Quarterhill Inc. (QTRH) Misses Q1 EPS by 8c, Miss on Revenues

Quarterhill Inc. (NASDAQ: QTRH) reported Q1 EPS of ($0.10), $0.08 worse than the analyst estimate of ($0.02). Revenue for the quarter came in at $12 million versus the consensus estimate of $24.26 million.

First quarter 2018 Highlights

• Revenue of $12.0 million
• Recurring revenues of $4.2 million, representing 35% of total revenue
• Adjusted EBITDA* of ($7.3) million
• Net loss of $12.0 million, or $0.10 per common share
• Hired Russ Stuebing as SVP, Corporate Development, and Neil Urquhart as SVP, Human Resources, to enhance acquisition capabilities

"Financial results in Q1 reflect the variability inherent with WiLAN, our patent license business, and point to the rationale for launching our diversification strategy in 2017," said Doug Parker, President and CEO of Quarterhill. "While we know the variability can also help this business, as it did in Q3 of last year, as we've stated in the past, WiLAN's performance is best judged over a longer period of time as opposed to quarter-to-quarter, and this was true once again in Q1. WiLAN has an active pipeline of license opportunities with a significant number of ongoing litigations, including multiple at the trial stage, but we will continue to be patient in our negotiations and will only settle when we believe we are being offered fair value for our patents."

"With IRD and VIZIYA, the first quarter of the calendar year is typically a seasonally slower period for both businesses and this was reflected in our Q1 results. In each case, we had a number of new wins in the quarter, saw continued expansion in both of their respective sales pipelines and we expect improvement as the year progresses with the results from both companies."

"Our broader vision for Quarterhill is to create substantial value by acquiring, integrating and building companies in the tech sector where we believe we can capitalize on permanent consolidation and convergence trends. We believe there is an established playbook for the type of software-focused M&A strategy we are pursuing that if well executed has been shown to deliver attractive returns to shareholders. Our priorities for 2018 include enhancing performance from our existing portfolio of companies as well as deploying capital on acquisitions. With a growing M&A pipeline and the recent addition of senior resources to our deal team, we expect to invest capital in 2018 but will remain patient and disciplined in our approach and focus only on those acquisition opportunities that meet our strict criteria."

For earnings history and earnings-related data on Quarterhill Inc. (QTRH) click here.

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