and undertake no obligation, to update any forward-looking statements, whether as a result of new information, future events or otherwise.

NON-GAAP MEASURES

In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), this earnings release also contains non-GAAP financial measures. See in the financial tables below the calculation of these measures, the reasons why we believe these measures provide useful information to investors, and a reconciliation of these measures to the most directly comparable GAAP measures.

AeroVironment, Inc.

Consolidated Statements of Operations

(In thousands except share and per share data)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

January 27,

 

January 28,

 

January 27,

 

January 28,

 

 

2024

 

2023

 

2024

 

2023

 

 

(Unaudited)

 

(Unaudited)

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

155,923

 

 

$

91,216

 

 

$

421,173

 

 

$

211,533

 

Contract services

 

 

30,655

 

 

 

43,179

 

 

 

98,568

 

 

 

142,962

 

 

 

 

186,578

 

 

 

134,395

 

 

 

519,741

 

 

 

354,495

 

Cost of sales:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

 

99,486

 

 

 

54,866

 

 

 

240,126

 

 

 

127,210

 

Contract services

 

 

19,805

 

 

 

34,019

 

 

 

71,318

 

 

 

122,171

 

 

 

 

119,291

 

 

 

88,885

 

 

 

311,444

 

 

 

249,381

 

Gross margin:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

 

56,437

 

 

 

36,350

 

 

 

181,047

 

 

 

84,323

 

Contract services

 

 

10,850

 

 

 

9,160

 

 

 

27,250

 

 

 

20,791

 

 

 

 

67,287

 

 

 

45,510

 

 

 

208,297

 

 

 

105,114

 

Selling, general and administrative

 

 

27,826

 

 

 

24,746

 

 

 

79,800

 

 

 

70,302

 

Research and development

 

 

25,127

 

 

 

16,157

 

 

 

62,618

 

 

 

47,793

 

Income (loss) from operations

 

 

14,334

 

 

 

4,607

 

 

 

65,879

 

 

 

(12,981

)

Other income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense, net

 

 

(114

)

 

 

(2,810

)

 

 

(4,072

)

 

 

(6,722

)

Other income (expense), net

 

 

1,004

 

 

 

(2,587

)

 

 

(2,983

)

 

 

(2,183

)

Income (loss) before income taxes

 

 

15,224

 

 

 

(790

)

 

 

58,824

 

 

 

(21,886

)

Provision for (benefit from) income taxes

 

 

1,259

 

 

 

(531

)

 

 

3,710

 

 

 

(8,382

)

Equity method investment loss, net of tax

 

 

(80

)

 

 

(417

)

 

 

(1,494

)

 

 

(2,190

)

Net income (loss)

 

 

13,885

 

 

 

(676

)

 

 

53,620

 

 

 

(15,694

)

Net income attributable to noncontrolling interest

 

 

 

 

 

 

 

 

 

 

 

(45

)

Net income (loss) attributable to AeroVironment, Inc.

 

$

13,885

 

 

$

(676

)

 

$

53,620

 

 

$

(15,739

)

Net income (loss) per share attributable to AeroVironment, Inc.

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.50

 

 

$

(0.03

)

 

$

1.99

 

 

$

(0.63

)

Diluted

 

$

0.50

 

 

$

(0.03

)

 

$

1.98

 

 

$

(0.63

)

Weighted-average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

27,907,568

 

 

 

25,012,412

 

 

 

26,957,061

 

 

 

24,906,977

 

Diluted

 

 

28,044,127

 

 

 

25,012,412

 

 

 

27,061,409

 

 

 

24,906,977

 

AeroVironment, Inc.

Consolidated Balance Sheets

(In thousands except share data)

 

 

 

 

 

 

 

 

 

January 27,

 

April 30,

 

 

2024

 

2023

 

 

(Unaudited)

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

107,694

 

 

$

132,859

 

Accounts receivable, net of allowance for doubtful accounts of $88 at January 27, 2024 and $156 at April 30, 2023

 

 

53,236

 

 

 

87,633

 

Unbilled receivables and retentions

 

 

148,588

 

 

 

105,653

 

Inventories, net

 

 

161,384

 

 

 

138,814

 

Income taxes receivable

 

 

8,081

 

 

 

 

Prepaid expenses and other current assets

 

 

21,708

 

 

 

12,043

 

Total current assets

 

 

500,691

 

 

 

477,002

 

Long-term investments

 

 

21,282

 

 

 

23,613

 

Property and equipment, net

 

 

45,053

 

 

 

39,795

 

Operating lease right-of-use assets

 

 

28,904

 

 

 

27,363

 

Deferred income taxes

 

 

21,378

 

 

 

27,206

 

Intangibles, net

 

 

77,597

 

 

 

43,577

 

Goodwill

 

 

275,189

 

 

 

180,801

 

Other assets

 

