CounterPath Corporation revenue returned to growth in FY2018: increased 15.9% vs. 3.6% decline a year earliner
07/25/2018 • About CounterPath Corporation (
$CPAH) • By InTwits
CounterPath Corporation reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -21.6%
- CounterPath Corporation spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2014-FY2018 is 0.0%. Average EBITDA Margin for the same period was -31.6%
- CounterPath Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.2%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $0m in FY2016, $0m in FY2015, $0m in FY2014
- The company has unprofitable business model: ROIC is -35.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 15.9%. Revenue growth showed acceleration in FY18Q4 - it increased 17.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 10.6 pp from -44.2% to -33.6% in 2018. EBITDA Margin grew at 5.8 pp per annum in FY2014-FY2018.
Gross Margin increased on 3.0 pp from 83.8% to 86.8% in FY2018. Gross Margin followed a growing trend at 1.4 pp per annum in FY2014-FY2018. SG&A as a % of Revenue decreased slightly on 1.2 pp from 66.1% to 64.9% in FY2018. SG&A as a % of Revenue declined at -3.9 pp per annum in FY2014-FY2018.
Net Income margin decreased on 3.0 pp from -23.0% to -26.0% in FY2018. During FY2014-FY2018 Net Income margin topped in FY2017 at -23.0%.
Investments (CAPEX, working capital and M&A)
In FY2018 the company had CAPEX/Revenue of 0.81%. The company showed small CAPEX/Revenue decline of 0.98 pp from 1.8% in FY2015 to 0.81% in FY2018. For the last three years the average CAPEX/Revenue was 0.67%.
Return on investment
The company operates at negative ROIC (-35.3%) and ROE (-41.8%). ROIC showed almost no change in FY2018. ROE dropped on 11.6 pp from -30.2% to -41.8% in FY2018.
Leverage (Debt)
The company has no debt. Cash surged on 13.4%.
Financial and operational results
FY ended 04/30/2018
CounterPath Corporation ($CPAH) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 11.682 | 12.003 | 11.081 | 10.686 | 12.382 | 15.9% |
| Gross Profit | 9.451 | 9.781 | 9.414 | 8.956 | 10.752 | 20.1% |
| SG&A | 9.146 | 9.458 | 7.519 | 7.065 | 8.039 | 13.8% |
| EBITDA | -4.967 | -5.137 | -2.642 | -2.840 | -2.680 | |
| Net Income | -5.915 | -4.442 | -2.692 | -2.459 | -3.221 | |
Balance Sheet
|
|---|
| Cash | 7.173 | 2.852 | 2.160 | 2.071 | 2.349 | 13.4% |
| 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 | 0.238 | 0.215 | 0.028 | 0.100 | 0.100 | 0.4% |
Ratios
|
|---|
| Revenue growth | -23.3% | 2.7% | -7.7% | -3.6% | 15.9% | |
| EBITDA growth | 303.8% | 3.4% | -48.6% | 7.5% | -5.6% | |
|
|---|
| Gross Margin | 80.9% | 81.5% | 85.0% | 83.8% | 86.8% | 3.0% |
| EBITDA Margin | -42.5% | -42.8% | -23.8% | -26.6% | -21.6% | 4.9% |
| SG&A, % of revenue | 78.3% | 78.8% | 67.9% | 66.1% | 64.9% | -1.2% |
| Net Income Margin | -50.6% | -37.0% | -24.3% | -23.0% | -26.0% | -3.0% |
| CAPEX, % of revenue | 2.0% | 1.8% | 0.2% | 0.9% | 0.8% | -0.1% |
|
|---|
| ROIC | -28.4% | -41.9% | -28.6% | -34.9% | -35.3% | -0.4% |
| ROE | -32.9% | -35.5% | -28.3% | -30.2% | -41.8% | -11.6% |
CounterPath Corporation ($CPAH) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 3 | 3 | | 2.9% | 24.0% | 20.7% | 17.9% |
| EBITDA | -1 | -0 | -0 | -2 | | | | | |
| Net Income | -1 | 0 | -1 | -1 | | | | | |
Balance Sheet
|
|---|
| Cash | 3 | 2 | 3 | 2 | | 16.9% | -12.4% | 20.9% | 13.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 87.5% | 88.8% | 88.3% | 82.0% | | 4.0% | 6.2% | 2.4% | -1.2% |
| EBITDA Margin | -16.2% | -0.6% | -13.2% | -63.1% | | 1.9% | 25.3% | 5.8% | -16.4% |
| Net Income Margin | -37.0% | 4.7% | -25.2% | -52.2% | | -25.0% | 25.2% | 1.5% | -16.2% |
Peers in Application Software
Below we provide CounterPath Corporation 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| CounterPath Corporation ($CPAH) | | 2.7% | -7.7% | -3.6% | 15.9% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.3% |
|---|
| CounterPath Corporation ($CPAH) | 80.9% | 81.5% | 85.0% | 83.8% | 86.8% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.1% |
|---|
| CounterPath Corporation ($CPAH) | -42.5% | -42.8% | -23.8% | -26.6% | -21.6% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| CounterPath Corporation ($CPAH) | 2.0% | 1.8% | 0.2% | 0.9% | 0.8% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.2% | -11.2% | -9.2% | -10.2% | -9.1% |
|---|
| CounterPath Corporation ($CPAH) | -28.4% | -41.9% | -28.6% | -34.9% | -35.3% |
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 |
|---|
