Revenue Analysis
Total and Operating Revenue: Over the period, there has been a noticeable growth in both Total Revenue and Operating Revenue. As of the end of Q1 2024, Total Revenue stood at $857 million, up from $957.7 million in December 2023. This indicates a cyclical trend but with an upward trajectory across the three years.
Gross Profit margins: Gross Profit has also shown improvement. From March 2023’s $295.6 million, it rose to a significant $361.3 million by December 2023, further increasing to $323.3 million by March 2024. This reflects effective cost management allowing for more robust gross margins over time.
Cost Management
Cost of Revenue: The Cost of Revenue was highest in December 2023 at $596.4 million before slightly reducing to $533.7 million by March 2024. Fluctuations indicate varying costs associated with revenue generation.
Operating Expense and Total Expenses: Operating Expenses peaked at $263.9 million in December 2023 and adjusted to $259.3 million by March 2024. Total Expenses mirrored this pattern, suggesting expense management aligns closely with operating goals.
Profitability Analysis
EBITDA: EBITDA reached its highest at $195 million in September 2023, demonstrating strong earnings before interest, taxes, depreciation, and amortization. The subsequent quarters show a slight decline, aligning with normal business cycles but maintaining healthy profitability overall.
Operating Income: From a robust $167 million in September 2023, it tapered to $64 million by March 2024, underscoring variability in operational efficiency across the quarters.
Pretax Income and Net Income: Pretax income showed a solid increment from $37 million in March 2023 to peak at $147.2 million in September 2023. Net Income has shown consistent growth, culminating in a significant rise from $20.1 million in March 2023 to a peak of $69 million by the end of 2023.
Cash Flow Indicators
Reconciled Depreciation: There has been consistent investment in capital, as shown by the stable figures in reconciled depreciation, which fluctuates slightly around the $32-$34 million mark across the quarters.
Interest Expense: Interest Expense has increased over time, peaking at $16.5 million in December 2023, indicating rising costs associated with financing needs.
Taxation
Tax Rate: The Tax Rate fluctuated, being highest at 37.9% in March 2024, up from 21% in March 2023. This increase could be indicative of changes in tax legislation or differences in the geographical earnings mix.
Tax Provision: Tax Provision closely corresponds to pre-tax profits, showing a higher tax provision aligned with higher pretax earnings.
Tax Effect of Unusual Items: There has been variability, from gains to costs across the analyzed period, impacting taxation but these effects are considerably normalized in net figures.
Shareholder Metrics
Diluted and Basic EPS: Both EPS measures show an increasing trend, with Diluted EPS growing from $0.39 in March 2023 to $0.55 by March 2024. Basic EPS also showed a parallel increase. This indicates the growing profitability per share, beneficial for shareholders.
Average Shares and Net Income Available to Common Stockholders: The company maintained stability in the number of shares outstanding, indicating no significant dilution. Net Income available to common stockholders has grown, reflecting direct benefits to shareholders.
Conclusion
EEFT has demonstrated a solid performance over the past years, marked by revenue growth, effective cost management, increasing profitability, and stable cash flows. Shareholders benefit from increased EPS and stable share dilution. Companies should continue focusing on operational efficiency, cost management, and strategic investments to sustain profitability.