MiX Telematics (MIXT) Reports Q3 Revenues Miss

MiX Telematics (NYSE: MIXT) reported Q3 revenue for the quarter came in at $33.9 million versus the consensus estimate of $35.16 million.

Third quarter fiscal 2020 (year over year):

• Subscription revenue of R476 million ($33.9 million), up 8% on a constant currency basis
• Net subscriber additions of 23,200, bringing the total subscriber base to over 812,000, up 10%
• Adjusted EBITDA of R162 million ($11.5 million), or 30.1% Adjusted EBITDA margin
• The Company will become a U.S. domestic filer for SEC purposes on April 1, 2020

“MiX’s third quarter results reflect continued revenue growth, adjusted EBITDA margins that again exceeded 30%, and more than 23,000 net subscriber additions,” said Stefan Joselewitz, Chief Executive Officer of MiX Telematics. “While we continue to work through some impact from macroeconomic and global trade headwinds, we remain confident that our diversified global footprint and the breadth of our product portfolio will continue to support our attractive combination of meaningful growth and substantial profitability.”

Business Outlook

MiX Telematics has translated U.S. Dollar amounts in this Business Outlook paragraph from South African Rand at the exchange rate of R14.5365 per $1.00, which was the R/$ exchange rate reported by Oanda.com as at January 27, 2020.

The Company will report the fourth quarter and full 2020 fiscal year results in accordance with IFRS and U.S. Generally Accepted Accounting Principles (U.S. GAAP). The following guidance is in accordance with IFRS only and will differ in some respects from the Company’s U.S. GAAP results.

Based on information as of today, January 30, 2020, the Company is issuing the following financial guidance, which is in accordance with IFRS, for the full 2020 fiscal year:

• Subscription revenue - R1,870 million to R1,880 million ($128.6 million to $129.3 million), which would represent subscription revenue growth of 10.4% to 11.0% compared to fiscal 2019. On a constant currency basis, this would represent subscription revenue growth of 8.4% to 9.0%. Previous guidance was R1,886 million to R1,901 million.
• Total Revenue - R2,104 million to R2,124 million ($144.7 million to $146.1 million), which would represent revenue growth of 6.5% to 7.5% compared to fiscal 2019. On a constant currency basis, this would represent revenue growth of 4.4% to 5.4%. Previous guidance was R2,119 million to R2,144 million.
• Adjusted EBITDA - R625 million to R643 million ($43.0 million to $44.2 million), which would represent Adjusted EBITDA growth of 3.7% to 6.7% compared to fiscal 2019. Previous guidance was R650 million to R665 million.
• Adjusted earnings per diluted ordinary share of 38.7 to 41.3 South African cents based on 569 million diluted ordinary shares in issue (previous guidance was 41.6 to 45.1 South African cents based on 570 million diluted ordinary shares in issue), and based on an effective tax rate of 28.0% to 30.0%. At a ratio of 25 ordinary shares to one ADS, this equates to adjusted earnings per diluted ADS of 66.6 to 71.0 U.S. cents.

For the fourth quarter of fiscal 2020, the Company expects subscription revenue to be in the range of R468 million to R478 million ($32.2 million to $32.9 million), which would represent subscription revenue growth of 5.5% to 7.7% compared to the fourth quarter of fiscal 2019. On a constant currency basis, this represents subscription revenue growth of 4.1% to 6.3% compared to the fourth quarter of fiscal 2019.

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

• Growth in subscription revenue and vehicles under subscription are based on expected growth rates related to market conditions and takes into account growth rates achieved previously.
• Achieving hardware sales according to expectations. Hardware sales are dependent on the volumes of bundled solutions selected by customers.
• An average forecast exchange rate for the 2020 fiscal year of R14.5841 per $1.

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

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