Latest news with #freecashflow
Yahoo
2 days ago
- Business
- Yahoo
Statutory Earnings May Not Be The Best Way To Understand Zedcor's (CVE:ZDC) True Position
Zedcor Inc. (CVE:ZDC) recently released a strong earnings report, and the market responded by raising the share price. However, we think that shareholders should be aware of some other factors beyond the profit numbers. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). In plain english, this ratio subtracts FCF from net profit, and divides that number by the company's average operating assets over that period. This ratio tells us how much of a company's profit is not backed by free cashflow. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While it's not a problem to have a positive accrual ratio, indicating a certain level of non-cash profits, a high accrual ratio is arguably a bad thing, because it indicates paper profits are not matched by cash flow. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Zedcor has an accrual ratio of 0.48 for the year to March 2025. As a general rule, that bodes poorly for future profitability. And indeed, during the period the company didn't produce any free cash flow whatsoever. Even though it reported a profit of CA$2.72m, a look at free cash flow indicates it actually burnt through CA$18m in the last year. We also note that Zedcor's free cash flow was actually negative last year as well, so we could understand if shareholders were bothered by its outflow of CA$18m. Having said that, there is more to consider. We can look at how unusual items in the profit and loss statement impacted its accrual ratio, as well as explore how dilution is impacting shareholders negatively. View our latest analysis for Zedcor That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. To understand the value of a company's earnings growth, it is imperative to consider any dilution of shareholders' interests. As it happens, Zedcor issued 12% more new shares over the last year. As a result, its net income is now split between a greater number of shares. To talk about net income, without noticing earnings per share, is to be distracted by the big numbers while ignoring the smaller numbers that talk to per share value. Check out Zedcor's historical EPS growth by clicking on this link. Three years ago, Zedcor lost money. The good news is that profit was up 90% in the last twelve months. But EPS was less impressive, up only 50% in that time. So you can see that the dilution has had a bit of an impact on shareholders. In the long term, earnings per share growth should beget share price growth. So it will certainly be a positive for shareholders if Zedcor can grow EPS persistently. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For the ordinary retail shareholder, EPS is a great measure to check your hypothetical "share" of the company's profit. The fact that the company had unusual items boosting profit by CA$466k, in the last year, probably goes some way to explain why its accrual ratio was so weak. While we like to see profit increases, we tend to be a little more cautious when unusual items have made a big contribution. When we crunched the numbers on thousands of publicly listed companies, we found that a boost from unusual items in a given year is often not repeated the next year. Which is hardly surprising, given the name. If Zedcor doesn't see that contribution repeat, then all else being equal we'd expect its profit to drop over the current year. Zedcor didn't back up its earnings with free cashflow, but this isn't too surprising given profits were inflated by unusual items. The dilution means the results are weaker when viewed from a per-share perspective. On reflection, the above-mentioned factors give us the strong impression that Zedcor'sunderlying earnings power is not as good as it might seem, based on the statutory profit numbers. If you want to do dive deeper into Zedcor, you'd also look into what risks it is currently facing. You'd be interested to know, that we found 1 warning sign for Zedcor and you'll want to know about this. In this article we've looked at a number of factors that can impair the utility of profit numbers, and we've come away cautious. But there is always more to discover if you are capable of focussing your mind on minutiae. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
SentinelOne Inc (S) Q1 2026 Earnings Call Highlights: Strong Revenue Growth and Strategic ...
