Mimecast Limited EBITDA jumped on 696% and EBITDA Margin increased on 3.8 pp from 0.81% to 4.6%
05/14/2018 • About Mimecast Limited (
$MIME) • By InTwits
Mimecast Limited reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Mimecast Limited is a fast growth stock: FY2018 revenue growth was 40.4%, 5 year revenue CAGR was 31.4% at FY2018 ROIC -5.4%
- EBITDA Margin is quite volatile: 4.6% in FY2018, 0.8% in FY2017, 5.6% in FY2016, 6.5% in FY2015, -2.7% in FY2014
- Mimecast Limited spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 4.6%. Average EBITDA Margin for the same period was 3.4%
- Mimecast Limited has high CAPEX intensity: 5 year average CAPEX/Revenue was 12.8%. At the same time it's in pair with industry average of 13.2%
- CAPEX is quite volatile: $34m in FY2018, $18m in FY2017, $14m in FY2016, $13m in FY2015, $18m in FY2014
- The company has unprofitable business model: ROIC is -5.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 40.4%. Revenue growth showed small slowdown in FY18Q4 - it was 40.1% YoY. During the last 5 years Revenue growth bottomed in FY2016 at 22.2% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 18.2% to 22.1% in 2018.
Gross Margin showed almost no change in FY2018. Gross Margin followed a growing trend at 1.6 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased on 6.1 pp from 66.5% to 60.4% in FY2018. Stock Based Compensation (SBC) as a % of Revenue decreased slightly on 1.0 pp from 5.5% to 4.5% in FY2018. During the last 5 years SBC as a % of Revenue topped in FY2016 at 5.6% and was declining since that time.
Net Income margin decreased slightly on 1.8 pp from -2.9% to -4.7% in FY2018. During FY2014-FY2018 Net Income margin topped in FY2015 at 0.25% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In FY2018 Mimecast Limited had CAPEX/Revenue of 13.2%. The company's CAPEX/Revenue increased on 2.3 pp from 10.8% in FY2015 to 13.2% in FY2018. It's average level of CAPEX/Revenue for the last three years was 11.0%. To fuel its fast growth Mimecast Limited made large investments to CAPEX (287% of EBITDA). During FY2014-FY2018 CAPEX as a % of Revenue bottomed in FY2017 at 9.9%.
Accounts receivable as a % of Revenue increased slightly on 1.2 pp from 23.8% to 25.0% in FY2018. Accounts payable as a % of Revenue increased slightly on 1.6 pp from 7.1% to 8.7% in FY2018.
Return on investment
The company operates at negative ROIC (-5.4%) and ROE (-13.5%). ROIC increased on 6.8 pp from -12.3% to -5.4% in FY2018. ROE decreased on 6.7 pp from -6.8% to -13.5% in FY2018.
Leverage (Debt)
Debt level is -0.6x Net Debt / EBITDA and 5.9x Debt / EBITDA. Debt jumped on 3,110% while cash jumped on 52.7%.
Mimecast Limited has no short term refinancing risk: cash is higher than short term debt (6,963.5%).
Management team
At the end of financial year the company had 7.3% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 1,200 employees. The number of employees surged on 25.4%. Average revenue per employee in FY2018 was
$218,248 and it surged on 12.0%.
Financial and operational results
FY ended 03/31/2018
Mimecast Limited ($MIME) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 88.3 | 116.1 | 141.8 | 186.6 | 261.9 | 40.4% |
| Gross Profit | 59.6 | 79.3 | 100.0 | 136.2 | 192.2 | 41.1% |
| SG&A | 58.2 | 67.0 | 84.9 | 124.0 | 158.2 | 27.6% |
| EBITDA | -2.4 | 7.6 | 8.0 | 1.5 | 12.0 | 696.2% |
| EBIT | -11.4 | -3.4 | -2.6 | -10.4 | -7.0 | |
| Tax | 0.0 | 0.2 | 0.9 | 2.2 | 2.7 | 22.8% |
| Net Income | -16.9 | 0.3 | -3.2 | -5.4 | -12.4 | |
| Stock Based Compensation | 1.2 | 5.4 | 7.9 | 10.3 | 11.7 | 14.0% |
Balance Sheet
|
|---|
| Cash | 19.2 | 32.9 | 106.1 | 51.3 | 78.3 | 52.7% |
| Accounts Receivable | 22.9 | 25.3 | 33.7 | 44.4 | 65.4 | 47.4% |
| Accounts Payable | 6.9 | 4.7 | 2.9 | 3.6 | 6.1 | 70.1% |
| Short Term Debt | 3.1 | 5.3 | 4.9 | 2.0 | 1.1 | -42.5% |
| Long Term Debt | 6.0 | 7.1 | 2.0 | 0.2 | 69.6 | 28,306.1% |
Cash flow
|
|---|
| Capex | 17.9 | 12.6 | 14.2 | 18.5 | 34.5 | 86.6% |
Ratios
|
|---|
| Revenue growth | 32.3% | 31.4% | 22.2% | 31.5% | 40.4% | |
| EBITDA growth | | -416.3% | 4.7% | -81.0% | 696.2% | |
|
|---|
