EXFO Inc (NASDAQ:EXFO) Q4 2019 Earnings Conference Call Transcript

Oct 09, 2019 • 05:00 pm ET

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EXFO Inc (NASDAQ:EXFO) Q4 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good day and welcome to EXFO's Fourth Quarter and Year End Conference Call for Fiscal 2019. Today's conference is being recorded. At this time, I would like to turn the conference over to Vance Oliver, EXFO's Director of Investor Relations. Please go ahead.

Executive
Vance Oliver

Good afternoon and welcome to EXFO's Fourth Quarter and Year End Conference Call for Fiscal 2019. With me on the line today are Philippe Morin, EXFO's Chief Executive Officer and Pierre Plamondon, CFO and Vice President of Finance. Germain Lamonde, EXFO's Founder and Executive Chairman will also be available to answer questions during the Q&A period.

A reminder that this conference call will include certain forward-looking statements and our estimates concerning our intents, beliefs or expectations regarding future events that may affect EXFO. Please note that such comments will be affected by risks and or uncertainties which may cause the actual results of the Company to be materially different from those expressed or implied today. For more information about EXFO, I encourage you to review our Form 20-F, which is on file with the Securities and Exchange Commission.

Our Annual Information Form is available with Canadian Securities Commission as well. Please note that non-IFRS numbers may be used during this conference call. A reconciliation of these non-IFRS numbers to our IFRS results is available on our website at www.exfo.com/investors. Although our amounts in this conference call are expressed in US dollars unless otherwise indicated. At this point, I will turn the call over to Philippe.

Executive
Philippe Morin

All right, thanks, Vance and good afternoon, everyone. So EXFO reported a strong fiscal 2019 on all of our key financial metrics with growth in revenue, in bookings, in earnings and as well on cash flow from operations. Now to highlight some of our key financial numbers. I'll start with revenue. They are increased by 6.4% to a record high $287 million in 2019 and bookings, improved 11.2% to a high of $298 million.

Obviously, we benefited from a full-year contribution from the Astellia acquisition in 2019. It's also important to note that the double-digit increase in bookings year-over-year reflects four monitoring contract wins now related to 5G deployment, including a multi-year $4 million booking order in our fourth quarter of 2019. Now, these multiyear, multimillion dollar deals are essential for EXFO to achieve the necessary scale to better absorb our fixed cost and with recurring revenues representing now 15% of our total revenues in 2019. And that's up from low-double digit -- low double-digit numbers we had in our prior years.

Turning to the bottom line, our IFRS net loss was reduced by nearly 80% to $2.5 million in 2019. Our adjusted EBITDA surged 49% to $25.6 million, surpassing our annual profitability target of $24 milion and our cash flow from operations improved 20% year-over-year to $17.2 million. So in addition, we fully integrated our transform -- transformative acquisitions of Astellia. We completed our reorganization plan to booster -- to bolster efficiency and profitability, all while maintaining a sound operational discipline.

Overall,