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Armada Data Corp revenue returned to growth in FY2020: increased 13.7% vs. 2.3% decline a year earliner

28.09.2020 • About Armada Data Corp ($ARD) • By InTwits

Armada Data Corp reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
  • EBITDA Margin is quite volatile: 6.3% in FY2020, -0.1% in FY2019, 14.2% in FY2018, 14.7% in FY2017, 19.2% in FY2016
  • Armada Data Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
  • The company has highly profitable business model: ROIC is 12.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.

Revenue and profitability


Armada Data Corp's Revenue surged on 13.7%. Revenue growth showed slowdown in FY20Q4 - it was -14.6% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 80.7 pp from -265% to -184% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2019 at -0.050%.

SG&A as a % of Revenue increased on 3.6 pp from 18.8% to 22.4% in FY2020. SG&A as a % of Revenue stuck to a growing trend at 3.5 pp per annum in the last 5 years.

Net Income margin increased on 2.8 pp from -1.3% to 1.5% in FY2020. Net Income margin stuck to a declining trend at -3.1 pp per annum in the last 5 years.

Investments (CAPEX, working capital and M&A)


In FY2020 Armada Data Corp had CAPEX/Revenue of 0.32%. CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 0.31%.

Return on investment


The company operates at good ROIC (12.5%) while ROE is low (4.7%). ROIC surged on 13.6 pp from -1.0% to 12.5% in FY2020. ROE increased on 8.4 pp from -3.7% to 4.7% in FY2020. ROIC declined at -16.1 pp per annum in the last 5 years. ROE followed a declining trend at -29.4 pp per annum in the last 5 years.

Leverage (Debt)


Debt level is -0.7x Net Debt / EBITDA and 1.0x Debt / EBITDA. Debt jumped while cash dropped on 11.9%.

Armada Data Corp has no short term refinancing risk: cash is higher than short term debt (325.2%).

Valuation and dividends


The company's trades at EV/EBITDA 5.9x and P/E 27.1x.

Financial and operational results


FY ended 31.05.2020

Armada Data Corp ($ARD) key annual financial indicators

mln. CAD201620172018201920202020/2019
P&L
Revenue2.2582.3912.9522.8853.28113.7%
SG&A0.1490.3770.5380.5410.73435.6%
EBITDA0.4340.3510.420-0.0010.205
Net Income0.2780.1990.274-0.0370.050
Balance Sheet
Cash0.2310.2960.3760.3980.351-11.9%
Short Term Debt0.2810.0000.0000.0000.108
Long Term Debt0.0000.0000.0000.0000.094
Cash flow
Capex0.0040.0070.0070.0110.010-8.8%
Ratios
Revenue growth3.8%5.9%23.4%-2.3%13.7%
EBITDA growth-796.7%-19.1%19.7%-100.3%-14,330.7%

EBITDA Margin19.2%14.7%14.2%-0.1%6.3%6.3%
SG&A, % of revenue6.6%15.8%18.2%18.8%22.4%3.6%
Net Income Margin12.3%8.3%9.3%-1.3%1.5%2.8%
CAPEX, % of revenue0.2%0.3%0.2%0.4%0.3%-0.1%

ROIC68.1%48.3%52.5%-1.0%12.5%13.6%
ROE130.9%37.9%32.4%-3.7%4.7%8.4%
Net Debt/EBITDA0.1x-0.8x-0.9x-0.7x

Armada Data Corp ($ARD) key quoterly financial indicators

mln. CADFY20Q1FY20Q2FY20Q3FY20Q4 YoY change
P&L
Revenue1111 3.6%38.3%28.4%-14.6%
Net Income000-0 6.7%-3,419.1%-
Balance Sheet
Cash0100 -2.7%57.0%61.1%-11.9%
Short Term Debt0000 ----
Long Term Debt0000 ----
Ratios
Net Income Margin 12.6% 8.4% 6.2% -30.6% 0.4%12.7%5.9%-16.5%

