CSP Inc. Net Income jumped on 476% while Revenue dropped on 17.6%
12/27/2018 • About CSP Inc. (
$CSPI) • By InTwits
CSP Inc. reported FY2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- CSP Inc. is a company in decline: FY2018 revenue growth was -17.6%, 5 years revenue CAGR was -3.6%
- EBITDA Margin is quite volatile: -1.3% in FY2018, 4.4% in FY2017, 4.4% in FY2016, 1.0% in FY2015, 2.2% in FY2014
- CSP Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has unprofitable business model: ROIC is -5.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
CSP Inc.'s Revenue dropped on 17.6%. Revenue decline showed acceleration in FY18Q4 - it was 47.2% YoY. During the last 5 years Revenue growth topped in FY2016 at 15.7% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.7 pp from 4.4% to -1.3% in FY2018.
Gross Margin increased slightly on 1.0 pp from 24.2% to 25.2% in FY2018. SG&A as a % of Revenue increased on 5.2 pp from 17.7% to 22.9% in FY2018. During the last 5 years SG&A as a % of Revenue bottomed in FY2016 at 17.7% and was growing since that time.
Net Income margin jumped on 17.0 pp from 2.8% to 19.8% in FY2018. During the last 5 years Net Income margin bottomed in FY2015 at -0.24% and was growing since that time.
Investments (CAPEX, working capital and M&A)
CSP Inc.'s CAPEX/Revenue was 0.60% in FY2018. CAPEX/Revenue showed almost no change from FY2015 to FY2018. It's average level of CAPEX/Revenue for the last three years was 0.52%.
Return on investment
The company operates at negative ROIC (-5.8%) and low but positive ROE (50.5%). ROIC dropped on 22.8 pp from 17.1% to -5.8% in FY2018. ROE jumped on 38.1 pp from 12.4% to 50.5% in FY2018.
Leverage (Debt)
The company has no debt. Cash surged on 80.8%.
Financial and operational results
FY ended 09/30/2018
CSP Inc. ($CSPI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 84.6 | 89.3 | 103.4 | 88.5 | 72.9 | -17.6% |
| Gross Profit | 20.8 | 19.2 | 25.0 | 21.4 | 18.4 | -14.1% |
| SG&A | 16.1 | 16.1 | 18.3 | 15.7 | 16.7 | 6.7% |
| EBITDA | 1.9 | 0.9 | 4.5 | 3.9 | -1.0 | -125.2% |
| Net Income | 1.3 | -0.2 | 2.6 | 2.5 | 14.4 | 476.2% |
Balance Sheet
|
|---|
| Cash | 16.4 | 11.2 | 13.1 | 13.9 | 25.1 | 80.8% |
| 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 | 0.6 | 0.7 | 0.7 | 0.2 | 0.4 | 111.6% |
Ratios
|
|---|
| Revenue growth | -3.4% | 5.5% | 15.7% | -14.4% | -17.6% | |
| EBITDA growth | 51.9% | -53.0% | 416.1% | -13.8% | -125.2% | |
|
|---|
| Gross Margin | 24.6% | 21.5% | 24.2% | 24.2% | 25.2% | 1.0% |
| EBITDA Margin | 2.2% | 1.0% | 4.4% | 4.4% | -1.3% | -5.7% |
| SG&A, % of revenue | 19.0% | 18.1% | 17.7% | 17.7% | 22.9% | 5.2% |
| Net Income Margin | 1.6% | -0.2% | 2.5% | 2.8% | 19.8% | 17.0% |
| CAPEX, % of revenue | 0.7% | 0.8% | 0.7% | 0.2% | 0.6% | 0.4% |
|
|---|
| ROIC | 6.2% | 1.1% | 20.0% | 17.1% | -5.8% | -22.8% |
| ROE | 5.8% | -1.0% | 13.4% | 12.4% | 50.5% | 38.1% |
| Net Debt/EBITDA | -8.9x | -12.8x | -2.9x | -3.6x | |
CSP Inc. ($CSPI) key quoterly financial indicators
| mln. $ | FY18Q1 | FY18Q2 | FY18Q3 | FY18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 17 | 17 | 20 | 9 | | -16.5% | -34.4% | -24.2% | -47.2% |
| EBITDA | 0 | -1 | 0 | -1 | | 425.5% | -192.8% | -79.1% | -153.1% |
| Net Income | -1 | -1 | 0 | 16 | | | -238.8% | -99.6% | 1,038.2% |
Balance Sheet
|
|---|
| Cash | 18 | 12 | 10 | 25 | | 21.0% | 8.4% | -34.9% | 80.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 26.2% | 24.0% | 26.0% | 35.1% | | 3.9% | 1.5% | 2.7% | 4.7% |
