American Software, Inc. reports 35.8% EBITDA growth in 2018 and 6.0% Revenue growth
06/21/2018 • About American Software, Inc. (
$AMSWA) • By InTwits
American Software, Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- American Software, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has highly profitable business model: ROIC is 12.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
American Software, Inc.'s Revenue increased on 6.0%. Revenue growth showed acceleration in FY18Q4 - it increased 11.8% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 7.0 pp from 11.8% to 4.8% in FY2018.
Gross Margin increased on 3.7 pp from 51.9% to 55.6% in FY2018. SG&A as a % of Revenue showed almost no change in FY2018. During the last 5 years SG&A as a % of Revenue bottomed in FY2016 at 30.4% and was growing since that time.
Net Income margin decreased on 3.1 pp from 13.8% to 10.7% in FY2018.
Investments (CAPEX, working capital and M&A)
In FY2018 American Software, Inc. had CAPEX/Revenue of 1.3%. CAPEX/Revenue showed almost no change from FY2015 to FY2018. For the last three years the average CAPEX/Revenue was 0.84%.
Return on investment
The company operates at good ROIC (12.5%) while ROE is low (11.1%). ROIC increased on 4.7 pp from 7.8% to 12.5% in FY2018. ROE decreased on 3.6 pp from 14.7% to 11.1% in FY2018.
Leverage (Debt)
The company has no debt. Cash dropped on 20.0%.
Valuation and dividends
The company's trades at EV/EBITDA 18.5x and P/E 34.5x.
Management team
Vincent C Klinges is a American Software, Inc.'s CFO. Vincent C Klinges has spent 19 years at the company.
Financial and operational results
FY ended 04/30/2018
American Software, Inc. ($AMSWA) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 100.6 | 102.9 | 113.9 | 106.3 | 112.7 | 6.0% |
| Gross Profit | 56.9 | 52.4 | 59.7 | 55.2 | 62.7 | 13.6% |
| SG&A | 32.8 | 31.6 | 34.6 | 34.5 | 36.7 | 6.4% |
| EBITDA | 17.1 | 15.2 | 19.1 | 14.4 | 19.6 | 35.8% |
| Net Income | 10.3 | 8.1 | 10.2 | 14.6 | 12.1 | -17.6% |
Balance Sheet
|
|---|
| Cash | 55.8 | 44.7 | 49.0 | 66.0 | 52.8 | -20.0% |
| 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 | 0.3 | 1.0 | 0.7 | 0.7 | 1.4 | 95.3% |
Ratios
|
|---|
| Revenue growth | 0.1% | 2.3% | 10.7% | -6.7% | 6.0% | |
| EBITDA growth | -4.5% | -11.4% | 26.2% | -24.8% | 35.8% | |
|
|---|
| Gross Margin | 56.5% | 51.0% | 52.4% | 51.9% | 55.6% | 3.7% |
| EBITDA Margin | 17.0% | 14.8% | 16.8% | 13.6% | 17.4% | 3.8% |
| SG&A, % of revenue | 32.6% | 30.7% | 30.4% | 32.5% | 32.6% | 0.1% |
| Net Income Margin | 10.3% | 7.9% | 9.0% | 13.8% | 10.7% | -3.1% |
| CAPEX, % of revenue | 0.3% | 1.0% | 0.6% | 0.7% | 1.3% | 0.6% |
|
|---|
| ROIC | 16.4% | 10.0% | 14.3% | 7.8% | 12.5% | 4.7% |
| ROE | 11.8% | 8.8% | 10.9% | 14.7% | 11.1% | -3.6% |
| Net Debt/EBITDA | -3.3x | -2.9x | -2.6x | -4.6x | -2.7x | 1.9x |
American Software, Inc. ($AMSWA) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 27 | 26 | 30 | 29 | | -2.0% | 0.7% | 13.9% | 11.8% |
| EBITDA | 5 | 5 | 6 | 4 | | 64.0% | 94.6% | 30.2% | -8.0% |
| Net Income | 3 | 2 | 6 | 1 | | 61.4% | 501.9% | 148.8% | -87.7% |
Balance Sheet
|
|---|
| Cash | 66 | 61 | 55 | 53 | | 27.8% | 27.1% | -1.5% | -20.0% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 56.6% | 53.2% | 56.6% | 55.9% | | 6.3% | 3.4% | 3.5% | 1.3% |
| EBITDA Margin | 18.6% | 17.3% | 19.3% | 14.3% | | 7.5% | 8.4% | 2.4% | -3.1% |
| Net Income Margin | 10.1% | 9.4% | 18.5% | 4.3% | | 4.0% | 7.8% | 10.0% | -34.8% |
Peers in Application Software
Below we provide American Software, Inc. benchmarking against other companies in Application Software 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 | 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| American Software, Inc. ($AMSWA) | | 2.3% | 10.7% | -6.7% | 6.0% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.0% |
|---|
| American Software, Inc. ($AMSWA) | 56.5% | 51.0% | 52.4% | 51.9% | 55.6% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| American Software, Inc. ($AMSWA) | 17.0% | 14.8% | 16.8% | 13.6% | 17.4% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| American Software, Inc. ($AMSWA) | 0.3% | 1.0% | 0.6% | 0.7% | 1.3% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.4% | -13.1% | -9.8% | -11.8% | -9.8% |
|---|
| American Software, Inc. ($AMSWA) | 16.4% | 10.0% | 14.3% | 7.8% | 12.5% |
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. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.2x | -0.9x | -0.9x | -0.8x | -0.6x |
|---|
| American Software, Inc. ($AMSWA) | -3.3x | -2.9x | -2.6x | -4.6x | -2.7x |