Peers in Communications


Below we provide Armada Data Corp benchmarking against other companies in Communications 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 FY2016 FY2017 FY2018 FY2019 FY2020
Vecima Networks Inc ($VCM)--34.1%9.3%8.9%13.4%
iSIGN Media Solutions Inc ($ISD)-70.9%-90.9%38.5%10.1%
Uniserve Communications Corp ($USS)-12.5%24.1%39.0%0.9%
EXFO Inc ($EXF)-4.6%10.8%6.4%-7.4%
Plaintree Systems Inc ($NPT)--18.4%11.1%52.0%-20.0%
 
Median (5 companies)2.4%12.5%9.3%38.5%0.9%
Armada Data Corp ($ARD)-5.9%23.4%-2.3%13.7%


Top companies by Gross margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
EXFO Inc ($EXF)62.6%61.2%61.0%58.6%56.9%
Vecima Networks Inc ($VCM)57.0%51.8%53.6%52.8%54.2%
Uniserve Communications Corp ($USS)50.2%48.9%44.4%36.9%34.2%
Plaintree Systems Inc ($NPT)11.5%11.6%27.6%28.4%22.2%
iSIGN Media Solutions Inc ($ISD)12.7%25.7%-84.0%19.9%20.1%
 
Median (5 companies)41.1%35.9%44.4%36.9%34.2%


Top companies by EBITDA margin, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Vecima Networks Inc ($VCM)30.3%21.6%15.6%5.9%17.0%
Plaintree Systems Inc ($NPT)-4.4%-3.8%15.7%16.3%7.3%
EXFO Inc ($EXF)8.9%6.5%4.2%6.6%5.0%
Uniserve Communications Corp ($USS)-8.7%2.9%-28.9%-14.9%-6.3%
iSIGN Media Solutions Inc ($ISD)-1,086.3%-2,802.8%-5,722.9%-4,580.9%-3,394.1%
 
Median (5 companies)6.8%2.9%4.2%5.9%5.0%
Armada Data Corp ($ARD)19.2%14.7%14.2%-0.1%6.3%


Top companies by CAPEX/Revenue, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
EXFO Inc ($EXF)1.9%2.9%3.9%2.6%2.9%
Uniserve Communications Corp ($USS)3.7%2.4%9.8%0.6%1.5%
Vecima Networks Inc ($VCM)4.8%2.2%2.3%22.3%1.2%
Plaintree Systems Inc ($NPT)2.2%1.9%2.0%3.2%0.1%
iSIGN Media Solutions Inc ($ISD)0.0%0.0%0.0%6.0%0.0%
 
Median (5 companies)2.8%2.2%2.3%3.2%1.2%
Armada Data Corp ($ARD)0.2%0.3%0.2%0.4%0.3%


Top companies by ROIC, %

Top 5 FY2016 FY2017 FY2018 FY2019 FY2020
Plaintree Systems Inc ($NPT)-44.7%-174.1%269.1%72.4%2.7%
Vecima Networks Inc ($VCM)19.3%5.1%1.8%-3.6%0.1%
EXFO Inc ($EXF)9.1%4.6%-2.2%2.4%-1.1%
Uniserve Communications Corp ($USS)---652.3%-243.8%-155.8%
iSIGN Media Solutions Inc ($ISD)-78.9%-1,170.0%---
 
Median (5 companies)0.1%4.6%1.8%-0.6%-0.5%
Armada Data Corp ($ARD)68.1%48.3%52.5%-1.0%12.5%


Top companies by Net Debt / EBITDA

Top  FY2016 FY2017 FY2018 FY2019 FY2020
EXFO Inc ($EXF)-2.1x-2.4x0.6x-0.3x1.1x
Plaintree Systems Inc ($NPT)--0.9x0.3x0.9x
Vecima Networks Inc ($VCM)-0.6x-0.1x-0.7x-3.6x-0.7x
 
Median (3 companies)1.6x0.7x0.7x-0.3x0.9x
Armada Data Corp ($ARD)0.1x-0.8x-0.9x--0.7x