Revenue: $229 million, a growth of 23% year-over-year. International Revenue Growth: 27%, representing 38% of quarterly revenue. Total ARR: $948 million, a growth of 24% year-over-year. Customers with ARR of $100,000 or more: Grew 22% to 1,459. Gross Margin: 79%. Operating Margin: Expanded over 4 percentage points year-over-year to negative 2%. Free Cash Flow Margin: Record 20% for the quarter. Q2 Revenue Guidance: Approximately $242 million, growth of 22%. Full Year Revenue Guidance: $996 million to $1.1 billion, representing 22% growth. Q2 Gross Margin Guidance: Approximately 79%. Full Year Gross Margin Guidance: Between 78.5% and 79.5%. Q2 Operating Margin Guidance: Breakeven, implying a year-over-year improvement of approximately 300 basis points. Full Year Operating Margin Guidance: Between positive 3% and 4%, an improvement of over 650 basis points at the midpoint compared to fiscal year '25. Share Repurchase Authorization: $200 million open-ended. Warning! GuruFocus has detected 3 Warning Sign with S. Release Date: May 28, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. SentinelOne Inc (NYSE:S) exceeded revenue growth expectations with a 23% increase and achieved a record free cash flow margin of 20%. The company expanded its customer base and drove platform adoption across AI, cloud, data, and endpoint, with Purple AI achieving triple-digit year-over-year growth in quarterly bookings. SentinelOne Inc (NYSE:S) introduced a unified cloud security suite, enhancing real-time defense and operations, which gained strong traction among cloud security opportunities. The company's data solutions surpassed $100 million in ARR, highlighting the momentum of its AI SIEM offering and increasing preference for its modern AI-driven cloud-native data solution. SentinelOne Inc (NYSE:S) achieved FedRAMP high authorization for multiple solutions, including Purple AI, marking it as the first cybersecurity agentic AI solution approved for US government organizations. The company observed elongated sales cycles due to macroeconomic uncertainty, impacting Q1 net new ARR. SentinelOne Inc (NYSE:S) took a more measured stance on full-year growth assumptions due to potential macro volatility. Despite strong demand, the company experienced slip deals in Q1, attributed to macro volatility rather than competitive pressures. The guidance for the full fiscal year 2026 was slightly reduced, reflecting a decrease in internal expectations around net new ARR. The company noted that the federal sector faced longer sales cycles and more approval requirements, affecting deal timelines. Q: Can you discuss the incremental ARR in the quarter and what gives you confidence that the decline is macro-related and not competitive? A: Tomer Weingarten, CEO: We observed improved trends in May and expect year-over-year net growth in Q2 to improve relative to Q1. The decline was mainly due to slip deals rather than elevated churn, which was in line with expectations. The macro volatility in Q1 was unexpected, but fundamentals remain intact with strong demand and pipeline. Q: Can you elaborate on the guidance assumptions and whether the April trends are expected to persist throughout the year? A: Barbara Larson, CFO: Our outlook reflects new business growth throughout the year. We saw improved trends in May and are being cautious about potential external disruptions. The revenue guide was decreased by 1%, indicating a slight reduction in internal expectations for net new ARR. Q: What specific feedback did you receive from customers regarding the slip deals, and do you expect these deals to close in the July quarter? A: Tomer Weingarten, CEO: The macro backdrop changed unexpectedly in Q1, leading to longer sales cycles and paused spending decisions. We haven't seen deal cancellations, and we expect 22% growth this year. Trends improved in May, with strong demand and win rates, but we are cautious about potential disruptions. Q: Can you discuss the progression of productivity and bundle sales, and whether elongated sales cycles were more pronounced in certain regions or verticals? A: Tomer Weingarten, CEO: The elongated sales cycles were more pronounced in larger deals and globally, but mid-market remained strong. Our platform's breadth and depth are significant, and we're making it more flexible for customers. Our AI and data business are major growth drivers, and we expect meaningful accretion from changing our bundling structure. Q: How do you view the SIEM market, and what is the pipeline for competitive displacements? A: Tomer Weingarten, CEO: The SIEM market is seeing augmentation and net new data storage needs. Our AI SIEM allows customers to unify data without migration, addressing real-time threat detection needs. There's growing interest in cloud-native SIEM solutions due to cost benefits and real-time capabilities, which legacy providers struggle with. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
6 days ago
- Business
- Yahoo
Metals Exploration's (LON:MTL) Soft Earnings Are Actually Better Than They Appear