 

10,205

 

 

 

5,220

 

Total assets

 

$

980,299

 

 

$

824,577

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

26,969

 

 

$

31,355

 

Wages and related accruals

 

 

28,443

 

 

 

35,637

 

Customer advances

 

 

17,536

 

 

 

16,645

 

Current portion of long-term debt

 

 

7,500

 

 

 

7,500

 

Current operating lease liabilities

 

 

8,934

 

 

 

8,229

 

Income taxes payable

 

 

797

 

 

 

2,342

 

Other current liabilities

 

 

17,352

 

 

 

19,626

 

Total current liabilities

 

 

107,531

 

 

 

121,334

 

Long-term debt, net of current portion

 

 

31,292

 

 

 

125,904

 

Non-current operating lease liabilities

 

 

21,978

 

 

 

21,189

 

Other non-current liabilities

 

 

2,105

 

 

 

746

 

Liability for uncertain tax positions

 

 

2,705

 

 

 

2,705

 

Deferred income taxes

 

 

1,703

 

 

 

1,729

 

Commitments and contingencies

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value:

 

 

 

 

 

 

Authorized shares—10,000,000; none issued or outstanding at January 27, 2024 and April 30, 2023

 

 

 

 

 

 

Common stock, $0.0001 par value:

 

 

 

 

 

 

Authorized shares—100,000,000

 

 

 

 

 

 

Issued and outstanding shares—28,136,735 shares at January 27, 2024 and 26,216,897 shares at April 30, 2023

 

 

4

 

 

 

4

 

Additional paid-in capital

 

 

593,228

 

 

 

384,397

 

Accumulated other comprehensive loss

 

 

(4,888

)

 

 

(4,452

)

Retained earnings

 

 

224,641

 

 

 

171,021

 

Total stockholders' equity

 

 

812,985

 

 

 

550,970

 

Total liabilities and stockholders’ equity

 

$

980,299

 

 

$

824,577

 

AeroVironment, Inc.

Consolidated Statements of Cash Flows

(In thousands)

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

January 27,

 

January 28,

 

 

2024

 

2023

 

 

(Unaudited)

Operating activities

 

 

 

 

 

Net income (loss)

 

$

53,620

 

 

$

(15,694

)

Adjustments to reconcile net income (loss) to cash provided by operating activities:

 

 

 

 

 

 

Depreciation and amortization

 

 

24,969

 

 

 

48,109

 

Loss from equity method investments

 

 

1,494

 

 

 

2,190

 

Amortization of debt issuance costs

 

 

638

 

 

 

634

 

Provision for doubtful accounts

 

 

(67

)

 

 

5

 

Reserve for inventory excess and obsolescence

 

 

11,668

 

 

 

3,787

 

Other non-cash expense, net

 

 

783

 

 

 

935

 

Non-cash lease expense

 

 

6,923

 

 

 

5,866

 

Loss on foreign currency transactions

 

 

54

 

 

 

38

 

Unrealized loss on available-for-sale equity securities, net

 

 

2,712

 

 

 

1,798

 

Deferred income taxes

 

 

(1,604

)

 

 

(1,250

)

Stock-based compensation

 

 

12,425

 

 

 

7,108

 

Loss on disposal of property and equipment

 

 

115

 

 

 

1,193

 

Amortization of debt securities discount

 

 

 

 

 

125

 

Changes in operating assets and liabilities, net of acquisitions:

 

 

 

 

 

 

Accounts receivable

 

 

36,387

 

 

 

6,847

 

Unbilled receivables and retentions

 

 

(41,950

)

 

 

(5,098

)

Inventories

 

 

(31,901

)

 

 

(43,111

)

Income taxes receivable

 

 

(8,081

)

 

 

(9,388

)

Prepaid expenses and other assets

 

 

(15,896

)

 

 

(3,114

)

Accounts payable

 

 

(10,003

)

 

 

7,789

 

Other liabilities

 

 

(15,321

)

 

 

(157

)

Net cash provided by operating activities

 

 

26,965

 

 

 

8,612

 

Investing activities

 

 

 

 

 

 

Acquisition of property and equipment

 

 

(13,901

)

 

 

(10,116

)

Equity method investments

 

 

(1,875

)

 

 

(2,774

)

Equity security investments

 

 

 

 

 

(5,100

)

Acquisition of intangibles

 

 

(1,500

)

 

 

 

Business acquisitions, net of cash acquired

 

 

(24,156

)

 

 

(5,105

)

Proceeds from deconsolidation of previously controlled subsidiary, net of cash deconsolidated

 

 

 

 

 

(635

)

Redemptions of available-for-sale investments

 

 

 

 

 

25,945

 

Purchases of available-for-sale investments

 

 

 

 

 

(1,326

)

Net cash (used in) provided by investing activities

 

 

(41,432

)

