CounterPath Corp revenue decreased on 7.7% in 2016 while EBITDA Margin jumped on 18.9 pp from -42.8% to -23.8%
14.07.2016 • About CounterPath Corp (
$CCV) • By InTwits
CounterPath Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CounterPath Corp doesn't have a profitable business model yet: FY2016 ROIC is -28.6%
- The company operates at negative EBITDA Margin: -23.8%
- CounterPath Corp motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2012-FY2016 was 0.0%. On average EBITDA Margin was -22.6% for the sames years0
- CounterPath Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.4%. At the same time it's a lot of higher than industry average of 24.1%.
- CAPEX is quite volatile: 0.028 in FY2016, 0.21 in FY2015, 0.24 in FY2014, 0.25 in FY2013, 0.15 in FY2012
- The company has unprofitable business model: ROIC is at -28.6%
- It operates with high leverage: Net Debt/EBITDA is 3.5x while industry average is 0.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
CounterPath Corp ($CCV) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 14.083 | 15.240 | 11.682 | 12.003 | 11.081 | -7.7% |
| Gross Profit | 11.265 | 12.963 | 9.451 | 9.781 | 9.414 | -3.7% |
| SG&A | | 8.916 | 9.146 | 9.458 | 7.519 | -20.5% |
| EBITDA | -0.524 | -1.230 | -4.967 | -5.137 | -2.642 | |
| Net Income | -2.123 | 0.472 | -5.915 | -4.442 | -2.692 | |
Balance Sheet
|
|---|
| Cash | 8.154 | 11.230 | 7.173 | 2.852 | 2.160 | -24.3% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.151 | 0.255 | 0.238 | 0.215 | 0.028 | -87.1% |
Ratios
|
|---|
| Revenue growth | 27.6% | 8.2% | -23.3% | 2.7% | -7.7% | |
| EBITDA growth | -81.3% | 134.8% | 303.8% | 3.4% | -48.6% | |
| Gross Margin | 80.0% | 85.1% | 80.9% | 81.5% | 85.0% | 3.5% |
| EBITDA Margin | -3.7% | -8.1% | -42.5% | -42.8% | -23.8% | 18.9% |
| Net Income Margin | -15.1% | 3.1% | -50.6% | -37.0% | -24.3% | 12.7% |
| SG&A, % of revenue | | 58.5% | 78.3% | 78.8% | 67.9% | -10.9% |
| CAPEX, % of revenue | 1.1% | 1.7% | 2.0% | 1.8% | 0.2% | -1.5% |
| ROIC | -10.3% | -7.8% | -28.4% | -41.9% | -28.6% | 13.3% |
| ROE | -16.4% | -2.5% | -32.9% | -35.5% | -28.3% | 7.2% |
CounterPath Corp ($CCV) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 2 | 3 | 3 | 3 | -22.1% | 6.3% | -12.1% | -2.0% |
| EBITDA | -1 | -0 | -1 | -0 | | | | |
| Net Income | -1 | -0 | -0 | -1 | | | | |
Balance Sheet
|
|---|
| Cash | 2 | 3 | 3 | 2 | -67.7% | -38.5% | -29.6% | -24.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 79.6% | 83.6% | 82.5% | 92.6% | -0.0% | 4.2% | 0.5% | 7.8% |
| EBITDA Margin | -62.1% | -11.3% | -20.8% | -9.4% | -17.1% | 44.0% | 19.6% | 22.1% |
| Net Income Margin | -47.1% | -11.0% | -9.3% | -32.9% | -12.0% | 39.5% | 8.0% | 12.7% |
Revenue and profitability
The company's Revenue decreased on 7.7%. Annual revenue decline showed slowdown in FY16Q4 - revenue decreased on 2.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 18.9 pp from -42.8% to -23.8% in FY2016.
Gross Margin increased on 3.5 pp from 81.5% to 85.0% in FY2016. SG&A as a % of Revenue dropped on 10.9 pp from 78.8% to 67.9% in FY2016.
Net Income marign jumped on 12.7 pp from -37.0% to -24.3% in FY2016.
Capital expenditures (CAPEX) and working capital investments
The company's CAPEX/Revenue was 0.25% in FY2016. CounterPath Corp's CAPEX/Revenue decreased slightly on 1.4 pp from 1.7% in FY2013 to 0.25% in FY2016. It's average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at negative ROIC (-28.61%) and ROE (-28.30%). ROIC surged on 13.3 pp from -41.9% to -28.6% in FY2016. ROE increased on 7.2 pp from -35.5% to -28.3% in FY2016.
