Hey Nelson, the CRNT presentation of its income statement lists R&D as part of its Operating expenses, so I'd have to assume that any discussion by them regarding OpEx includes those expenses. Sales and marketing has been increasing as a %of revenue, but other areas have been reduced so the overall pretax margins have been increasing nicely.
I don't know what that analyst meant by saying opex in the Q4 would be increasing dramatically y/y. In Q4 2022, they had 22.9MM in opex, so an amount just over 23MM is not a large increase in my book. I dropped pretax margins down to 7%, and used a higher tax rate of 21% to get around 0.05/sh in fd eps for Q4. The acquisition probably won't close until close to the end of the quarter, so no meaningful dilution either way. That 0.05 is a bit below the current non-GAAP estimate of 0.06 for Q4, so perhaps a little bit of shoot first selling by investors disappointed that the numbers weren't better.
I like the sounds of their new acq. That company has higher GMs, and should be accretive to earnings by Q3 2024. That adds about 25-29MM in Rev, on top of organic growth of 8-9%. Wouldn't surprise me if they can earn 0.23+ in FY24. But that is also way lower than the 0.30 estimate that I see on SA and Merrill for next year. I have to assume that is non-GAAP. The Yahoo est must be GAAP. I've been a buyer in the 1.75 area and would be more aggressive in the 1.60s
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