Endurance International Group Holdings, Inc. EBITDA surged on 26.7% and EBITDA Margin increased on 6.0 pp from 20.0% to 26.0%
02/07/2019 • About Endurance International Group Holdings, Inc. (
$EIGI) • By InTwits
Endurance International Group Holdings, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Endurance International Group Holdings, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's in pair with industry average of 5.2%
- CAPEX is quite volatile: $7m in FY2018, $3m in FY2017, $6m in FY2016, $9m in FY2015, $12m in FY2014
- The company has business model with low profitability: ROIC is 7.5%
- It operates with high leverage: Net Debt/EBITDA is 5.8x while industry average is 2.9x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Endurance International Group Holdings, Inc.'s Revenue decreased on 2.7%. Revenue decline showed acceleration in 18Q4 - it was 4.0% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 6.0 pp from 20.0% to 26.0% in 2018.
Gross Margin increased on 5.8 pp from 48.7% to 54.5% in 2018. Gross Margin followed a growing trend at 3.6 pp per annum in 2014-2018. SG&A as a % of Revenue decreased on 4.5 pp from 30.8% to 26.3% in 2018. SG&A as a % of Revenue declined at -1.7 pp per annum in the last 5 years.
Net Income margin increased on 9.5 pp from -9.1% to 0.40% in 2018.
Investments (CAPEX, working capital and M&A)
Endurance International Group Holdings, Inc.'s CAPEX/Revenue was 4.0% in 2018. The company showed almost no change in CAPEX/Revenue from 2015 to 2018. It's average level of CAPEX/Revenue for the last three years was 3.7%.
Return on investment
The company operates at low ROIC (7.5%) and ROE (3.5%). ROIC increased on 5.5 pp from 2.0% to 7.5% in 2018. ROE surged on 107 pp from -103% to 3.5% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.8x and Debt / EBITDA is 6.1x. Net Debt / EBITDA dropped on 2.1x from 7.8x to 5.8x in 2018. Debt decreased on 5.1% while cash jumped on 33.3%.
Endurance International Group Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (221.7%).
Valuation and dividends
Endurance International Group Holdings, Inc.'s trades at EV/EBITDA 9.3x and P/E 233.1x.
Management team
Jeffrey H Fox "Jeff" is a Endurance International Group Holdings, Inc.'s CEO. Jeffrey H Fox "Jeff" is a founder and has spent 2 years with the company. The company's CFO is Marc Montagner. Marc Montagner has 3 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
Endurance International Group Holdings, Inc. ($EIGI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 630 | 741 | 1,111 | 1,177 | 1,145 | -2.7% |
| Gross Profit | 248 | 316 | 527 | 573 | 625 | 9.0% |
| SG&A | 216 | 236 | 359 | 363 | 302 | -16.8% |
| EBITDA | 146 | 178 | 165 | 235 | 298 | 26.7% |
| Net Income | -43 | -26 | -73 | -107 | 5 | |
Balance Sheet
|
|---|
| Cash | 32 | 33 | 54 | 66 | 89 | 33.3% |
| Short Term Debt | 64 | 83 | 42 | 42 | 40 | -3.8% |
| Long Term Debt | 1,031 | 1,023 | 1,952 | 1,866 | 1,770 | -5.1% |
Cash flow
|
|---|
| Capex | 24 | 31 | 37 | 43 | 46 | 6.5% |
Ratios
|
|---|
| Revenue growth | 21.1% | 17.7% | 49.9% | 5.9% | -2.7% | |
