Inphi Corporation revenue dropped on 15.4% and EBITDA Margin increased slightly on 0.71 pp from 2.2% to 2.9%
01/29/2019 • About Inphi Corporation (
$IPHI) • By InTwits
Inphi Corporation reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 2.9% in 2018, 2.2% in 2017, 21.1% in 2016, 9.0% in 2015, -4.6% in 2014
- Inphi Corporation has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.4%. At the same time it's a lot of higher than industry average of 7.6%.
- CAPEX is quite volatile: $7m in FY2018, $3m in FY2017, $6m in FY2016, $9m in FY2015, $12m in FY2014
- The company has unprofitable business model: ROIC is -9.0%
- It operates with high leverage: Net Debt/EBITDA is 32.2x while industry average is 2.0x
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 dropped on 15.4%. Annual revenue decline showed slowdown in 18Q4 - revenue increased slightly on 0.99%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.71 pp from 2.2% to 2.9% in 2018.
Gross Margin showed almost no change in 2018. During 2014-2018 Gross Margin topped in 2016 at 67.9% and was declining since that time. SG&A as a % of Revenue increased on 5.2 pp from 19.0% to 24.2% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2016 at 17.9% and was growing since that time.
Net Income margin dropped on 11.0 pp from -21.5% to -32.5% in 2018. During the last 5 years Net Income margin topped in 2016 at 37.4% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In 2018 Inphi Corporation had CAPEX/Revenue of 10.8%. The company's CAPEX/Revenue increased on 2.2 pp from 8.6% in 2015 to 10.8% in 2018. For the last three years the average CAPEX/Revenue was 10.0%. Battling declining revenue the company made large investments to CAPEX (371% of EBITDA) but that didn't help at least in this year. During the last 5 years CAPEX as a % of Revenue bottomed in 2016 at 8.4% and was growing since that time.
Return on investment
The company operates at negative ROIC (-9.0%) and ROE (-24.6%). ROIC decreased slightly on 0.83 pp from -8.1% to -9.0% in 2018. ROE decreased on 7.5 pp from -17.1% to -24.6% in 2018. During the last 5 years ROIC topped in 2016 at 3.7% and was declining since that time. During the last 5 years ROE topped in 2016 at 26.4% and was declining since that time.
Leverage (Debt)
Debt level is 32.2x Net Debt / EBITDA and 52.3x Debt / EBITDA. Net Debt / EBITDA dropped on 1.5x from 33.7x to 32.2x in 2018. Debt increased on 6.3% while cash increased on 5.2%.
The company has no short term refinancing risk: short term debt is zero.
Management team
The company's CEO is Ford G Tamer. Ford G Tamer is a founder and has 7 years tenure with the company. The company's CFO is John S Edmunds. John S Edmunds has 11 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
Inphi Corporation ($IPHI) key annual financial indicatorsmln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
---|
P&L
|
---|
Revenue | 156.1 | 192.7 | 266.3 | 348.2 | 294.5 | -15.4% |
Gross Profit | 85.7 | 120.0 | 180.7 | 196.5 | 165.1 | -16.0% |
SG&A | 36.2 | 41.8 | 47.7 | 66.2 | 71.4 | 7.9% |
EBITDA | -7.3 | 17.3 | 56.2 | 7.7 | 8.6 | 11.8% |
Net Income | -22.6 | -13.6 | 99.5 | -74.9 | -95.8 | |
Balance Sheet
|
---|
Cash | 30.4 | 283.0 | 144.9 | 163.5 | 172.0 | 5.2% |
Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Long Term Debt | 0.0 | 171.7 | 396.9 | 421.4 | 447.8 | 6.3% |
Cash flow
|
---|
Capex | 21.2 | 16.6 | 22.3 | 37.4 | 31.7 | -15.3% |
Ratios
|
---|
Revenue growth | 52.1% | 23.4% | 38.2% | 30.8% | -15.4% | |
EBITDA growth | 51.3% | -339.2% | 223.9% | -86.4% | 11.8% | |
|
---|
Gross Margin | 54.9% | 62.3% | 67.9% | 56.4% | 56.1% | -0.4% |
EBITDA Margin | -4.6% | 9.0% | 21.1% | 2.2% | 2.9% | 0.7% |
SG&A, % of revenue | 23.2% | 21.7% | 17.9% | 19.0% | 24.2% | 5.2% |
Net Income Margin | -14.5% | -7.0% | 37.4% | -21.5% | -32.5% | -11.0% |
CAPEX, % of revenue | 13.6% | 8.6% | 8.4% | 10.8% | 10.8% | 0.0% |
|
---|
ROIC | -10.8% | -2.7% | 3.7% | -8.1% | -9.0% | -0.8% |
ROE | -11.3% | -5.1% | 26.4% | -17.1% | -24.6% | -7.5% |
Net Debt/EBITDA | | -6.4x | 4.5x | 33.7x | 32.2x | -1.5x |
Inphi Corporation ($IPHI) key quoterly financial indicators
mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
---|
P&L
|
---|
