eGain Corporation revenue increased on 5.3% and EBITDA Margin increased on 3.6 pp from -0.90% to 2.7%
09/06/2018 • About eGain Corporation (
$EGAN) • By InTwits
eGain Corporation reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 2.7% in FY2018 vs. -0.9% in FY2017 vs. -0.0% in FY2014
- eGain 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 -1.6%
- eGain Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's in pair with industry average of 7.4%
- CAPEX is quite volatile: $0m in FY2018, $0m in FY2017, $1m in FY2016, $1m in FY2015, $2m in FY2014
- The company has unprofitable business model: ROIC is -27.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
EGain Corporation's Revenue increased on 5.3%. Revenue growth showed acceleration in FY18Q4 - it increased 6.6% YoY. During the last 5 years Revenue growth bottomed in FY2017 at -16.1%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.6 pp from -0.90% to 2.7% in FY2018. During the last 5 years EBITDA Margin bottomed in FY2015 at -6.9% and was growing since that time.
Gross Margin showed almost no change in FY2018. SG&A as a % of Revenue decreased on 5.2 pp from 46.4% to 41.2% in FY2018. SG&A as a % of Revenue followed a declining trend at -4.3 pp per annum in the last 5 years.
Net Income margin increased on 7.1 pp from -10.3% to -3.2% in FY2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.22% in FY2018. EGain Corporation's CAPEX/Revenue decreased slightly on 0.75 pp from 0.98% in FY2015 to 0.22% in FY2018. For the last three years the average CAPEX/Revenue was 0.62%. CAPEX as a % of Revenue stuck to a declining trend at -0.47 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.4x and Debt / EBITDA is 5.6x. Debt dropped on 41.3% while cash increased on 8.2%.
eGain Corporation has no short term refinancing risk: cash is higher than short term debt (3,819.9%).
Management team
The company's CFO Eric N Smit has spent 16 years with the company.
Financial and operational results
FY ended 06/30/2018
eGain Corporation ($EGAN) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 70.262 | 75.913 | 69.375 | 58.215 | 61.307 | 5.3% |
| Gross Profit | 46.800 | 46.772 | 45.686 | 37.016 | 38.971 | 5.3% |
| SG&A | 40.896 | 42.016 | 35.496 | 26.988 | 25.248 | -6.4% |
| EBITDA | -0.025 | -5.267 | -1.035 | -0.526 | 1.650 | |
| Net Income | -5.246 | -12.429 | -6.240 | -6.020 | -1.991 | |
Balance Sheet
|
|---|
| Cash | 8.785 | 8.633 | 11.780 | 10.627 | 11.498 | 8.2% |
| Short Term Debt | 1.809 | 0.976 | 1.157 | 0.913 | 0.301 | -67.0% |
| Long Term Debt | 4.208 | 18.554 | 20.376 | 14.844 | 8.941 | -39.8% |
Cash flow
|
|---|
| Capex | 1.772 | 0.741 | 0.547 | 0.492 | 0.137 | -72.2% |
Ratios
|
|---|
| Revenue growth | 19.3% | 8.0% | -8.6% | -16.1% | 5.3% | |
| EBITDA growth | -100.6% | 20,968.0% | -80.3% | -49.2% | -413.7% | |
|
|---|
| Gross Margin | 66.6% | 61.6% | 65.9% | 63.6% | 63.6% | -0.0% |
| EBITDA Margin | -0.0% | -6.9% | -1.5% | -0.9% | 2.7% | 3.6% |
| SG&A, % of revenue | 58.2% | 55.3% | 51.2% | 46.4% | 41.2% | -5.2% |
| Net Income Margin | -7.5% | -16.4% | -9.0% | -10.3% | -3.2% | 7.1% |
| CAPEX, % of revenue | 2.5% | 1.0% | 0.8% | 0.8% | 0.2% | -0.6% |
|
|---|
| ROIC | -34.9% | -75.4% | -30.5% | -30.4% | -27.2% | 3.3% |
| ROE | -116.1% | -599.3% | | | | |
| Net Debt/EBITDA | | | | | -1.4x |
eGain Corporation ($EGAN) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 15 | 15 | 16 | 16 | | -1.2% | 2.7% | 13.7% | 6.6% |
| EBITDA | 0 | 0 | 1 | -0 | | | -48.5% | | -145.1% |
| Net Income | -1 | -1 | -0 | -1 | | | | | |
Balance Sheet
|
|---|
| Cash | 11 | 11 | 11 | 11 | | 13.3% | 10.7% | 5.7% | 8.2% |
| Short Term Debt | 1 | 1 | 0 | 0 | | -14.4% | -18.2% | -69.5% | -67.0% |
| Long Term Debt | 9 | 6 | 7 | 9 | | -43.4% | -68.5% | -62.5% | -39.8% |
Ratios
|
|---|
| Gross Margin | 62.8% | 63.7% | 65.5% | 62.2% | | -2.9% | -2.5% | 6.3% | -0.7% |
| EBITDA Margin | 3.0% | 1.8% | 6.9% | -0.9% | | 5.2% | -1.7% | 14.4% | -3.1% |
| Net Income Margin | -3.9% | -5.1% | -0.6% | -3.4% | | 12.5% | 1.9% | 17.5% | -3.1% |
Peers in Application Software
Below we provide eGain 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (150 companies) | 27.9% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| eGain Corporation ($EGAN) | | 8.0% | -8.6% | -16.1% | 5.3% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (149 companies) | 62.8% | 61.9% | 63.8% | 64.6% | 66.0% |
|---|
| eGain Corporation ($EGAN) | 66.6% | 61.6% | 65.9% | 63.6% | 63.6% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (151 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| eGain Corporation ($EGAN) | -0.0% | -6.9% | -1.5% | -0.9% | 2.7% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (152 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| eGain Corporation ($EGAN) | 2.5% | 1.0% | 0.8% | 0.8% | 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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (178 companies) | -14.2% | -11.2% | -9.2% | -10.2% | -9.1% |
|---|
| eGain Corporation ($EGAN) | -34.9% | -75.4% | -30.5% | -30.4% | -27.2% |
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. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.6x |
|---|
| eGain Corporation ($EGAN) | | | | | -1.4x |
