CIBC - Upside Scenario: C$5.50
Key Points
Q1 revenue was $168.5MM and higher than our estimate of $56.9MM
(FactSet $109.4MM). Adjusted EBITDA was ~$79.1MM vs. our estimate at $6.5MM (FactSet $61.1MM), while EPS were $0.44 vs. us at -$0.02 (FactSet $0.21).
Recall ETC was expected to generate revenue of $95MM to $120MM and $12.5MM to $15MM in annual adjusted EBITDA over the next 12 to 18 months. Our 2022 forecast for ETC contributes $120MM in revenue and ~$12MM of EBITDA to the ITS segment.
ETC brings scale and fit within Quarterhill’s ITS segment while expanding its presence in the tolling market, which management expects will benefit from industry tailwinds that include the recent U.S. infrastructure bill. Additionally, ETC will complement and provide IRD with new opportunities. There is strong demand for mobility technology for road and bridge infrastructure that is expected to be funded. This has led ITC’s “massive” pipeline of $4B in opportunities. As the pipeline converts into awards, it has the potential to drive digit-double revenue growth at Quarterhill’s ITC unit for a number of
years