Quarterhill Inc. (QTRH) Tops Q1 EPS by 2c, Revenues Beat

Quarterhill Inc. (NASDAQ: QTRH) reported Q1 EPS of $0.00, $0.02 better than the analyst estimate of ($0.02). Revenue for the quarter came in at $39.8 million versus the consensus estimate of $24.26 million.

• Revenues of $39.8 million, which is above the estimated range of $33.0-$36.0 million provided previously
• Recurring revenues of $5.6 million
• Adjusted EBITDA* of $12.5 million
• Net income of $29,000, or $0.00 per basic and diluted common share
• Cash and equivalents were $53.8 million at March 31, 2019. Cash and equivalents declined in Q1 2019 due to working capital adjustments which saw accounts receivable increase $27.1 million. The majority of that increase was collected post quarter-end
• WiLAN, along with several of its wholly‑owned subsidiaries, entered into a comprehensive semiconductor license agreement with SK hynix Inc.
• Subsequent to quarter-end, John Gillberry named Chairperson of the Board and James Skippen named Vice-Chairperson of the Board
• Subsequent to quarter-end, WiLAN's wholly-owned subsidiary, Polaris Innovations Limited ("Polaris"), granted a term license for certain memory interface technology patents owned by Polaris to NVIDIA Corporation

"Q1 was a strong start to the year in which we continued our momentum from Q4 and delivered significant revenue and Adjusted EBITDA growth both year-over-year and sequentially," said Doug Parker, President and CEO, Quarterhill. "With WiLAN, our licensing business, we had the type of quarter that illustrates the positive aspects of its revenue variability, as that business generated almost $15.0 million in Adjusted EBITDA and accordingly a significant amount of cash flow that can be used to support our M&A strategy. The recent license announcement with NVIDIA reflects that WiLAN's momentum has continued into Q2 and on the expense side we are already benefitting from the lower cost base established through the 2018 restructuring."

"Regarding our M&A activities, while it is still somewhat of a seller's market, we are experiencing good activity with deal flow and continue to make progress moving a number of opportunities through our pipeline and diligence process. With a focus on expanding our overall M&A coverage in general, we are seeing good opportunities to add stand-alone businesses to the portfolio and are also seeing promising tuck-in opportunities for IRD and VIZIYA in their existing markets and adjacencies. Those businesses continue to perform well, and we believe that an appropriate tuck-in could help to further accelerate their growth prospects."

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

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