Absolute Software Corp reports 111% Net Income growth while 5.2% Revenue decline
19.08.2016 • About Absolute Software Corp (
$ABT) • By InTwits
Absolute Software Corp reported FY2016 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Absolute Software Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.3%. At the same time it's a lot of higher than industry average of 1.7%.
- CAPEX is quite volatile: 3.4 in FY2016, 2.9 in FY2015, 1.6 in FY2014, 0.97 in FY2013, 1.3 in FY2012
- It operates with high leverage: Net Debt/EBITDA is -1.7x while industry average is -4.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Absolute Software Corp ($ABT) key annual financial indicators
| mln. $ | 2012 | 2013 | 2014 | 2015 | 2016 | 2016/2015 |
|---|
P&L
|
|---|
| Revenue | 74.335 | 82.838 | 85.087 | 93.650 | 88.799 | -5.2% |
| Gross Profit | 54.694 | 63.192 | 66.706 | 75.905 | 74.971 | -1.2% |
| SG&A | | 47.143 | 48.980 | 52.300 | 55.140 | 5.4% |
| EBITDA | 12.444 | 15.400 | 17.954 | 20.734 | 13.575 | -34.5% |
| Net Income | -1.412 | 1.731 | 3.341 | 4.615 | 9.729 | 110.8% |
Balance Sheet
|
|---|
| Cash | 44.583 | 29.557 | 38.373 | 44.106 | 23.093 | -47.6% |
| 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 | 1.275 | 0.969 | 1.616 | 2.909 | 3.370 | 15.8% |
Ratios
|
|---|
| Revenue growth | 9.4% | 11.4% | 2.7% | 10.1% | -5.2% | |
| EBITDA growth | 120.7% | 23.8% | 16.6% | 15.5% | -34.5% | |
| Gross Margin | 73.6% | 76.3% | 78.4% | 81.1% | 84.4% | 3.4% |
| EBITDA Margin | 16.7% | 18.6% | 21.1% | 22.1% | 15.3% | -6.9% |
| Net Income Margin | -1.9% | 2.1% | 3.9% | 4.9% | 11.0% | 6.0% |
| SG&A, % of revenue | | 56.9% | 57.6% | 55.8% | 62.1% | 6.2% |
| CAPEX, % of revenue | 1.7% | 1.2% | 1.9% | 3.1% | 3.8% | 0.7% |
| Net Debt/EBITDA | -3.6x | -1.9x | -2.1x | -2.1x | -1.7x | 0.4x |
Absolute Software Corp ($ABT) key quoterly financial indicators
| mln. $ | FY16Q1 | FY16Q2 | FY16Q3 | FY16Q4 | YoY change |
|---|
P&L
|
|---|
| Revenue | 24 | 21 | 22 | 22 | 3.4% | -8.3% | -10.1% | -5.5% |
| EBITDA | 4 | 3 | 3 | 3 | -18.4% | -43.7% | -55.1% | 2.6% |
| Net Income | 1 | 9 | 1 | -1 | 232.4% | 290.2% | -57.7% | |
Balance Sheet
|
|---|
| Cash | 42 | 18 | 24 | 23 | -16.6% | -56.9% | -47.1% | -47.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | |
Ratios
|
|---|
| Gross Margin | 85.6% | 84.8% | 84.5% | 82.8% | 5.7% | 4.1% | 2.1% | 1.5% |
| EBITDA Margin | 18.4% | 13.7% | 15.0% | 13.6% | -4.9% | -8.6% | -15.0% | 1.1% |
| Net Income Margin | 4.2% | 41.4% | 5.5% | -5.5% | 2.9% | 31.7% | -6.1% | -2.4% |
Revenue and profitability
The company's Revenue decreased on 5.2%. Revenue decline showed acceleration in FY16Q4 - it was 5.5% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.9 pp from 22.1% to 15.3% in FY2016.
Gross Margin increased on 3.4 pp from 81.1% to 84.4% in FY2016. SG&A as a % of Revenue increased on 6.2 pp from 55.8% to 62.1% in FY2016.
Net Income marign increased on 6.0 pp from 4.9% to 11.0% in FY2016.
Capital expenditures (CAPEX) and working capital investments
In FY2016 Absolute Software Corp had CAPEX/Revenue of 3.8%. The company's CAPEX/Revenue increased on 2.6 pp from 1.2% in FY2013 to 3.8% in FY2016. It's average level of CAPEX/Revenue for the last three years was 2.9%.
Leverage (Debt)
The company has no debt. Cash dropped on 47.6%.
Management team
The company's CEO is Geoffrey Haydon "Geoff". Geoffrey Haydon "Geoff" is a founder and has 4 years tenure at the company. Errol Olsen is a The company's CFO. Errol Olsen has spent 8 years at the company.
