Attunity Ltd. reports 189% Net Income growth in 2018 and 12.1 pp EBITDA Margin growth from -1.6% to 10.5%
01/31/2019 • About Attunity Ltd. (
$ATTU) • By InTwits
Attunity Ltd. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Attunity Ltd. is a fast growth stock: 2018 revenue growth was 38.9%, 5 year revenue CAGR was 27.8% at 2018 ROIC 12.0%
- Attunity Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.0%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $2m in FY2018, $2m in FY2017, $3m in FY2016, $5m in FY2015, $3m in FY2014
- The company has highly profitable business model: ROIC is 12.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 38.9%. Revenue growth showed acceleration in 18Q4 - it increased 42.2% YoY. During 2014-2018 Revenue growth bottomed in 2016 at 13.1% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.6 pp from 0.32% to 1.9% in FY2018. During 2014-2018 EBITDA Margin bottomed in 2016 at -15.6% and was growing since that time.
Gross Margin increased on 3.4 pp from 84.1% to 87.5% in 2018. During 2014-2018 Gross Margin bottomed in 2016 at 83.9% and was growing since that time. SG&A as a % of Revenue decreased on 7.0 pp from 66.2% to 59.2% in 2018. During the last 5 years SG&A as a % of Revenue topped in 2016 at 72.8% and was declining since that time.
Net Income margin jumped on 17.7 pp from -10.8% to 6.9% in 2018. During 2014-2018 Net Income margin bottomed in 2016 at -19.6% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In 2018 Attunity Ltd. had CAPEX/Revenue of 0.80%. The company's CAPEX/Revenue showed almost no change from 2015 to 2018. It's average level of CAPEX/Revenue for the last three years was 0.84%.
Return on investment
The company operates at good ROIC (12.0%) while ROE is low (9.5%). ROIC surged on 19.0 pp from -7.0% to 12.0% in 2018. ROE surged on 25.5 pp from -16.0% to 9.5% in 2018. During 2014-2018 ROIC bottomed in 2016 at -33.3% and was growing since that time. During 2014-2018 ROE bottomed in 2016 at -30.2% and was growing since that time.
Leverage (Debt)
The company has no debt. Cash dropped on 59.6%.
Valuation and dividends
Attunity Ltd.'s trades at EV/EBITDA 45.5x and P/E 71.0x.
Financial and operational results
FY ended 12/31/2018
Attunity Ltd. ($ATTU) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 35.652 | 48.168 | 54.494 | 62.098 | 86.249 | 38.9% |
| Gross Profit | 32.331 | 40.890 | 45.714 | 52.243 | 75.506 | 44.5% |
| SG&A | 23.080 | 32.238 | 39.683 | 41.089 | 51.060 | 24.3% |
| EBITDA | 1.495 | 0.786 | -8.509 | -1.018 | 9.032 | |
| Net Income | -1.692 | -3.609 | -10.693 | -6.713 | 5.957 | |
Balance Sheet
|
|---|
| Cash | 18.959 | 12.522 | 9.166 | 29.087 | 11.764 | -59.6% |
| 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 | 0.446 | 0.625 | 0.456 | 0.556 | 0.688 | 23.7% |
Ratios
|
|---|
| Revenue growth | 40.8% | 35.1% | 13.1% | 14.0% | 38.9% | |
| EBITDA growth | 13.0% | -47.4% | -1,182.6% | -88.0% | -987.2% | |
|
|---|
| Gross Margin | 90.7% | 84.9% | 83.9% | 84.1% | 87.5% | 3.4% |
| EBITDA Margin | 4.2% | 1.6% | -15.6% | -1.6% | 10.5% | 12.1% |
| SG&A, % of revenue | 64.7% | 66.9% | 72.8% | 66.2% | 59.2% | -7.0% |
| Net Income Margin | -4.7% | -7.5% | -19.6% | -10.8% | 6.9% | 17.7% |
| CAPEX, % of revenue | 1.3% | 1.3% | 0.8% | 0.9% | 0.8% | -0.1% |
|
|---|
| ROIC | -0.2% | -7.3% | -33.3% | -7.0% | 12.0% | 19.0% |
| ROE | -5.5% | -10.4% | -30.2% | -16.0% | 9.5% | 25.5% |
| Net Debt/EBITDA | -12.7x | -15.9x | | | -1.3x |
Attunity Ltd. ($ATTU) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 18 | 20 | 22 | 26 | | 31.8% | 46.7% | 34.8% | 42.2% |
| EBITDA | 1 | 1 | 4 | 3 | | | | 582.5% | 337.2% |
