Digitalglobe, Inc. (DGI) Tops Q2 EPS by 7c, Beats on Revenues; Offers FY17 Revenue Guidance

Digitalglobe, Inc. (NYSE: DGI) reported Q2 EPS of $0.03, $0.07 better than the analyst estimate of ($0.04). Revenue for the quarter came in at $225.7 million versus the consensus estimate of $209.67 million.

Second Quarter Financial Summary:

• Grew total revenue 28.6% driven by our acquisition of The Radiant Group and strong performance in both U.S. government and diversified commercial.
• Grew U.S. government revenue $37.6 million, or 33.6%, primarily as a result of contracts obtained through our acquisition of The Radiant Group.
• Grew diversified commercial revenue $12.6 million, or 19.8%, as demand for capacity on WorldView-4 and timing of access minute consumption fueled a 29.1% increase in DAP revenue, while increased deliveries to civil government customers and demand for our Global Basemap product suite contributed to 12.3% growth in our other diversified commercial business.
• Net income of $2.7 million declined $9.5 million primarily due to incremental depreciation as a result of placing WorldView-4 in service in the first quarter 2017, lower capitalized interest, and merger costs.
• Net income margin was 1.2%.
• Adjusted EBITDA was $104.1 million, up 9.2%.
• Adjusted EBITDA margin declined to 46.1% year over year, primarily due to the growth in lower margin services business and increased costs for operating WorldView-4, while Adjusted EBITDA margin increased 58 bps from the previous quarter.
• Net cash flows from operations decreased 48.8% to $46.7 million due to timing of payments received on accounts receivable from certain DAP and Services customers, increased costs for WorldView-4, and merger costs.
• Free cash flow decreased to $31.8 million from $44.0 million.

GUIDANCE:

Digitalglobe, Inc. sees FY2017 revenue of $850-875 million, versus the consensus of $863.33 million.

Revised 2017 Revenue and Adjusted EBITDA Outlook:

• Revenue in a range of $850 million to $875 million.
• Adjusted EBITDA in a range of $385 million to $400 million, with full year contribution from Radiant reducing overall EBITDA margins by approximately 700 basis points.
• Capital expenditures of approximately $100 million.

For earnings history and earnings-related data on Digitalglobe, Inc. (DGI) click here.

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