 

 

889

 

Financing activities

 

 

 

 

 

 

Principal payments of term loan

 

 

(95,000

)

 

 

(22,500

)

Holdback and retention payments for business acquisition

 

 

(500

)

 

 

 

Payment of contingent consideration

 

 

(2,132

)

 

 

 

Proceeds from shares issued, net of issuance costs

 

 

88,437

 

 

 

20,104

 

Payment of debt issuance costs

 

 

(37

)

 

 

 

Tax withholding payment related to net settlement of equity awards

 

 

(1,370

)

 

 

(853

)

Exercise of stock options

 

 

 

 

 

868

 

Other

 

 

(19

)

 

 

(21

)

Net cash used in financing activities

 

 

(10,621

)

 

 

(2,402

)

Effects of currency translation on cash and cash equivalents

 

 

(77

)

 

 

695

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(25,165

)

 

 

7,794

 

Cash, cash equivalents and restricted cash at beginning of period

 

 

132,859

 

 

 

77,231

 

Cash, cash equivalents and restricted cash at end of period

 

$

107,694

 

 

$

85,025

 

Supplemental disclosures of cash flow information

 

 

 

 

 

 

Cash paid, net during the period for:

 

 

 

 

 

 

Income taxes

 

$

15,195

 

 

$

1,192

 

Interest

 

$

5,850

 

 

$

5,697

 

Non-cash activities

 

 

 

 

 

 

Issuance of common stock for business acquisition

 

$

109,820

 

 

$

 

Unrealized gain on available-for-sale investments, net of deferred tax expense of $0 for the nine months ended January 27, 2024 and January 28, 2023, respectively

 

$

 

 

$

(26

)

Change in foreign currency translation adjustments

 

$

(436

)

 

$

1,433

 

Issuances of inventory to property and equipment, ISR in-service assets

 

$

 

 

$

4,677

 

Acquisitions of property and equipment included in accounts payable

 

$

2,519

 

 

$

731

 

AeroVironment, Inc.

Reportable Segment Results (Unaudited)

(In thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended January 27, 2024

 

 

UMS

 

LMS

 

MW

 

Total

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

104,522

 

$

51,338

 

$

63

 

 

$

155,923

Contract services

 

 

8,768

 

 

 

6,320

 

 

 

15,567

 

 

 

30,655

 

 

 

$

113,290

 

 

$

57,658

 

 

$

15,630

 

 

$

186,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment adjusted income (loss) from operations

 

$

20,417

 

 

$

7,562

 

 

$

(8,103

)

 

 

 

 

 

Three Months Ended January 28, 2023

 

 

UMS

 

LMS

 

MW

 

Total

Revenue:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales

 

$

74,966

 

$

16,203

 

 

$

47

 

$

91,216

Contract services

 

 

17,363

 

 

 

7,812

 

 

 

18,004

 

 

 

43,179

 

 

 

$

92,329

 

 

$

24,015

 

 

$

18,051

 

 

$

134,395

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Segment adjusted income (loss) from operations

 

$

11,792

 

 

$

(129

)

 

$

376

 

 

 

 

AeroVironment, Inc.

Reconciliation of non-GAAP Earnings per Diluted Share (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

Ended

 

Three Months

Ended

 

Nine Months

Ended

 

Nine Months

Ended

 

 

January 27, 2024

 

January 28, 2023

 

January 27, 2024

 

January 28, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) per diluted share

 

$

0.50

 

 

$

(0.03

)

 

$

1.98

 

$

(0.63

)

Acquisition-related expenses

 

 

 

 

 

0.01

 

 

 

0.05

 

 

 

0.04

 

Amortization of acquired intangible assets and other purchase accounting adjustments

 

 

0.16

 

 

 

0.22

 

 

 

0.38

 

 

 

0.69

 

Equity method and equity securities investments activity, net

 

 

(0.03

)

 

 

0.13

 

 

 

0.16

 

 

 

0.16

 

Earnings per diluted share as adjusted (Non-GAAP)

 

$

0.63

 

 

$

0.33

 

 

$

2.57

 

 

$

0.26

 

Reconciliation of non-GAAP adjusted EBITDA (Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months

Ended

 

Three Months

Ended

 

Nine Months

Ended

 

Nine Months

Ended

(in millions)

 

January 27, 2024

 

January 28, 2023

 

January 27, 2024

 

January 28, 2023

Net income (loss)

 

$

13.9

 

 

$

(0.7

)

 

$

53.6

 

$

(15.7

)

Interest expense, net

 

 

0.1

 

 

 

2.8

 

 

 

4.1

 

 

 

6.7

 

Provision for (benefit from) income taxes

 

 

1.3

 

 

 

(0.5

)

 

 

3.7

 

 

 

(8.4

)

Depreciation and amortization

 

 

9.6

 

 

