Sandvine Corp reports 79.6% Net Income growth and 6.9 pp EBITDA Margin growth from 28.2% to 35.1%
07.01.2016 • About Sandvine Corp (
$SVC) • By InTwits
Sandvine Corp reported FY2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 35.1% in FY2015 vs. 28.2% in FY2014 vs. 5.1% in FY2011
- EBITDA Margin is quite volatile: 35.1% in FY2015, 28.2% in FY2014, 24.0% in FY2013, 0.9% in FY2012, 5.1% in FY2011
- Sandvine Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's a lot of higher than industry average of 2.0%.
- CAPEX is quite volatile: 4.4 in 2015, 11.4 in 2014, 3.4 in 2013, 3.1 in 2012, 3.0 in 2011
- The company has highly profitable business model: ROIC is at 21.7%
- It operates with high leverage: Net Debt/EBITDA is -0.2x while industry average is -1.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Sandvine Corp ($SVC) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 90.4 | 87.9 | 106.5 | 123.4 | 123.3 | -0.1% |
| Gross Profit | 67.2 | 59.3 | 78.9 | 94.7 | 95.9 | 1.2% |
| SG&A | | | 41.4 | 45.9 | 50.1 | 9.2% |
| EBITDA | 4.6 | 0.8 | 25.5 | 34.8 | 43.3 | 24.4% |
| Net Income | -1.4 | -5.0 | 12.9 | 23.0 | 41.3 | 79.6% |
Balance Sheet
|
|---|
| Cash | 3.0 | 4.0 | 5.5 | 14.0 | 8.8 | -36.9% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 6.6 | 4.3 | 3.4 | 3.9 | 5.9 | 48.5% |
Ratios
|
|---|
| Revenue growth | -0.3% | -2.7% | 21.2% | 15.8% | -0.1% | |
| EBITDA growth | -61.3% | -82.2% | 3,009.1% | 36.2% | 24.4% | |
| Gross Margin | 74.3% | 67.5% | 74.1% | 76.8% | 77.8% | 1.0% |
| EBITDA Margin | 5.1% | 0.9% | 24.0% | 28.2% | 35.1% | 6.9% |
| Net Income Margin | -1.6% | -5.7% | 12.1% | 18.6% | 33.5% | 14.8% |
| SG&A, % of revenue | | | 38.9% | 37.2% | 40.6% | 3.4% |
| CAPEX, % of revenue | 7.3% | 4.9% | 3.2% | 3.2% | 4.8% | 1.6% |
| ROIC | -1.7% | -4.9% | 16.9% | 20.2% | 21.7% | 1.6% |
| ROE | -1.2% | -4.4% | 10.8% | 15.8% | 22.5% | 6.7% |
| Net Debt/EBITDA | -0.6x | -4.8x | -0.2x | -0.4x | -0.2x | 0.2x |
Revenue and profitability
The company's Revenue showed almost no change in FY2015. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.9 pp from 28.2% to 35.1% in FY2015.
Gross Margin increased slightly on 0.98 pp from 76.8% to 77.8% in FY2015. SG&A as a % of Revenue increased on 3.4 pp from 37.2% to 40.6% in FY2015.
Net Income marign surged on 14.8 pp from 18.6% to 33.5% in FY2015.
Capital expenditures (CAPEX) and working capital investments
In FY2015 Sandvine Corp had CAPEX/Revenue of 4.8%. Sandvine Corp's CAPEX/Revenue showed almost no change from FY2012 to FY2015. It's average level of CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at high and attractive ROIC (21.73%) and ROE (22.54%). ROIC increased slightly on 1.6 pp from 20.2% to 21.7% in FY2015. ROE increased on 6.7 pp from 15.8% to 22.5% in FY2015.
Leverage (Debt)
The company has no debt. Cash dropped on 36.9% in FY2015.
