Quisitive Technology Solutions Inc V.QUIS

Scotia's Earnings Preview

[savyinvestor333]

Software & Services

Quisitive Technology Solutions, Inc.

• QUIS-V: C$0.57
• Target: C$2.60
• Rating: Sector Outperform

Q1/22 Preview

OUR TAKE: Neutral. Quisitive is scheduled to release its Q1/22 earnings on Wednesday, May 25, 2022, post–market close. The conference call will be hosted at 4:30 p.m. ET (U.S./international live-call phone number: 877-704-4453/201-389-0920).

Quisitive is a notable fintech story, one that is being closely watched by many, ourselves included, to see where things go and how LedgerPay will evolve in years to come. Q1/22 was a busy quarter for the company, getting through the initial stages of LedgerPay commercialization. The company is currently in the pilot phase: the LedgerPay platform is being rolled out to select group of customers to iron out any creases, before it is released to the broader customer segment. Post-completion of the pilot phase, the company will start migrating BankCard customers onto the LedgerPay portal.

The company provided investors with a detailed company outlook and outlined its upcoming plans with its Q4/21 and F2021 results; please refer to our note, A Transformational Year Ahead!, for details. We expect Q1/22’s results to be an extension of Q4/21’s, with additional growth coming from the Catapult acquisition. We expect Q1/22 to be another strong quarter and forecast reported net revenues of ~$41 million, resulting in gross profit of ~$15 million, adjusted EBITDA of ~$7 million and adjusted EPS of ~$0.00. We estimate free cash flow for the quarter of ~$6 million, with cash on hand as of Q1/22-end at ~$18 million and net leverage of ~2.85x.

Exhibit 1 - QUIS - Q1/22 Earnings Preview

Source: Company reports; FactSet; Scotiabank GBM estimates.

During the conference call, we will look for additional clarity on the Catapult integration, LedgerPay growth, the potential impact of inflation on the business, and the company’s M&A strategy. We maintain our Sector Outperform rating and C$2.60 one-year price target.