Determine, Inc. revenue increased on 2.4% while EBITDA Margin decreased slightly on 1.1 pp from -15.9% to -17.0%
06/26/2018 • About Determine, Inc. (
$DTRM) • By InTwits
Determine, Inc. reported FY2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -17.0%
- Determine, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 was 0.0% while average EBITDA Margin was -37.1% for the sames years
- Determine, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has unprofitable business model: ROIC is -111.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.1x while industry average is -2.2x
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 increased on 2.4%. Revenue growth showed slowdown in FY18Q4 - it was -10.1% YoY. During FY2014-FY2018 Revenue growth topped in FY2015 at 32.2% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 4.8 pp from 8.2% to 3.3% in 2018.
Gross Margin increased slightly on 1.6 pp from 50.4% to 52.0% in FY2018. SG&A as a % of Revenue increased on 2.2 pp from 65.0% to 67.2% in FY2018.
Net Income margin decreased slightly on 0.96 pp from -34.4% to -35.4% in FY2018.
Investments (CAPEX, working capital and M&A)
Determine, Inc. 's CAPEX/Revenue was 0.17% in FY2018. Determine, Inc. 's CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 0.13%.
Return on investment
The company operates at negative ROIC (-111.2%) and ROE (-198.2%). ROE dropped on 79.2 pp from -119% to -198% in FY2018. During the last 5 years ROE topped in FY2017 at -119%.
Leverage (Debt)
Debt level is 0.1x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in FY2018. Debt showed almost no change in FY2018 while cash increased on 5.3%.
Determine, Inc. has short term refinancing risk: cash is only 81.9% of short term debt.
Financial and operational results
FY ended 03/31/2018
Determine, Inc. ($DTRM) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 15.789 | 20.877 | 26.760 | 27.463 | 28.119 | 2.4% |
| Gross Profit | 7.378 | 8.574 | 13.791 | 13.838 | 14.621 | 5.7% |
| SG&A | 13.297 | 21.485 | 21.321 | 17.847 | 18.902 | 5.9% |
| EBITDA | -8.666 | -15.094 | -11.193 | -4.375 | -4.775 | |
| Net Income | -8.179 | -13.746 | -14.021 | -9.452 | -9.948 | |
Balance Sheet
|
|---|
| Cash | 16.907 | 13.178 | 9.418 | 9.429 | 9.928 | 5.3% |
| Short Term Debt | 6.949 | 7.447 | 7.507 | 12.035 | 12.128 | 0.8% |
| Long Term Debt | 0.000 | 2.900 | 5.420 | 7.599 | 7.475 | -1.6% |
Cash flow
|
|---|
| Capex | 0.121 | 0.051 | 0.006 | 0.057 | 0.048 | -15.8% |
Ratios
|
|---|
| Revenue growth | -10.1% | 32.2% | 28.2% | 2.6% | 2.4% | |
| EBITDA growth | 135.2% | 74.2% | -25.8% | -60.9% | 9.1% | |
|
|---|
| Gross Margin | 46.7% | 41.1% | 51.5% | 50.4% | 52.0% | 1.6% |
| EBITDA Margin | -54.9% | -72.3% | -41.8% | -15.9% | -17.0% | -1.1% |
| SG&A, % of revenue | 84.2% | 102.9% | 79.7% | 65.0% | 67.2% | 2.2% |
| Net Income Margin | -51.8% | -65.8% | -52.4% | -34.4% | -35.4% | -1.0% |
| CAPEX, % of revenue | 0.8% | 0.2% | 0.0% | 0.2% | 0.2% | -0.0% |
|
|---|
| ROIC | -86.7% | -94.4% | -182.2% | | -111.2% | |
| ROE | -453.8% | -285.7% | -152.0% | -118.9% | -198.2% | -79.2% |
Determine, Inc. ($DTRM) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 7 | 7 | 7 | 7 | | 7.6% | 4.6% | 9.0% | -10.1% |
| EBITDA | -1 | -1 | -1 | -2 | | | | | |
| Net Income | -2 | -3 | -2 | -3 | | | | | |
Balance Sheet
|
|---|
| Cash | 14 | 12 | 10 | 10 | | 41.5% | 46.5% | 7.4% | 5.3% |
| Short Term Debt | 12 | 12 | 12 | 12 | | 7.0% | 8.0% | 6.8% | 0.8% |
| Long Term Debt | 7 | 7 | 7 | 7 | | 26.2% | 29.8% | -1.5% | -1.6% |
Ratios
|
|---|
| Gross Margin | 52.7% | 49.8% | 55.7% | 49.4% | | 0.6% | 2.2% | 7.0% | -3.4% |
| EBITDA Margin | -14.0% | -15.3% | -12.5% | -26.8% | | 6.8% | 10.7% | 1.0% | -21.6% |
| Net Income Margin | -30.2% | -38.8% | -31.4% | -41.6% | | 5.9% | 9.9% | 0.6% | -19.0% |
Peers in Application Software
Below you can find Determine, Inc. 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 13.5% | 13.6% | 15.7% | 15.2% |
|---|
| Determine, Inc. ($DTRM) | | 32.2% | 28.2% | 2.6% | 2.4% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.0% |
|---|
| Determine, Inc. ($DTRM) | 46.7% | 41.1% | 51.5% | 50.4% | 52.0% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.1% |
|---|
| Determine, Inc. ($DTRM) | -54.9% | -72.3% | -41.8% | -15.9% | -17.0% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| Determine, Inc. ($DTRM) | 0.8% | 0.2% | 0.0% | 0.2% | 0.2% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.2% | -11.2% | -9.2% | -11.0% | -9.1% |
|---|
| Determine, Inc. ($DTRM) | -86.7% | -94.4% | -182.2% | | -111.2% |
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 (70 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