| Gross Margin | 67.5% | 68.3% | 70.5% | 73.0% | 73.4% | 0.4% |
| EBITDA Margin | -2.7% | 6.5% | 5.6% | 0.8% | 4.6% | 3.8% |
| EBIT Margin | -12.9% | -3.0% | -1.8% | -5.6% | -2.7% | 2.9% |
| SG&A, % of revenue | 65.9% | 57.7% | 59.9% | 66.5% | 60.4% | -6.1% |
| SBC, % of revenue | 1.4% | 4.7% | 5.6% | 5.5% | 4.5% | -1.0% |
| Net Income Margin | -19.1% | 0.2% | -2.3% | -2.9% | -4.7% | -1.8% |
| CAPEX, % of revenue | 20.3% | 10.8% | 10.0% | 9.9% | 13.2% | 3.3% |
|
|---|
| ROIC | | -23.3% | -5.0% | -12.3% | -5.4% | 6.8% |
| ROE | | | | -6.8% | -13.5% | -6.7% |
| Net Debt/EBITDA | | -2.7x | -12.5x | -32.6x | -0.6x | 31.9x |
People
|
|---|
| Insider ownership | 7.3% | 7.3% | 7.3% | 7.3% | 7.3% | 0.0% |
| Employees | | | | 957 | 1,200 | 25.4% |
| Revenue/Employee, th. $ | | | | 195 | 218 | 12.0% |
Mimecast Limited ($MIME) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 58 | 63 | 67 | 73 | | 40.3% | 42.2% | 39.2% | 40.1% |
| EBITDA | 2 | 4 | 4 | 2 | | | 696.2% | 29,816.7% | 80.0% |
| Net Income | -2 | -1 | -3 | -7 | | -878.7% | -541.9% | | |
Balance Sheet
|
|---|
| Cash | 59 | 77 | 76 | 78 | | -45.7% | -30.4% | 58.8% | 52.7% |
| Short Term Debt | 2 | 2 | 1 | 1 | | -43.8% | -40.5% | -44.3% | -42.5% |
| Long Term Debt | 3 | 3 | 3 | 70 | | 103.7% | 319.8% | 1,517.5% | 28,306.1% |
Ratios
|
|---|
| Gross Margin | 73.8% | 73.8% | 73.6% | 72.5% | | 1.1% | 1.7% | 0.8% | -1.8% |
| EBITDA Margin | 4.3% | 5.9% | 5.3% | 3.0% | | 4.7% | 4.9% | 5.3% | 0.7% |
| Net Income Margin | -3.3% | -2.1% | -3.9% | -8.9% | | -3.9% | -2.8% | 3.1% | -3.9% |
Peers in Application Software
Below you can find Mimecast Limited benchmarking vs. other companies in Application Software 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 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| nFusz Inc ($FUSZ) | | | | | 433.3% |
| CloudCommerce Inc ($CLWD) | | -38.1% | 247.6% | 40.9% | 301.1% |
| Seven Stars Cloud Group, Inc. ($SSC) | | 134.7% | 663.8% | 310.3% | 161.7% |
| Aurora Mobile Limited ($JG) | | | | 304.9% | 150.8% |
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 13.5% | 13.6% | 14.8% | 15.2% |
|---|
| Mimecast Limited ($MIME) | | 31.4% | 22.2% | 31.5% | 40.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 99.7% | 97.4% | 98.0% | 97.6% | 96.5% |
| hopTo Inc ($HPTO) | 91.8% | 87.8% | 95.9% | 98.2% | 95.4% |
| Aware, Inc. ($AWRE) | 75.4% | 87.2% | 90.3% | 94.6% | 92.3% |
| Alteryx, Inc. ($AYX) | 77.5% | 80.5% | 81.3% | 83.4% | 91.0% |
| Aspen Technology, Inc. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.3% |
|---|
| Mimecast Limited ($MIME) | 67.5% | 68.3% | 70.5% | 73.0% | 73.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($AZPN) | 34.5% | 42.2% | 46.0% | 45.2% | 43.3% |
| ANSYS, Inc. ($ANSS) | 45.9% | 45.8% | 45.1% | 41.9% | 41.4% |
| Paycom Software, Inc. ($PAYC) | 15.1% | 19.5% | 35.1% | 34.4% | 35.9% |
| j2 Global, Inc. ($JCOM) | 41.6% | 40.6% | 41.7% | 36.5% | 35.7% |
| Adobe Inc. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| Mimecast Limited ($MIME) | -2.7% | 6.5% | 5.6% | 0.8% | 4.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
| Integrated Ventures Inc ($INTV) | | | | | 199.9% |
| ShotSpotter, Inc. ($SSTI) | | 18.3% | 28.9% | 27.1% | 24.3% |
| Ellie Mae, Inc. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Mimecast Limited ($MIME) | 20.3% | 10.8% | 10.0% | 9.9% | 13.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($ITCC) | -558.9% | | | | 127.4% |
| Manhattan Associates, Inc. ($MANH) | 64.8% | 78.7% | 99.3% | 102.5% | 80.9% |
| Intuit Inc. ($INTU) | 34.2% | 23.7% | 52.1% | 72.6% | 66.8% |
| Aspen Technology, Inc. ($AZPN) | 133.4% | | | | 58.1% |
| Paycom Software, Inc. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.3% | -11.2% | -9.8% | -10.2% | -9.8% |
|---|
| Mimecast Limited ($MIME) | | -23.3% | -5.0% | -12.3% | -5.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($UPLD) | | | 16.4x | 115.6x | 16.7x |
| Nuance Communications, Inc. ($NUAN) | 7.9x | 5.7x | 5.3x | 7.1x | 15.2x |
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.4x | -0.9x | -0.9x | -0.8x | -0.7x |
|---|
| Mimecast Limited ($MIME) | | -2.7x | -12.5x | -32.6x | -0.6x |
