Q: Are you concerned about any of these factors?
Four clients contribute to 69% of the total revenue.
The U.S. market accounts for approximately 89% of revenues.
Deferred Income Tax Liabilities increased from $9.2 million to $15.9 million, marking a significant rise.
Four clients contribute to 69% of the total revenue.
The U.S. market accounts for approximately 89% of revenues.
Deferred Income Tax Liabilities increased from $9.2 million to $15.9 million, marking a significant rise.
5i Research Answer:
DRX is still a small name ($500M market cap) and as a result, we are not overly concerned by a high concentration of its clients base, as this is typical for small-cap names, and essentially it should be priced into their valuations. The US market making up a large majority of its revenues we feel is beneficial, particularly for Canadian investors, as it provides geographic diversification. The rise in deferred income tax liabilities can be due to its fast business expansion and expectation for profitability, which we do not feel are negative factors for the company.