Optiv Inc.

Overview Key strengths Key risks Good long-term growth prospects for cybersecurity solutions. High leverage around 7x. Diverse customer base. Track record of revenue declines and budget misses. Partnerships with leading security vendors. Majority of debt capital structure matures within 18 months. Optiv has logged its seven consecutive quarters of double-digit revenue growth while expanding EBITDA margins. The improvement is primarily due to better operational execution and a stronger salesforce, allowing the company to capitalize on robust industry demand for cyber security solutions. The pace of security breaches has been accelerating for several years, and attacks are becoming increasingly sophisticated. Meanwhile, the security landscape is complex and rapidly evolving, forcing many companies to rely on outside providers such as Optiv. The

...Better operating performance is driving significant leverage reduction. Optiv has logged its seven consecutive quarters of double- digit revenue growth while expanding EBITDA margins. The improvement is primarily due to better operational execution and a stronger salesforce, allowing the company to capitalize on robust industry demand for cyber security solutions. The pace of security breaches has been accelerating for several years, and attacks are becoming increasingly sophisticated. Meanwhile, the security landscape is complex and rapidly evolving, forcing many companies to rely on outside providers such as Optiv. The recent outperformance has helped the company reduce its leverage to 7.1x as of the quarter ended June 30, 2022 (down from 7.6x at the end of 2021, 8.4x as of the June quarter in 2021, and over 10x two years ago). We forecast leverage will continue to improve to the mid-6x...

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