| Net Income | 0 | 0 | 3 | 2 | | | | | |
Balance Sheet
|
|---|
| Cash | 17 | 15 | 14 | 12 | | 40.5% | 50.1% | 96.5% | -59.6% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 85.3% | 86.2% | 88.6% | 89.2% | | 0.3% | 4.3% | 5.0% | 3.6% |
| EBITDA Margin | 6.1% | 6.5% | 17.6% | 10.7% | | 7.3% | 21.8% | 14.1% | 7.2% |
| Net Income Margin | 1.1% | 1.3% | 13.9% | 9.4% | | 11.8% | 24.9% | 16.5% | 18.3% |
Peers in Systems Software
Below you can find Attunity Ltd. benchmarking vs. other companies in Systems 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 |
|---|
| Advantego Corp ($ADGO) | | | | | 973.8% |
| Solbright Group Inc ($SBRT) | | | 286.4% | 25.4% | 414.0% |
| Duos Technologies Group Inc ($DUOT) | | 61.0% | -9.8% | -36.4% | 210.2% |
| Dell Technologies Inc. ($DVMT) | | | | | 145.7% |
| Finjan Holdings, Inc. ($FNJN) | | -6.2% | 292.3% | 174.6% | 63.0% |
| |
|---|
| Median (48 companies) | | 18.2% | 14.7% | 16.6% | 19.0% |
|---|
| Attunity Ltd. ($ATTU) | | 35.1% | 13.1% | 14.0% | 38.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| StrikeForce Technologies Inc ($SFOR) | 97.0% | 96.9% | 98.3% | 95.4% | 94.0% |
| Varonis Systems, Inc. ($VRNS) | 90.2% | 90.6% | 90.5% | 90.4% | 89.8% |
| Check Point Software Technologies Ltd. ($CHKP) | 88.2% | 88.5% | 88.5% | 88.6% | 89.6% |
| Tableau Software, Inc. ($DATA) | 91.0% | 88.7% | 88.0% | 87.1% | 87.7% |
| Dell Technologies Inc. ($DVMT) | | | | 87.6% | 87.5% |
| |
|---|
| Median (53 companies) | 76.1% | 74.5% | 73.1% | 73.9% | 73.5% |
|---|
| Attunity Ltd. ($ATTU) | 90.7% | 84.9% | 83.9% | 84.1% | 87.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 54.3% | 52.4% | 49.8% | 50.7% | 48.8% |
| SolarWinds Corporation ($SWI) | | | -8.0% | 44.0% | 44.8% |
| Finjan Holdings, Inc. ($FNJN) | -192.1% | -295.2% | 2.2% | 30.2% | 42.0% |
| Oracle Corporation ($ORCL) | 46.2% | 43.8% | 40.8% | 40.2% | 40.8% |
| CA Inc. ($CA) | 33.9% | 36.7% | 37.2% | 36.1% | 35.3% |
| |
|---|
| Median (47 companies) | -2.4% | -6.6% | -8.0% | -5.4% | -4.7% |
|---|
| Attunity Ltd. ($ATTU) | 4.2% | 1.6% | -15.6% | -1.6% | 10.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| The Rubicon Project, Inc. ($RUBI) | 15.6% | 11.4% | 12.0% | 26.0% | 16.0% |
| CYREN Ltd. ($CYRN) | 2.4% | 4.4% | 3.2% | 5.8% | 9.2% |
| ServiceNow, Inc. ($NOW) | 8.0% | 8.7% | 7.6% | 7.8% | 8.6% |
| Qualys, Inc. ($QLYS) | 10.4% | 12.2% | 11.7% | 16.4% | 8.2% |
| Zscaler, Inc. ($ZS) | | 12.5% | 7.8% | 6.5% | 8.0% |
| |
|---|
| Median (48 companies) | 2.9% | 2.2% | 2.1% | 2.4% | 2.6% |
|---|
| Attunity Ltd. ($ATTU) | 1.3% | 1.3% | 0.8% | 0.9% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Finjan Holdings, Inc. ($FNJN) | -42.6% | -113.5% | 3.4% | 46.6% | 64.1% |
| Fortinet, Inc. ($FTNT) | 9.2% | 2.1% | 5.3% | 15.0% | 28.0% |
| Check Point Software Technologies Ltd. ($CHKP) | 22.2% | 23.7% | 24.7% | 26.8% | 25.5% |
| MAM Software Group, Inc. ($MAMS) | 13.3% | 19.3% | 21.1% | 24.2% | 25.2% |
| Red Hat, Inc. ($RHT) | 15.1% | 14.1% | 14.2% | 16.4% | 22.4% |
| |
|---|
| Median (56 companies) | 0.0% | 0.0% | 0.0% | -2.7% | -1.9% |
|---|
| Attunity Ltd. ($ATTU) | -0.2% | -7.3% | -33.3% | -7.0% | 12.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NXT-ID Inc. ($NXTD) | | | | | 9.7x |
| Symantec Corporation ($SYMC) | -3.2x | -1.5x | -5.0x | 10.0x | 4.7x |
| SolarWinds Corporation ($SWI) | | | | 6.2x | 4.1x |
| Oracle Corporation ($ORCL) | 0.4x | 1.2x | 1.6x | 2.4x | 2.4x |
| ServiceNow, Inc. ($NOW) | | | | 9.0x | 0.9x |
| |
|---|
| Median (22 companies) | -2.1x | -1.4x | -1.2x | -0.6x | -0.4x |
|---|
| Attunity Ltd. ($ATTU) | -12.7x | -15.9x | | | -1.3x |