Leverage (Debt)
The company has no debt. Cash dropped on 24.3%.
Appendix 1: Peers in Communications
Below you can find CounterPath Corp benchmarking vs. other companies in Communications 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 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| AcuityAds Holding Inc ($AT) | | | | 51.6% | 91.4% |
| Shopify Inc ($SH) | | 111.9% | 109.0% | 95.4% | 89.7% |
| Gaming Nation Inc ($FAN) | | | | | 46.6% |
| Tucows Inc ($TC) | | 13.3% | 13.6% | 17.1% | 9.8% |
| Points International Ltd ($PTS) | | 45.1% | 26.0% | 16.2% | 8.6% |
| |
|---|
| Median (26 companies) | 13.1% | 3.5% | 2.1% | 4.2% | 2.3% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wanted Technologies Corp ($WAN) | 90.5% | 93.2% | 94.3% | 95.6% | |
| NeuLion Inc ($NLN) | 53.6% | 63.8% | 70.2% | 81.1% | 81.6% |
| TeraGo Inc ($TGO) | 62.9% | 61.8% | 59.8% | 77.2% | 77.2% |
| ICTV Brands Inc ($ITV) | 67.4% | 71.9% | 69.6% | 68.1% | |
| Platinum Communications Corp ($PCS) | 67.4% | 67.1% | 60.2% | 60.5% | |
| |
|---|
| Median (23 companies) | 44.2% | 42.8% | 45.3% | 46.4% | 41.1% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| BCE Inc ($BCE) | 38.8% | 37.7% | 38.4% | 37.7% | 39.8% |
| Rogers Communications Inc ($RCI.A) | 37.3% | 38.4% | 37.9% | 36.9% | 32.5% |
| Quebecor Inc ($QBR.B) | 27.5% | 36.3% | 35.5% | 34.2% | 35.5% |
| TELUS Corp ($T) | 35.3% | 35.2% | 35.1% | 34.1% | 33.0% |
| ZoomerMedia Ltd ($ZUM) | 32.6% | 33.8% | 29.3% | 29.1% | 27.1% |
| |
|---|
| Median (30 companies) | 17.0% | 10.7% | 9.9% | 9.9% | 7.7% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| TELUS Corp ($T) | 17.9% | 17.8% | 19.8% | 20.2% | 21.5% |
| Rogers Communications Inc ($RCI.A) | 17.2% | 17.6% | 18.4% | 18.2% | 17.2% |
| Quebecor Inc ($QBR.B) | 16.7% | 15.4% | 17.9% | 17.5% | 17.6% |
| BCE Inc ($BCE) | 17.6% | 17.5% | 17.7% | 16.9% | 17.4% |
| TeraGo Inc ($TGO) | 20.9% | 21.5% | 23.1% | 14.8% | 13.0% |
| |
|---|
| Median (29 companies) | 2.7% | 3.0% | 2.3% | 2.3% | 3.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Tucows Inc ($TC) | 17.7% | 22.5% | 35.4% | 51.4% | 58.4% |
| BCE Inc ($BCE) | 14.1% | 12.6% | 12.6% | 12.3% | 12.6% |
| Quebecor Inc ($QBR.B) | 7.9% | 9.6% | 8.4% | 8.4% | 10.1% |
| MDC Partners Inc ($MDZ.A) | -3.1% | -6.3% | 14.2% | 13.7% | 10.1% |
| TELUS Corp ($T) | 12.4% | 13.0% | 13.0% | 11.5% | 9.6% |
| |
|---|
| Median (29 companies) | 8.9% | 7.9% | 7.3% | 2.6% | 0.1% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intertain Group Ltd/The ($IT) | | | | 9.4x | |
| MDC Partners Inc ($MDZ.A) | 12.4x | 112.6x | 4.6x | 5.5x | 9.6x |
| Quebecor Inc ($QBR.B) | 3.7x | 3.9x | 4.2x | 4.8x | 4.3x |
| Rogers Communications Inc ($RCI.A) | 2.3x | 2.4x | 3.2x | 3.6x | 3.8x |
| Newfoundland Capital Corp Ltd ($NCC.B) | 1.4x | 1.3x | 3.3x | 3.2x | |
| |
|---|
| Median (21 companies) | 1.4x | 1.3x | 1.5x | 1.6x | 1.7x |
|---|
