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HAI provides mission-critical infrastructure solutions globally for video streaming and networking companies and is now trading at 12.8x times' EV/EBITDA. In the 3Q, HAI’s revenue grew 18.8% to $35M, beating estimates of $31M and EPS was $0.02 beating estimates of -$0.07. Gross margin also improved significantly to 71.9% from 66.1% last year. The acquisitions are indeed working well. The balance sheet is fine, with net debt of $7M and net debt/EBITDA of around 1.1x. Overall, a good quarter with margins improving quite meaningfully, and the company has been growing largely through acquisitions in the last few years. The outlook has improved, we think. The company is still small and volatile, but downside may be limited as ET is still likely interested buying the company, and would be moreso if the price drops.
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