 

15.8

 

 

 

25.0

 

 

 

48.1

 

EBITDA (Non-GAAP)

 

 

24.9

 

 

 

17.4

 

 

 

86.4

 

 

 

30.7

 

Stock-based compensation

 

 

4.2

 

 

 

2.7

 

 

 

12.4

 

 

 

7.1

 

Equity method and equity securities investments activity, net

 

 

(0.7

)

 

 

3.2

 

 

 

4.2

 

 

 

4.0

 

Amortization of cloud computing arrangement implementation

 

 

0.5

 

 

 

0.1

 

 

 

0.9

 

 

 

0.4

 

Acquisition-related expenses

 

 

(0.1

)

 

 

0.3

 

 

 

1.7

 

 

 

1.2

 

Adjusted EBITDA (Non-GAAP)

 

$

28.8

 

 

$

23.7

 

 

$

105.6

 

 

$

43.4

 

Reconciliation of Forecast Earnings per Diluted Share (Unaudited)

 

 

 

 

 

 

Fiscal year ending

 

 

April 30, 2024

Forecast earnings per diluted share

 

$

1.86 - 2.00

 

Acquisition-related expenses

 

 

0.05

Amortization of acquired intangible assets and other purchase accounting adjustments

 

 

0.54

 

Equity method and equity securities investments activity, net

 

 

0.24

 

Forecast earnings per diluted share as adjusted (Non-GAAP)

 

$

2.69 - 2.83

 

Reconciliation of 2024 Forecast and Fiscal Year 2023 Actual Non-GAAP adjusted EBITDA (Unaudited)

 

 

 

 

 

 

 

 

 

Fiscal year ending

 

Fiscal year ended

(in millions)

 

April 30, 2024

 

April 30, 2023

Net income (loss)

 

$

51 - 55

 

$

(176

)

Interest expense, net

 

 

5

 

 

 

9

 

Provision for (benefit from) income taxes

 

 

3 - 4

 

 

 

(15

)

Depreciation and amortization

 

 

36

 

 

 

100

 

EBITDA (Non-GAAP)

 

 

95 - 100

 

 

 

(82

)

Amortization of cloud computing arrangement implementation

 

 

1

 

 

 

1

 

Stock-based compensation

 

 

17

 

 

 

11

 

Equity method and equity securities investments activity, net

 

 

7

 

 

 

3

 

Acquisition-related expenses

 

 

2

 

 

 

1

 

Goodwill impairment

 

 

 

 

 

156

 

Adjusted EBITDA (Non-GAAP)

 

$

122 - 127

 

 

$

90

 

Statement Regarding Non-GAAP Measures

The non-GAAP measures set forth above should be considered in addition to, and not as a replacement for or superior to, the comparable GAAP measures, and may not be comparable to similarly titled measures reported by other companies. Management believes that these measures provide useful information to investors by offering additional ways of viewing our results that, when reconciled to the corresponding GAAP measures, help our investors to understand the long-term profitability trends of our business and compare our profitability to prior and future periods and to our peers. In addition, management uses these non-GAAP measures to evaluate our operating and financial performance.

Non-GAAP Adjusted Operating Income

Adjusted operating income is defined as operating income before intangible amortization, amortization of non-cash purchase accounting adjustments, goodwill impairment and acquisition-related expenses.

Non-GAAP Earnings per Diluted Share

We exclude the acquisition-related expenses, amortization of acquisition-related intangible assets, equity securities investments gains or losses, goodwill impairment and one-time non-operating items because we believe this facilitates more consistent comparisons of operating results over time between our newly acquired and existing businesses, and with our peer companies. We believe, however, that it is important for investors to understand that such intangible assets contribute to revenue generation and that intangible asset amortization will recur in future periods until such intangible assets have been fully amortized.

Adjusted EBITDA (Non-GAAP)

Adjusted EBITDA is defined as net income before interest income, interest expense, income tax expense (benefit) and depreciation and amortization including amortization of purchase accounting adjustments, adjusted for the impact of certain other non-cash items, including amortization of implementation of cloud computing arrangements, stock-based compensation, acquisition-related expenses, equity method investment gains or losses, equity securities investments gains or losses, goodwill impairment and one-time non-operating gains or losses. We present Adjusted EBITDA, which is not a recognized financial measure under U.S. GAAP, because we believe it is frequently used by analysts, investors and other interested parties to evaluate companies in our industry. We believe this facilitates more consistent comparisons of operating results over time between our newly acquired and existing businesses, and with our peer companies. We believe, however, that it is important for investors to understand that such intangible assets contribute to revenue generation, intangible asset amortization will recur in future periods until such intangible assets have been fully amortized and that interest and income tax expenses will recur in future periods. In addition, Adjusted EBITDA may not be comparable to similarly titled measures used by other companies in our industry or across different industries.

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