FormerXBC Inc XEBEQ

Getting tired of defending Xebec

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Nevertheless I'll plod away.

The Beacon analyst wrote:

“Adjusted EBITDA margin is expected to be in the range of -3 per cent to -5 per cent (versus -3 per cent to -4 per cent previously), implying Q4/FY21E adjusted EBITDA of ~$2.6-$4.7 million. At the low end, this looks favourable to consensus ($1.6 million) and inline with our forecast ($2.7 million) ahead of the results.

The first sentence just regurgitates management's guidance revision frm the Q3 release. ( year-end ebitda margins of -3% to -5% )

Let's take a look at that.

Given management's full-year revenue guidance of $120 -$130 million, lets assume Q4 revenues come in at the mid-point at $45 million, and year-end revenues are $125 million.

In order to meet guidance of -3% to -5%, Xebec will have to report year-end ebitda
of -$3.75 million to -$6.25 million.

Year-to-date ebitda is -$10.1 million.

Xebec will have to report Q4 ebitda of $3.85 million to $6.35 million in order to meet guidance, rather than $2.6 million to $4.7 million as this analyst suggests.

This is very simple math.

Q4 ebitda will be $3.85 to $6.35 million, up from $300,000 in Q3 and Q2 ebitda of
-$4.6 million.

Obviously, either of these numbers will compare very favorably with the consensus number of $1.6 million.

If anyone can spot a flaw somewhere in my math, anywhere, I not only welcome you to do so I invite it.

I'll finish with a simple question.

"If Xebec reports Q4 ebitda of $3.85 to $6.35 million, as per management guidance, what assumptions is this analyst making to predict full-year 2022
ebitda of $8 million?"