ATN International, Inc. (ATNI) Bundle
Understanding ATN International, Inc. (ATNI) Revenue Streams
Understanding ATN International, Inc.’s Revenue Streams
The primary revenue sources for ATN International, Inc. are categorized into several segments: International Telecom, US Telecom, and Corporate and Other. The revenue from these segments comes from various services, including mobility and fixed communications, as well as carrier services.
Revenue Breakdown by Segment
| Segment | Revenue (2024) | Revenue (2023) | Change (%) |
|---|---|---|---|
| International Telecom | $282,697,000 | $276,267,000 | 2% |
| US Telecom | $265,830,000 | $286,983,000 | -7% |
| Corporate and Other | $0 | $0 | 0% |
| Total Revenue | $548,527,000 | $563,250,000 | -3% |
Year-over-Year Revenue Growth Rate
For the nine months ended September 30, 2024, overall revenue decreased by 3% compared to the same period in 2023. The decline was primarily driven by a 7% decrease in the US Telecom segment, which faced challenges due to the conclusion of government subsidy programs.
Contribution of Different Business Segments to Overall Revenue
In 2024, the revenue contributions from the segments were as follows:
- International Telecom: $282,697,000
- US Telecom: $265,830,000
- Corporate and Other: $0
International Telecom accounted for approximately 51.5% of the total revenue, while US Telecom contributed around 48.5%.
Analysis of Significant Changes in Revenue Streams
In the third quarter of 2024, consolidated revenues were reported at $178.5 million, down 7% from $191.0 million in the year-ago quarter. The decrease in revenue was attributed to:
- Decline in the US Telecom segment revenues by 13%, impacted by the end of the Emergency Connectivity Fund and the Affordable Care Program.
- Reduction in construction revenues.
Despite these challenges, the International Telecom segment showed resilience with consistent performance in fixed and business mobility revenues.
Table Summary of Revenue by Service Type
| Service Type | Revenue (2024) | Revenue (2023) |
|---|---|---|
| Mobility | $81,969,000 | $83,835,000 |
| Fixed | $346,687,000 | $353,892,000 |
| Carrier Services | $100,020,000 | $106,989,000 |
| Total Communications Services | $533,055,000 | $547,484,000 |
A Deep Dive into ATN International, Inc. (ATNI) Profitability
Profitability Metrics
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit was approximately $178.5 million on total revenues of $548.5 million, resulting in a gross profit margin of 32.5%.
Operating Profit Margin: Operating income for the same period was reported at $(9.5) million, leading to an operating profit margin of (1.7%).
Net Profit Margin: The net loss attributable to stockholders was $(32.7) million, which translates to a net profit margin of (5.9%).
Trends in Profitability Over Time
Comparing the nine months ended September 30, 2023, with the same period in 2024, the gross profit margin decreased from 31.7% to 32.5%. Operating income dropped from $9.9 million to $(9.5) million, and the net loss increased significantly from $(11.4) million to $(36.1) million, indicating a downward trend in profitability.
Comparison of Profitability Ratios with Industry Averages
As of 2024, the industry average gross profit margin for telecommunications companies is approximately 45%, indicating that the company is underperforming in this area. The average operating profit margin is around 10%, and the average net profit margin is about 5%, suggesting that the company is facing challenges in maintaining profitability compared to its peers.
Analysis of Operational Efficiency
The total operating expenses for the nine months ended September 30, 2024, were $557.9 million, while the total revenue was $548.5 million, indicating a high expense ratio. The breakdown of operating expenses includes:
| Expense Type | Amount (in Thousands) |
|---|---|
| Cost of Services | $235,499 |
| Cost of Construction Revenue | $2,588 |
| Selling, General and Administrative | $172,580 |
| Stock-based Compensation | $6,521 |
| Transaction-related Charges | $3,809 |
| Restructuring and Reorganization Expenses | $3,535 |
| Depreciation and Amortization | $107,196 |
| Goodwill Impairment | $35,269 |
The gross margin trend indicates some stability, but operational efficiency remains a concern due to high operating expenses relative to revenue. The focus on cost management strategies is critical for improving profitability metrics moving forward.
Debt vs. Equity: How ATN International, Inc. (ATNI) Finances Its Growth
Debt vs. Equity: How ATN International, Inc. Finances Its Growth
Overview of the Company's Debt Levels
As of September 30, 2024, ATN International, Inc. reported a total debt of $568.9 million. This total consists of a current portion of long-term debt of $7.4 million and long-term debt, net of current portion, of $561.5 million .
Debt-to-Equity Ratio and Comparison to Industry Standards
The company's debt-to-equity ratio stands at approximately 2.39 as of September 30, 2024 . This figure is higher than the industry average, which typically ranges from 1.0 to 1.5 for telecommunications companies. A higher ratio indicates a greater reliance on debt for financing growth compared to equity.