Revenue | 60 | 70 | 78 | 87 | | -35.7% | -17.3% | -7.7% | 1.0% |
EBITDA | -9 | -3 | 6 | 15 | | -161.6% | -128.9% | | 5.0% |
Net Income | -23 | -28 | -23 | -22 | | | | | -21,306.9% |
Balance Sheet
|
---|
Cash | 144 | 155 | 172 | 172 | | -14.0% | -4.4% | 4.0% | 5.2% |
Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
Long Term Debt | 428 | 434 | 441 | 448 | | 6.2% | 6.2% | 6.2% | 6.3% |
Ratios
|
---|
Gross Margin | 54.1% | 56.7% | 55.7% | 57.2% | | -3.1% | 0.1% | 5.9% | -4.7% |
EBITDA Margin | -15.1% | -4.8% | 8.3% | 16.8% | | -30.8% | -18.6% | 46.8% | 0.6% |
Net Income Margin | -38.2% | -40.8% | -29.1% | -25.0% | | -26.2% | -23.0% | 28.6% | -25.1% |
Peers in Semiconductors
Below you can find Inphi Corporation benchmarking vs. other companies in Semiconductors 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 |
---|
NanoFlex Power Corp ($OPVS) | | | | 72.5% | 354.8% |
MoSys, Inc. ($MOSY) | | -18.4% | 37.2% | 46.8% | 87.7% |
SMART Global Holdings, Inc. ($SGH) | | | -16.9% | 42.5% | 69.3% |
Micron Technology, Inc. ($MU) | | -1.0% | -23.4% | 63.9% | 49.5% |
Adesto Technologies Corporation ($IOTS) | | 4.3% | 1.6% | 27.6% | 48.8% |
|
---|
Median (67 companies) | 54.6% | 8.5% | 4.4% | 10.9% | 5.0% |
---|
Inphi Corporation ($IPHI) | | 23.4% | 38.2% | 30.8% | -15.4% |
Top companies by Gross margin, %
Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
---|
CEVA, Inc. ($CEVA) | 90.2% | 90.9% | 91.6% | 92.1% | 89.8% |
NVE Corporation ($NVEC) | 77.9% | 80.3% | 76.1% | 78.5% | 79.0% |
Rambus, Inc. ($RMBS) | 85.9% | 84.7% | 80.1% | 79.9% | 76.8% |
Universal Display Corporation ($OLED) | 76.0% | 64.2% | 83.9% | 80.8% | 75.5% |
Intermolecular, Inc. ($IMI) | 48.3% | 57.4% | 66.5% | 67.5% | 70.3% |
|
---|
Median (65 companies) | 45.3% | 47.0% | 47.2% | 48.6% | 50.4% |
---|
Inphi Corporation ($IPHI) | 54.9% | 62.3% | 67.9% | 56.4% | 56.1% |
Top companies by EBITDA margin, %
Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
---|
NVE Corporation ($NVEC) | 58.8% | 66.0% | 61.8% | 65.6% | 65.1% |
Micron Technology, Inc. ($MU) | 31.7% | 35.0% | 25.4% | 47.9% | 65.0% |
NXP Semiconductors N.V. ($NXPI) | 25.7% | 41.5% | 21.6% | 46.2% | 49.9% |
Texas Instruments Incorporated ($TXN) | 39.7% | 42.0% | 43.5% | 46.7% | 48.6% |
Intel Corp ($INTC) | 42.8% | 41.0% | 35.2% | 41.7% | 45.7% |
|
---|
Median (66 companies) | 9.9% | 11.5% | 9.2% | 10.7% | 10.0% |
---|
Inphi Corporation ($IPHI) | -4.6% | 9.0% | 21.1% | 2.2% | 2.9% |
Top companies by CAPEX/Revenue, %
Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
---|
Alpha and Omega Semiconductor Limited ($AOSL) | 3.0% | 6.6% | 6.5% | 12.2% | 42.2% |
Renesola Ltd. ($SOL) | 3.5% | 0.0% | 0.0% | 78.0% | 41.7% |
First Solar, Inc. ($FSLR) | 7.6% | 4.0% | 7.9% | 17.5% | 33.0% |
Sigma Designs Inc ($SIGM) | 11.0% | 6.5% | 6.2% | 14.1% | 29.3% |
Micron Technology, Inc. ($MU) | 19.0% | 24.8% | 46.9% | 23.3% | 29.2% |
|
---|
Median (66 companies) | 3.6% | 4.0% | 3.6% | 4.7% | 4.4% |
---|
Inphi Corporation ($IPHI) | 13.6% | 8.6% | 8.4% | 10.8% | 10.8% |
Top companies by ROIC, %
Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
---|
SMART Global Holdings, Inc. ($SGH) | | | 2.5% | 21.5% | 51.7% |
Texas Instruments Incorporated ($TXN) | 25.1% | 29.8% | 34.9% | 43.1% | 47.5% |
Micron Technology, Inc. ($MU) | 18.8% | 15.8% | 0.8% | 21.5% | 42.9% |
Applied Materials Inc ($AMAT) | 15.8% | 15.2% | 19.0% | 31.2% | 36.4% |
NVIDIA Corporation ($NVDA) | 9.2% | 13.3% | 13.1% | 27.3% | 35.3% |
|
---|
Median (73 companies) | 5.7% | 3.8% | 1.4% | 3.2% | 5.2% |
---|
Inphi Corporation ($IPHI) | -10.8% | -2.7% | 3.7% | -8.1% | -9.0% |
Top companies by Net Debt / EBITDA
Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
---|
MACOM Technology Solutions Holdings, Inc. ($MTSI) | 25.4x | 3.3x | 3.0x | 7.2x | 98.6x |
JinkoSolar Holding Company Limited ($JKS) | 4.2x | 3.3x | 4.1x | 11.0x | 8.2x |
Lattice Semiconductor Corporation ($LSCC) | -1.8x | | 6.5x | 19.0x | 3.9x |
Renesola Ltd. ($SOL) | 7.0x | 35.0x | 123.6x | 2.3x | 3.3x |
Himax Technologies, Inc. ($HIMX) | -0.6x | 1.1x | -0.6x | 0.4x | 3.3x |
|
---|
Median (45 companies) | -0.5x | -0.2x | -0.0x | 0.4x | 0.3x |
---|
Inphi Corporation ($IPHI) | | -6.4x | 4.5x | 33.7x | 32.2x |