| EBITDA Margin | 1.7% | -4.4% | 1.4% | -9.9% | | 1.5% | -7.6% | -3.8% | -19.7% |
| Net Income Margin | -7.2% | -3.6% | 0.0% | 182.6% | | -7.0% | -5.3% | -2.6% | 174.1% |
Peers in IT Consulting & Other Services
Below you can find CSP Inc. benchmarking vs. other companies in IT Consulting & Other Services 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 |
|---|
| Gopher Protocol Inc ($GOPH) | | -25.0% | 83.3% | 5,471.1% | 461.0% |
| CLPS Incorporation ($CLPS) | | | | 8.1% | 56.0% |
| EPAM Systems, Inc. ($EPAM) | | 25.2% | 26.9% | 25.0% | 27.1% |
| Gartner, Inc. ($IT) | | 7.0% | 13.0% | 35.5% | 20.1% |
| Computer Task Group, Incorporated ($CTG) | | -6.0% | -12.1% | -7.3% | 19.1% |
| |
|---|
| Median (35 companies) | | 3.3% | 7.7% | 4.0% | 3.9% |
|---|
| CSP Inc. ($CSPI) | | 5.5% | 15.7% | -14.4% | -17.6% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inpixon ($INPX) | 29.8% | 28.9% | 28.1% | 68.7% | 71.4% |
| Gartner, Inc. ($IT) | 60.5% | 61.2% | 61.3% | 60.1% | 63.1% |
| InterXion Holding N.V. ($INXN) | 59.2% | 60.8% | 61.5% | 61.1% | 60.9% |
| LiveRamp Holdings, Inc. ($RAMP) | 25.1% | 38.6% | 42.5% | 45.7% | 56.2% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 50.4% | 50.8% | 52.3% | 53.6% | 53.5% |
| |
|---|
| Median (37 companies) | 27.1% | 32.4% | 29.5% | 30.0% | 29.9% |
|---|
| CSP Inc. ($CSPI) | 24.6% | 21.5% | 24.2% | 24.2% | 25.2% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 41.3% | 44.9% | 43.3% | 42.2% | 42.8% |
| Switch, Inc. ($SWCH) | | 50.7% | 37.0% | 28.5% | 39.8% |
| Cognizant Technology Solutions Corporation ($CTSH) | 20.4% | 19.9% | 19.8% | 19.7% | 20.5% |
| Taoping Inc. ($TAOP) | -54.0% | -237.5% | -117.7% | 13.2% | 18.7% |
| DXC Technology Company ($DXC) | | | | 8.0% | 16.3% |
| |
|---|
| Median (36 companies) | 5.1% | 3.5% | 6.7% | 7.0% | 7.6% |
|---|
| CSP Inc. ($CSPI) | 2.2% | 1.0% | 4.4% | 4.4% | -1.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 62.5% | 48.1% | 57.4% | 50.5% | 78.3% |
| Switch, Inc. ($SWCH) | | 71.5% | 90.2% | 106.4% | 67.9% |
| Taoping Inc. ($TAOP) | 1.4% | 29.2% | 34.0% | 20.8% | 8.7% |
| Teradata Corporation ($TDC) | 2.0% | 2.1% | 2.3% | 3.6% | 7.1% |
| ServiceSource International, Inc. ($SREV) | 3.4% | 4.7% | 10.4% | 7.2% | 6.5% |
| |
|---|
| Median (35 companies) | 1.0% | 0.9% | 1.2% | 1.4% | 1.5% |
|---|
| CSP Inc. ($CSPI) | 0.7% | 0.8% | 0.7% | 0.2% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Accenture plc ($ACN) | 80.5% | 81.0% | 81.3% | 61.7% | 66.1% |
| The Hackett Group, Inc. ($HCKT) | 11.2% | 19.5% | 31.7% | 23.8% | 24.6% |
| Cognizant Technology Solutions Corporation ($CTSH) | 24.7% | 22.0% | 21.3% | 21.9% | 23.8% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 25.3% | 26.5% | 23.1% | 22.6% | 22.5% |
| EPAM Systems, Inc. ($EPAM) | 19.7% | 18.4% | 18.2% | 18.9% | 21.2% |
| |
|---|
| Median (44 companies) | 7.5% | 6.9% | 7.3% | 4.7% | 6.9% |
|---|
| CSP Inc. ($CSPI) | 6.2% | 1.1% | 20.0% | 17.1% | -5.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Infinite Group Inc ($IMCI) | | | 169.6x | | 10.5x |
| InterXion Holding N.V. ($INXN) | 3.3x | 2.9x | 3.4x | 3.8x | 4.6x |
| Gartner, Inc. ($IT) | 0.1x | 1.3x | 0.6x | 11.7x | 4.1x |
| Switch, Inc. ($SWCH) | | 2.2x | 4.0x | 3.2x | 3.3x |
| Presidio, Inc. ($PSDO) | 0.0x | | 5.6x | 3.6x | 3.1x |
| |
|---|
| Median (29 companies) | -0.2x | -0.2x | 0.4x | 0.8x | 0.8x |
|---|