Appendix 1: Peers in Technology
Below you can find Sandvine Corp benchmarking vs. other companies in Technology industry. It's shown for the period of 5 years for the key financial metrics. Each table has median value for all the companies in the industry together with individual financial data of the top-5 companies in the industry by particular financial metric.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Mitel Networks Corp ($MNW) | -9.0% | 3.8% | -5.7% | 91.4% | |
| Redknee Solutions Inc ($RKN) | | -4.5% | 151.6% | 81.4% | -13.6% |
| Intrinsyc Technologies Corp ($ITC) | -19.0% | -26.8% | -21.7% | 70.8% | |
| Espial Group Inc ($ESP) | 10.2% | -9.5% | -5.5% | 59.4% | |
| iLOOKABOUT Corp ($ILA) | -7.6% | 19.6% | 8.9% | 58.8% | |
| |
|---|
| Median (33 companies) | 5.9% | 6.6% | 11.4% | 13.7% | 10.1% |
|---|
| Sandvine Corp ($SVC) | | -2.7% | 21.2% | 15.8% | -0.1% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ProntoForms Corp ($PFM) | 90.1% | 96.1% | 98.1% | 98.0% | |
| Constellation Software Inc/Canada ($CSU) | 85.5% | 86.2% | 85.5% | 86.1% | |
| Symbility Solutions Inc ($SY) | 82.1% | 80.6% | 79.9% | 81.0% | |
| Espial Group Inc ($ESP) | 77.9% | 77.5% | 81.7% | 78.5% | |
| Absolute Software Corp ($ABT) | 71.6% | 73.6% | 76.3% | 78.4% | 81.1% |
| |
|---|
| Median (31 companies) | 49.7% | 52.4% | 48.8% | 51.1% | 48.1% |
|---|
| Sandvine Corp ($SVC) | 74.3% | 67.5% | 74.1% | 76.8% | 77.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Wi-LAN Inc ($WIN) | 26.5% | 40.9% | 12.2% | 56.2% | |
| Computer Modelling Group Ltd ($CMG) | 51.5% | 53.8% | 52.2% | 51.5% | 50.8% |
| Open Text Corp ($OTC) | 27.1% | 26.5% | 29.1% | 30.0% | 31.8% |
| Enghouse Systems Ltd ($ESL) | 24.8% | 25.4% | 23.6% | 24.7% | 21.9% |
| Descartes Systems Group Inc/The ($DSG) | 21.8% | 26.0% | 27.0% | 23.8% | 27.9% |
| |
|---|
| Median (33 companies) | 8.9% | 8.6% | 5.5% | 7.0% | 17.6% |
|---|
| Sandvine Corp ($SVC) | 5.1% | 0.9% | 24.0% | 28.2% | 35.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Halogen Software Inc ($HGN) | | 4.9% | 9.0% | 8.4% | |
| Intermap Technologies Corp ($IMP) | 0.4% | 1.0% | 3.2% | 7.4% | |
| Kinaxis Inc ($KXS) | 2.2% | 2.9% | 2.3% | 5.0% | |
| BlackBerry Ltd ($BB) | 5.2% | 4.9% | 3.8% | 4.2% | 2.6% |
| ProntoForms Corp ($PFM) | 1.3% | 1.1% | 0.8% | 3.6% | |
| |
|---|
| Median (33 companies) | 1.3% | 1.5% | 1.4% | 1.2% | 1.6% |
|---|
| Sandvine Corp ($SVC) | 7.3% | 4.9% | 3.2% | 3.2% | 4.8% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Kinaxis Inc ($KXS) | | | 61.8% | 63.6% | |
| Computer Modelling Group Ltd ($CMG) | 75.5% | 74.2% | 68.6% | 62.9% | 63.5% |
| SMART Technologies Inc ($SMA) | 43.2% | 21.4% | -18.9% | 28.1% | 43.8% |
| Constellation Software Inc/Canada ($CSU) | 45.8% | 45.9% | 22.4% | 24.7% | |
| CGI Group Inc ($GIB.A) | 14.7% | 5.7% | 10.9% | 17.1% | 18.0% |
| |
|---|
| Median (33 companies) | 5.5% | 4.4% | -4.8% | 0.5% | 8.3% |
|---|
| Sandvine Corp ($SVC) | -1.7% | -4.9% | 16.9% | 20.2% | 21.7% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Data Group Ltd ($DGI) | 3.2x | 3.5x | 3.7x | 4.0x | |
| Critical Control Energy Services Corp ($CCZ) | 1.9x | | 1.4x | 2.7x | |
| Mitel Networks Corp ($MNW) | 4.9x | 3.7x | 3.8x | 2.6x | |
| Open Text Corp ($OTC) | 0.0x | 0.1x | 0.2x | 1.8x | 1.5x |
| CGI Group Inc ($GIB.A) | 1.3x | 6.0x | 2.4x | 1.3x | 1.0x |
| |
|---|
| Median (21 companies) | -0.3x | -0.2x | -0.6x | -1.3x | 0.1x |
|---|
| Sandvine Corp ($SVC) | -0.6x | -4.8x | -0.2x | -0.4x | -0.2x |
