Microsoft Corp CAPEX jumped on 43.1% and Revenue jumped on 14.3%19/07/2018
• About Microsoft Corp ($4338
) • By InTwits
Microsoft Corp reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 41.1% in FY2018 vs. 39.1% in FY2017 vs. 38.0% in FY2014
- Microsoft Corp has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.2%. At the same time it's a lot of higher than industry average of 5.7%.
- CAPEX is quite volatile: 4,984 in FY2018, 9,925 in FY2017, 12,613 in FY2016, 16,008 in FY2015, 9,292 in FY2014
- The company has highly profitable business model: ROIC is at 19.8%
- It operates with high leverage: Net Debt/EBITDA is 1.6x while industry average is -2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Microsoft Corp ($4338) key annual financial indicators
|Short Term Debt||2,000||7,484||12,904||11,544||5,397||-53.2%|
|Long Term Debt||20,645||27,808||40,557||81,445||77,810||-4.5%|
|Net Income Margin||25.4%||13.0%||22.5%||26.4%||15.0%||-11.4%|
|SG&A, % of revenue||23.6%||21.7%||21.1%||20.7%||20.1%||-0.5%|
|CAPEX, % of revenue||6.3%||6.4%||9.2%||8.4%||10.5%||2.1%|
Revenue and profitability
The company's Revenue surged on 14.3%. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased slightly on 1.3 pp from 18.0% to 19.3% in FY2018.
Gross Margin increased slightly on 0.72 pp from 64.5% to 65.2% in FY2018. SG&A as a % of Revenue decreased slightly on 0.51 pp from 20.7% to 20.1% in FY2018.
Net Income marign dropped on 11.4 pp from 26.4% to 15.0% in FY2018.
Capital expenditures (CAPEX) and working capital investments
Microsoft Corp's CAPEX/Revenue was 10.5% in FY2018. CAPEX/Revenue increased on 4.2 pp from 6.4% in FY2015 to 10.5% in FY2018. For the last three years the average CAPEX/Revenue was 9.4%.
Return on investment
The company operates at good ROIC (19.76%) and ROE (19.45%). ROIC increased on 2.2 pp from 17.5% to 19.8% in FY2018. ROE dropped on 10.4 pp from 29.8% to 19.4% in FY2018.
Debt level is 1.6x Net Debt / EBITDA and 1.8x Debt / EBITDA. Net Debt / EBITDA dropped on 0.7x from 2.3x to 1.6x in FY2018. Debt dropped on 10.5% while cash surged on 55.9%.
Appendix 1: Peers in Software
Below we provide Microsoft Corp benchmarking against other companies in Software industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.