Cruise and exploration company Lindblad Expeditions (NASDAQ:LIND) missed analysts' expectations in Q4 FY2023, with revenue up 6.3% year on year to $125.4 million. The company's full-year revenue guidance of $620 million at the midpoint also came in slightly below analysts' estimates. It made a GAAP loss of $0.53 per share, improving from its loss of $0.61 per share in the same quarter last year.
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Lindblad Expeditions (LIND) Q4 FY2023 Highlights:
- Revenue: $125.4 million vs analyst estimates of $127.2 million (1.4% miss)
- EPS: -$0.53 vs analyst estimates of -$0.28 (-$0.25 miss)
- Management's revenue guidance for the upcoming financial year 2024 is $620 million at the midpoint, missing analyst estimates by 1% and implying 8.9% growth (vs 44.1% in FY2023)
- Free Cash Flow was -$17.11 million, down from $7.80 million in the previous quarter
- Gross Margin (GAAP): 38.5%, up from 36.3% in the same quarter last year
- Market Capitalization: $513.1 million
Founded by explorer Sven-Olof Lindblad in 1979, Lindblad Expeditions (NASDAQ:LIND) offers cruising experiences to remote destinations in partnership with National Geographic.
Hotels, Resorts and Cruise LinesHotels, resorts, and cruise line companies often sell experiences rather than tangible products, and in the last decade-plus, consumers have slowly shifted from buying "things" (wasteful) to buying "experiences" (memorable). In addition, the internet has introduced new ways of approaching leisure and lodging such as booking homes and longer-term accommodations. Traditional hotel, resorts, and cruise line companies must innovate to stay relevant in a market rife with innovation.
Sales GrowthA company’s long-term performance can give signals about its business quality. Even a bad business can shine for one or two quarters, but a top-tier one may grow for years. Lindblad Expeditions's annualized revenue growth rate of 13% over the last five years was decent for a consumer discretionary business. Within consumer discretionary, a long-term historical view may miss a company riding a successful new property or emerging trend. That's why we also follow short-term performance. Lindblad Expeditions's annualized revenue growth of 96.8% over the last two years is above its five-year trend, suggesting some bright spots.
This quarter, Lindblad Expeditions's revenue grew 6.3% year on year to $125.4 million, missing Wall Street's estimates. Looking ahead, Wall Street expects sales to grow 9.1% over the next 12 months, an acceleration from this quarter.
Cash Is KingAlthough earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can't use accounting profits to pay the bills.
Over the last two years, Lindblad Expeditions's demanding reinvestments to stay relevant with consumers have drained company resources. Its free cash flow margin has been among the worst in the consumer discretionary sector, averaging negative 4.5%.
Lindblad Expeditions burned through $17.11 million of cash in Q4, equivalent to a negative 13.7% margin, reducing its cash burn by 47.4% year on year. Over the next year, analysts predict Lindblad Expeditions will reach cash profitability. Their consensus estimates imply its LTM free cash flow margin of negative 0.8% will increase to positive 7.4%.
Key Takeaways from Lindblad Expeditions's Q4 Results We struggled to find many strong positives in these results. Its revenue, operating margin, and EPS fell short of Wall Street's estimates. On the bright side, the company announced it has extended its relationship with National Geographic for an additional 17 years. Overall, the results could have been better, but the market is likely happy Lindblad Expeditions extended its contract, de-risking the business. The stock is up 4.1% after reporting and currently trades at $9.99 per share.