Enghouse Systems Limited (TSX:ESL) shares fell by more than 20% after the enterprise software solutions company posted first-quarter results that showed a year-over-year decline in revenue and profit.
For the three months ended January 31, 2023, the Markham, Ontario-based company achieved revenue of $106.4 million, compared to revenue of $111.1 million in the year-ago quarter.
Net income was $17 million or $0.31 per diluted share, down from $21.6 million or $0.39 per diluted share for the comparable period in the previous year.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was $32.3 million or $0.58 per diluted share, compared to $38.6 million or $0.69 per diluted share in the first quarter of 2022.
“Despite the ongoing shift to the cloud, inflation, rising interest rates, economic uncertainty and some competitors experiencing significant financial distress announcing restructuring and employee layoffs, Enghouse continues to operate consistently with positive income and operating cashflows,” the company said.
“Enghouse remains well positioned to complete and fund future acquisitions.”
The company noted that subsequent to quarter end, it announced the acquisitions of Qumu and Navita with integrations progressing according to plan.
Shares of Enghouse had fallen 21.3% to C$34.28 at noon on Friday.
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