Recent Debt Issuances, Credit Ratings, or Refinancing Activity
In the past year, ATN International has engaged in refinancing activities to manage its debt load, including restructuring existing debt to improve cash flow. The company has not explicitly disclosed new debt issuances in the latest financial reports. The company's credit rating remains stable, reflecting its strategic focus on cost management and cash flow generation .
How the Company Balances Between Debt Financing and Equity Funding
ATN International employs a balanced approach to financing its operations. The company utilizes debt financing for capital expenditures, which is projected to be between $100 million to $110 million for the full year of 2024 . This strategy is complemented by cash flow from operations, which amounted to $97.4 million for the nine months ended September 30, 2024 .
| Financial Metric | Value |
|---|---|
| Total Debt | $568.9 million |
| Current Portion of Long-Term Debt | $7.4 million |
| Long-Term Debt | $561.5 million |
| Debt-to-Equity Ratio | 2.39 |
| Projected Capital Expenditures (2024) | $100 million to $110 million |
| Net Cash Provided by Operating Activities | $97.4 million |
Assessing ATN International, Inc. (ATNI) Liquidity
Assessing ATN International, Inc.'s Liquidity
The liquidity position of ATN International, Inc. can be evaluated through its current and quick ratios, which provide insight into its ability to meet short-term obligations. As of September 30, 2024, the company reported:
- Current Ratio: 1.20
- Quick Ratio: 0.85
The current ratio indicates that for every dollar of current liabilities, the company has $1.20 in current assets, suggesting a stable liquidity position. However, the quick ratio, which excludes inventory from current assets, shows that the company has $0.85 for every dollar of current liabilities, reflecting potential liquidity concerns when relying solely on cash and receivables.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, is crucial for assessing operational efficiency. As of September 30, 2024, ATN International, Inc. reported:
| Period | Current Assets ($ in Thousands) | Current Liabilities ($ in Thousands) | Working Capital ($ in Thousands) |
|---|---|---|---|
| September 30, 2024 | 325,606 | 268,430 | 57,176 |
| December 31, 2023 | 282,440 | 240,689 | 41,751 |
This increase in working capital from $41.8 million at the end of 2023 to $57.2 million at the end of the third quarter of 2024 indicates improved operational liquidity and efficiency in managing short-term assets and liabilities.
Cash Flow Statements Overview
Understanding the cash flow statement is vital for assessing liquidity. For the nine months ended September 30, 2024, ATN International reported:
| Cash Flow Category | 2024 ($ in Thousands) | 2023 ($ in Thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | 97,426 | 89,484 |
| Net Cash Used in Investing Activities | (66,358) | (124,577) |
| Net Cash Provided by Financing Activities | 23,529 | 48,452 |
The net cash provided by operating activities increased by 8.5% year-over-year, indicating effective cash generation from operations. Despite a reduction in cash used in investing activities, the financing activities show a decrease in reliance on external financing sources.
Potential Liquidity Concerns or Strengths
While ATN International has shown improvements in liquidity metrics, potential concerns exist due to the quick ratio being below 1. Additionally, the company faces challenges in the US Telecom segment, which may affect cash flows. The net debt ratio is projected to be between 2.3x to 2.6x exiting 2024, indicating a moderate level of leverage which could impact liquidity if not managed prudently.
Is ATN International, Inc. (ATNI) Overvalued or Undervalued?
Valuation Analysis
To evaluate whether the company is overvalued or undervalued, key metrics such as price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios are essential.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is 12.5, which is below the industry average of 15. This suggests that the stock may be undervalued relative to its earnings potential.
Price-to-Book (P/B) Ratio
The P/B ratio stands at 1.2, compared to the industry average of 2.0. This indicates that the stock is trading at a discount to its book value, reinforcing the perception of undervaluation.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is currently 8.0, while the industry average is 10.0. This lower ratio suggests that the company may be undervalued in terms of its earnings before interest, taxes, depreciation, and amortization.
Stock Price Trends
Over the past 12 months, the stock price has experienced a decline from a high of $50 to a low of $30. Currently, it trades at around $35, reflecting a 30% decrease year-over-year.
Dividend Yield and Payout Ratios
The current dividend yield is 2.5%, with a payout ratio of 25%. This indicates a sustainable dividend policy, as the payout is well within earnings.
Analyst Consensus on Stock Valuation
According to the latest reports, the consensus among analysts is a hold rating, with some suggesting a potential for future growth if operational challenges are addressed.
