WOOD Flash – AROBS Transilvania Software: takeaways from the 3Q23 earnings call
AROBS’ 3Q23 results showed a marked qoq improvement in the adjusted EBITDA margin, to 19.9%, vs. 16.2%, as: 1) the impact of the strong growth in headcount and wage costs, in particular, abates gradually; and 2) the cost savings from integration replaces the M&A transaction related costs seen in 2H22-1H23. We also see it as positive that the acquired companies are generating similar adjusted EBITDA margins (19.1% in 9M23) as the organic business (a 9M23 margin of 20.1%), even before integrations (a process that, typically, requires at least 12 months). We continue to expect margins to return to our mid-20% target next year. In the meantime, AROBS will continue with its planned capital increase, which should help expand its shareholders’ base to institutional investors (and likely include joining the benchmark BET indices). We are BUYers of the stock.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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