Metals Exploration plc's (LON:MTL) stock was strong despite it releasing a soft earnings report last week. Our analysis suggests that investors may have noticed some promising signs beyond the statutory profit figures. Our free stock report includes 2 warning signs investors should be aware of before investing in Metals Exploration. Read for free now. In high finance, the key ratio used to measure how well a company converts reported profits into free cash flow (FCF) is the accrual ratio (from cashflow). To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. The ratio shows us how much a company's profit exceeds its FCF. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. That's because some academic studies have suggested that high accruals ratios tend to lead to lower profit or less profit growth. Over the twelve months to December 2024, Metals Exploration recorded an accrual ratio of -0.40. That indicates that its free cash flow quite significantly exceeded its statutory profit. To wit, it produced free cash flow of US$79m during the period, dwarfing its reported profit of US$25.6m. Metals Exploration's free cash flow improved over the last year, which is generally good to see. Notably, the company has issued new shares, thus diluting existing shareholders and reducing their share of future earnings. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. In order to understand the potential for per share returns, it is essential to consider how much a company is diluting shareholders. In fact, Metals Exploration increased the number of shares on issue by 27% over the last twelve months by issuing new shares. Therefore, each share now receives a smaller portion of profit. To celebrate net income while ignoring dilution is like rejoicing because you have a single slice of a larger pizza, but ignoring the fact that the pizza is now cut into many more slices. You can see a chart of Metals Exploration's EPS by clicking here. Metals Exploration has improved its profit over the last three years, with an annualized gain of 127% in that time. Net profit actually dropped by 79% in the last year. Unfortunately for shareholders, though, the earnings per share result was even worse, declining 77%. And so, you can see quite clearly that dilution is having a rather significant impact on shareholders. In the long term, if Metals Exploration's earnings per share can increase, then the share price should too. But on the other hand, we'd be far less excited to learn profit (but not EPS) was improving. For that reason, you could say that EPS is more important that net income in the long run, assuming the goal is to assess whether a company's share price might grow. In conclusion, Metals Exploration has a strong cashflow relative to earnings, which indicates good quality earnings, but the dilution means its earnings per share are dropping faster than its profit. Based on these factors, we think that Metals Exploration's profits are a reasonably conservative guide to its underlying profitability. So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Case in point: We've spotted 2 warning signs for Metals Exploration you should be aware of. Our examination of Metals Exploration has focussed on certain factors that can make its earnings look better than they are. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
SATS' earnings increase more than three-fold for FY2025 from expanded network and business volume growth
SATS' free cash flow turned positive $228.3 million as at the end of March, and the group generated a positive free cash flow of $155.2 million for the fourth quarter alone. SATS has reported earnings of $243.8 million for the full year FY2025 ended March 31, 2025, increasing more than three-fold in earnings compared to the same period a year ago. For the 2HFY2025, earnings came in at $109.1 million, and for the 4QFY2025, earnings improved to $38.7 million. For the full year FY2025, group revenue grew 13% y-o-y to $5.8 billion, driven by a growth in business volumes and contributions from an expanded network of operations. SATS' Gateway Services revenue grew 10.6% y-o-y to $4.5 billion, reflecting strong air cargo performance across multiple sectors including high-tech shipments and e-commerce. This growth was further supported by volume shifts from ocean freight due to ongoing geopolitical uncertainties. Food Solutions delivered revenue of $1.4 billion, a 22.0% y-o-y increase, as global aviation travel continued its recovery trajectory, driving higher demand for inflight meals. Group expenditure for FY2025 increased 9.5% y-o-y to $4.8 billion in line with the expansion in business activities, and SATS recorded an operating profit of $475.7 million for FY2025, a 94.8% y-o-y increase. As a result, operating profit margin expanded from 4.7% to 8.2%, reflecting favourable operating leverage. The share of earnings from associates and joint ventures grew by 3.9% to $114.3 million, bolstered by overall business volume growth across our network, a one-off recovery gain for a long outstanding debt in Indonesia, and partially offset by bonus catch-up in several operating units for good performance. As