Financial Summary Table
| Metric | Value |
|---|---|
| P/E Ratio | 12.5 |
| Industry Average P/E | 15.0 |
| P/B Ratio | 1.2 |
| Industry Average P/B | 2.0 |
| EV/EBITDA Ratio | 8.0 |
| Industry Average EV/EBITDA | 10.0 |
| 12-Month Stock Price Range | $30 - $50 |
| Current Stock Price | $35 |
| Dividend Yield | 2.5% |
| Payout Ratio | 25% |
| Analyst Consensus | Hold |
Key Risks Facing ATN International, Inc. (ATNI)
Key Risks Facing ATN International, Inc.
ATN International, Inc. faces several internal and external risks that impact its financial health, which are critical for investors to consider.
Industry Competition
The telecommunications sector is highly competitive, with numerous players vying for market share. In 2024, the company reported a 13% decline in revenues from its US Telecom segment, primarily due to increased competition and the end of government subsidy programs.
Regulatory Changes
Changes in regulations can significantly affect the company's operations and profitability. The anticipated conclusion of programs like the Emergency Connectivity Fund (ECF) and Affordable Care Program (ACP) has already led to revenue declines.
Market Conditions
Fluctuations in market conditions directly influence demand for telecommunications services. The company has adjusted its revenue guidance for the full year 2024 to a range of $720 million to $730 million, down from a previous expectation of $730 million to $750 million.
Operational Risks
Operational risks include challenges in managing costs and maintaining service quality amidst competitive pressures. The company reported an operating loss of $38.4 million in Q3 2024 compared to an operating income of $6.8 million in the same quarter of the previous year.
Financial Risks
Financial risks primarily revolve around the company's debt levels. As of September 30, 2024, total debt stood at $568.9 million, with a net debt ratio expected to be between 2.3x to 2.6x exiting 2024. This elevated debt level can restrict financial flexibility and increase vulnerability to interest rate fluctuations.
Strategic Risks
Strategic risks are linked to the company's ability to execute its business plans effectively. The company has indicated a need to refocus on growing business and carrier customer revenues in the US, which may involve restructuring efforts.
Mitigation Strategies
The company has initiated several strategies to mitigate risks, including:
- Aligning cost structures with revenue levels.
- Focusing on margin improvement and cash flow generation.
- Strengthening sales execution teams to improve performance in the US Telecom segment.
Key Financial Data
| Metric | Value |
|---|---|
| Total Revenue (2024 Guidance) | $720 million to $730 million |
| Adjusted EBITDA (2024 Guidance) | $182 million to $188 million |
| Operating Loss (Q3 2024) | $38.4 million |
| Total Debt (September 30, 2024) | $568.9 million |
| Net Debt Ratio (2024 Guidance) | 2.3x to 2.6x |
Future Growth Prospects for ATN International, Inc. (ATNI)
Future Growth Prospects for ATN International, Inc.
Analysis of Key Growth Drivers
The company is focusing on several growth drivers to enhance its future prospects:
- Product Innovations: Continuous improvements in high-speed data services and expanding fiber network capabilities will attract new customers. As of Q3 2024, the total high-speed broadband subscribers increased by 6% year-over-year, reaching 206,400 subscribers.
- Market Expansion: The company is actively expanding its service areas, with broadband homes passed by high-speed data services increasing by 20% year-over-year to 399,500 homes.
- Acquisitions: Strategic acquisitions are being evaluated to enhance service offerings and market presence.
Future Revenue Growth Projections and Earnings Estimates
For the full year 2024, the company has updated its revenue guidance, projecting revenue (excluding construction revenue) to be in the range of $720 million to $730 million. Adjusted EBITDA is expected to fall between $182 million to $188 million.
Strategic Initiatives or Partnerships Driving Future Growth
The company is implementing several strategic initiatives:
- Strengthening sales execution teams to enhance customer acquisition and retention.
- Focusing on growing business and carrier customer revenues in the U.S.
- Maximizing value from deployed assets to improve operational efficiency.
Competitive Advantages Positioning the Company for Growth
Key competitive advantages include:
- Robust infrastructure with a growing fiber network, enhancing service reliability and speed.
- A diversified revenue stream across international and U.S. telecom segments, mitigating risks associated with market fluctuations.
- Strong cash flow management with net cash from operations increasing by 9% year-over-year to $97.4 million for the nine months ended September 30, 2024.
| Metric | 2024 Projection | 2023 Actual | Year-over-Year Change |
|---|---|---|---|
| Revenue (Excluding Construction) | $720M - $730M | $730M - $750M | Decrease |
| Adjusted EBITDA | $182M - $188M | $190M - $200M | Decrease |
| Capital Expenditures | $100M - $110M | N/A | N/A |
| Net Debt Ratio | 2.3x - 2.6x | 2.25x - 2.50x | Increase |
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Article updated on 8 Nov 2024
Resources:
- ATN International, Inc. (ATNI) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of ATN International, Inc. (ATNI)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View ATN International, Inc. (ATNI)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.