Appendix 1: Peers in Technology
Below we provide Absolute Software Corp benchmarking against other companies in Technology 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.
Top companies by Revenue growth, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Intrinsyc Technologies Corp ($ITC) | | -21.7% | 70.8% | 24.5% | 39.2% |
| ProntoForms Corp ($PFM) | | 75.4% | 43.9% | 46.4% | 28.2% |
| Kinaxis Inc ($KXS) | | 30.3% | 15.2% | 30.3% | 27.0% |
| NexJ Systems Inc ($NXJ) | | 4.3% | -12.6% | 19.7% | 17.3% |
| Constellation Software Inc/Canada ($CSU) | | 35.9% | 37.9% | 10.1% | 15.6% |
| |
|---|
| Median (12 companies) | | 0.3% | 13.3% | 11.5% | 12.7% |
|---|
Top companies by Gross margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 86.2% | 85.5% | 86.1% | 86.2% | 87.1% |
| ProntoForms Corp ($PFM) | 96.1% | 98.1% | 98.0% | 79.4% | |
| Espial Group Inc ($ESP) | 77.5% | 81.7% | 78.5% | 74.3% | 74.7% |
| Halogen Software Inc ($HGN) | 72.0% | 74.8% | 71.8% | 73.8% | 76.2% |
| Kinaxis Inc ($KXS) | 71.8% | 70.4% | 70.4% | 71.8% | 69.1% |
| |
|---|
| Median (12 companies) | 71.8% | 55.6% | 61.9% | 61.9% | 71.9% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Wi-LAN Inc ($WIN) | 40.9% | 12.2% | 56.2% | 53.2% | 57.8% |
| Kinaxis Inc ($KXS) | 18.7% | 23.0% | 19.2% | 28.0% | 17.6% |
| Constellation Software Inc/Canada ($CSU) | 20.9% | 20.1% | 21.8% | 25.2% | 26.0% |
| Intrinsyc Technologies Corp ($ITC) | -10.5% | -38.8% | 2.2% | 10.8% | |
| Mitel Networks Corp ($MNW) | 10.2% | 10.0% | 7.0% | 7.7% | |
| |
|---|
| Median (14 companies) | 0.9% | 3.9% | 4.4% | 0.1% | 7.1% |
|---|
Top companies by CAPEX/Revenue, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Kinaxis Inc ($KXS) | 2.9% | 2.3% | 5.0% | 4.7% | 5.0% |
| Halogen Software Inc ($HGN) | 4.9% | 9.0% | 8.4% | 2.9% | 2.6% |
| Espial Group Inc ($ESP) | 1.6% | 0.2% | 1.9% | 2.1% | 1.5% |
| ProntoForms Corp ($PFM) | 1.1% | 0.8% | 3.6% | 1.9% | |
| Critical Control Energy Services Corp ($CCZ) | | 0.5% | 1.0% | 1.6% | |
| |
|---|
| Median (14 companies) | 1.1% | 1.1% | 1.2% | 1.2% | 1.0% |
|---|
Top companies by ROIC, %
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Constellation Software Inc/Canada ($CSU) | 45.9% | 22.4% | 24.7% | 38.5% | 40.5% |
| Kinaxis Inc ($KXS) | | 61.8% | 63.6% | 44.0% | 22.6% |
| Halogen Software Inc ($HGN) | | -28.4% | -45.9% | -40.5% | 12.6% |
| Wi-LAN Inc ($WIN) | 2.6% | -7.6% | 8.9% | 7.4% | 8.4% |
| NexJ Systems Inc ($NXJ) | | -44.6% | -19.8% | -13.9% | 4.5% |
| |
|---|
| Median (14 companies) | -7.5% | -17.5% | 0.5% | -1.2% | 8.4% |
|---|
Top companies by Net Debt / EBITDA
| Top 5 | FY2012 | FY2013 | FY2014 | FY2015 | FY2016 |
|---|
| Mitel Networks Corp ($MNW) | 3.7x | 3.8x | 2.6x | 6.2x | |
| Pivot Technology Solutions Inc ($PTG) | | -0.4x | 1.1x | 4.8x | |
| Constellation Software Inc/Canada ($CSU) | 0.0x | 1.6x | 0.6x | 0.4x | -0.0x |
| Wi-LAN Inc ($WIN) | -4.9x | -12.1x | -2.3x | -1.7x | -2.0x |
| Kinaxis Inc ($KXS) | 1.9x | 4.7x | -4.2x | -3.9x | -6.3x |
| |
|---|
| Median (7 companies) | 0.9x | 1.5x | -0.8x | -1.7x | -6.3x |
|---|