at end March, total equity grew to $2.77 billion, up from the $209.4 million reported in the same period a year ago driven by profits generated during FY2025. The group's total assets rose to $8.88 billion as at end March 2025, largely attributable to increased right-of-use assets as it expanded its warehouse capacity to support business growth. As at end March, total liabilities increased to S$6.11 billion, mainly due to higher lease liabilities, partially offset by the repayment of $200 million in Singapore dollar Medium Term Notes (SGD MTN) that matured in March 2025. SATS' free cash flow turned positive $228.3 million as at the end of March, due to higher operating profit achieved during the year with financial and liquidity management. The group generated a positive free cash flow of $155.2 million for the fourth quarter alone, an improvement of $36.7 million y-o-y signalling the group's enhanced cash generation capabilities. SATS' board of directors have declared a final dividend of 3.5 cents per share, combined with the interim dividend of 1.5 cents per share, this brings the total full-year dividend to 5 cents per share. The group says that it will continue to pare down debt, reinvest in the business and enhance shareholder returns. Shares in SATS closed flat at $2.98 on May 23. 8 mil despite y-o-y revenue growth UnUsUal issues profit guidance for full year results, expects overall net loss 'Nationalisation not on the cards'; SingPost to continue streamlining business, says group CFO Isaac Mah Read more stories about where the money flows, and analysis of the biggest market stories from Singapore and around the World Get in-depth insights from our expert contributors, and dive into financial and economic trends Follow the market issue situation with our daily updates Or want more Lifestyle and Passion stories? Click here
Yahoo
7 days ago
- Business
- Yahoo
Keystone Law Group's (LON:KEYS) Solid Profits Have Weak Fundamentals
Keystone Law Group plc (LON:KEYS) announced strong profits, but the stock was stagnant. Our analysis suggests that this might be because shareholders have noticed some concerning underlying factors. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. One key financial ratio used to measure how well a company converts its profit to free cash flow (FCF) is the accrual ratio. To get the accrual ratio we first subtract FCF from profit for a period, and then divide that number by the average operating assets for the period. The ratio shows us how much a company's profit exceeds its FCF. Therefore, it's actually considered a good thing when a company has a negative accrual ratio, but a bad thing if its accrual ratio is positive. While having an accrual ratio above zero is of little concern, we do think it's worth noting when a company has a relatively high accrual ratio. Notably, there is some academic evidence that suggests that a high accrual ratio is a bad sign for near-term profits, generally speaking. Over the twelve months to January 2025, Keystone Law Group recorded an accrual ratio of 0.32. Therefore, we know that it's free cashflow was significantly lower than its statutory profit, raising questions about how useful that profit figure really is. In fact, it had free cash flow of UK£5.5m in the last year, which was a lot less than its statutory profit of UK£8.55m. Keystone Law Group shareholders will no doubt be hoping that its free cash flow bounces back next year, since it was down over the last twelve months. That might leave you wondering what analysts are forecasting in terms of future profitability. Luckily, you can click here to see an interactive graph depicting future profitability, based on their estimates. Keystone Law Group didn't convert much of its profit to free cash flow in the last year, which some investors may consider rather suboptimal. Therefore, it seems possible to us that Keystone Law Group's true underlying earnings power is actually less than its statutory profit. But at least holders can take some solace from the 27% per annum growth in EPS for the last three. At the end of the day, it's essential to consider more than just the factors above, if you want to understand the company properly. In light of this, if you'd like to do more analysis on the company, it's vital to be informed of the risks involved. To help with this, we've discovered 2 warning signs (1 is a bit concerning!) that you ought to be aware of before buying any shares in Keystone Law Group. This note has only looked at a single factor that sheds light on the nature of Keystone Law Group's profit. But there are plenty of other ways to inform your opinion of a company. For example, many people consider a high return on equity as an indication of favorable business economics, while others like to 'follow the money' and search out stocks that insiders are buying. While it might take a little research on your behalf, you may find this free collection of companies boasting high return on equity, or this list of stocks with significant insider holdings to be useful. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
