MiX Telematics (MIXT) Tops Q4 EPS by 6c, Revenues Beat; Offers FY20 EPS/Revenue Guidance Above Consensus

MiX Telematics (NYSE: MIXT) reported Q4 EPS of $0.24, $0.06 better than the analyst estimate of $0.18. Revenue for the quarter came in at $35.1 million versus the consensus estimate of $34.69 million.

Fourth quarter fiscal 2019:

• Subscription revenue of R444 million ($30.7 million), up 13.1% year over year on a constant currency basis
• Net subscriber additions of 14,400 bringing the total base to over 750,000, up 11% year over year
• Adjusted EBITDA of R168 million ($11.6 million), up 29% year over year
• Adjusted EBITDA margin of 33.0%, up 430 basis points year over year
• Diluted adjusted earnings per share of 14 South African cents, or 24 U.S. cents per diluted ADS, up 40% year over year
• Net cash from operating activities of R129 million ($8.9 million)
• Free cash flow of R80 million ($5.5 million), up from R58 million ($4.0 million) compared to the fourth quarter of fiscal 2018

“Our fourth quarter marked a solid continuation of trends we have experienced throughout the year. The strong performance was driven by the continued growth in our premium fleet subscriptions globally, improvements in ARPU and ongoing operating leverage in the business,” said Stefan Joselowitz, Chief Executive Officer of MiX Telematics. “During fiscal 2019, we upwardly revised our long-term adjusted EBITDA margin target to 35% plus, as we expanded our margins by almost 500 basis points to 30.5% and generated record positive free cash flow of R177 million. We remain confident in our ability to achieve our long-term goals given our strong pipeline and ability to further enhance margin accretion across the business.”

GUIDANCE:

MiX Telematics sees FY2020 EPS of $0.78-$0.87, versus the consensus of $0.76. MiX Telematics sees FY2020 revenue of $151.7-153.8 million, versus the consensus of $147.74 million.

Based on information as of today, May 14, 2019, the Group is issuing the following financial guidance for the full 2020 fiscal year:

• Subscription revenue - R1,935 million to R1,955 million ($134.5 million to $135.9 million), which would represent subscription revenue growth of 14.3% to 15.5% compared to fiscal 2019. On a constant currency basis, this would represent subscription revenuegrowth of 12.8% to 14.0%.
• Total revenue - R2,182 million to R2,212 million ($151.7 million to $153.8 million), which would represent revenue growth of 10.4% to 12.0% compared to fiscal 2019. On a constant currency basis, this would represent revenue growth of 8.9% to 10.5%.
• Adjusted EBITDA - R680 million to R701 million ($47.3 million to $48.7 million), which would represent Adjusted EBITDA growth of 12.8% to 16.3% compared to fiscal 2019.
• Adjusted earnings per diluted ordinary share of 45.1 to 50.2 South African cents based on a weighted average of 585 million diluted ordinary shares in issue, and based on an effective tax rate of 28.0%. At a ratio of 25 ordinary shares to one ADS, this equates to adjusted earnings per diluted ADS of 78.4 to 87.2 U.S. cents.

For the first quarter of fiscal 2020 the Group expects subscription revenue to be in the range of R451 million to R457 million ($31.4 million to $31.8 million) which would represent subscription revenue growth of 15.5% to 17.1% compared to the first quarter of fiscal 2019. On a constant currency basis, this would represent subscription revenue growth of 10.5% to 12.1%.

The key assumptions used in deriving the forecast are as follows:

• Growth in subscription revenue and subscribers are based on expected growth rates related to market conditions and takes into account growth rates achieved previously.
• Achieving hardware sales according to expectations, as hardware sales are dependent on the volumes of bundled solutions selected by customers.
• An average forecast exchange rate for the 2020 fiscal year of R14.3000 per $1.00.

For earnings history and earnings-related data on MiX Telematics (MIXT) click here.

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