| EBITDA growth | 132.0% | 21.8% | -7.7% | 43.0% | 26.7% | |
|
|---|
| Gross Margin | 39.4% | 42.7% | 47.4% | 48.7% | 54.5% | 5.8% |
| EBITDA Margin | 23.2% | 24.0% | 14.8% | 20.0% | 26.0% | 6.0% |
| SG&A, % of revenue | 34.3% | 31.9% | 32.3% | 30.8% | 26.3% | -4.5% |
| Net Income Margin | -6.8% | -3.5% | -6.6% | -9.1% | 0.4% | 9.5% |
| CAPEX, % of revenue | 3.8% | 4.2% | 3.4% | 3.7% | 4.0% | 0.3% |
|
|---|
| ROIC | 1.0% | 4.2% | -2.3% | 2.0% | 7.5% | 5.5% |
| ROE | -25.9% | -14.6% | -47.9% | -103.5% | 3.5% | 107.0% |
| Net Debt/EBITDA | 7.3x | 6.0x | 11.8x | 7.8x | 5.8x | -2.1x |
Endurance International Group Holdings, Inc. ($EIGI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 291 | 288 | 284 | 282 | | -1.3% | -1.5% | -3.9% | -4.0% |
| EBITDA | 69 | 77 | 81 | 72 | | 13.5% | 24.2% | 68.6% | 10.7% |
| Net Income | -7 | -2 | -6 | 13 | | | | | 70.9% |
Balance Sheet
|
|---|
| Cash | 87 | 75 | 90 | 89 | | 25.7% | -7.3% | 27.2% | 33.3% |
| Short Term Debt | 41 | 39 | 39 | 40 | | 0.9% | 1.6% | 5.6% | -3.8% |
| Long Term Debt | 1,841 | 1,819 | 1,795 | 1,770 | | -5.3% | -6.1% | -6.6% | -5.1% |
Ratios
|
|---|
| Gross Margin | 54.0% | 54.6% | 54.6% | 55.0% | | 4.4% | 4.7% | 8.4% | 5.9% |
| EBITDA Margin | 23.8% | 26.6% | 28.4% | 25.4% | | 3.1% | 5.5% | 12.2% | 3.4% |
| Net Income Margin | -2.4% | -0.7% | -2.2% | 4.5% | | 9.6% | 12.7% | 11.4% | 2.0% |
Peers in Internet Services & Infrastruc
Below we provide Endurance International Group Holdings, Inc. benchmarking against other companies in Internet Services & Infrastruc 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 |
|---|
| Liberated Syndication Inc ($LSYN) | | | | 20.4% | 108.0% |
| GTT Communications, Inc. ($GTT) | | 78.1% | 41.3% | 58.7% | 80.1% |
| MongoDB, Inc. ($MDB) | | | | 55.3% | 63.8% |
| Twilio Inc. ($TWLO) | | 87.9% | 66.1% | 43.9% | 62.9% |
| Okta, Inc. ($OKTA) | | | 109.5% | 86.6% | 60.0% |
| |
|---|
| Median (15 companies) | 25.5% | 11.7% | 13.3% | 13.7% | 19.2% |
|---|
| Endurance International Group Holdings, Inc. ($EIGI) | | 17.7% | 49.9% | 5.9% | -2.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | 68.1% | 77.5% | 84.9% |
| VeriSign, Inc. ($VRSN) | 81.3% | 81.8% | 82.6% | 83.4% | 84.2% |
| Wix.com Ltd. ($WIX) | 81.6% | 82.8% | 84.4% | 83.7% | 79.0% |
| MongoDB, Inc. ($MDB) | | | 68.0% | 70.5% | 74.2% |
| Carbonite, Inc. ($CARB) | 68.5% | 71.6% | 70.6% | 70.7% | 71.2% |
| |
|---|
| Median (15 companies) | 53.1% | 55.4% | 61.5% | 65.0% | 66.4% |
|---|
| Endurance International Group Holdings, Inc. ($EIGI) | 39.4% | 42.7% | 47.4% | 48.7% | 54.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 62.2% | 63.0% | 65.2% | 65.0% | 67.1% |
| Liberated Syndication Inc ($LSYN) | | | 32.0% | -29.9% | 32.2% |
| Internap Corporation ($INAP) | 20.0% | 21.0% | -5.4% | 28.4% | 30.5% |
| Akamai Technologies, Inc. ($AKAM) | 37.5% | 34.8% | 33.9% | 27.6% | 29.4% |
| 21Vianet Group, Inc. ($VNET) | 10.9% | 8.3% | -4.8% | -20.7% | 25.6% |
| |
|---|
| Median (15 companies) | 4.5% | 1.3% | -5.1% | -7.1% | 14.4% |
|---|
| Endurance International Group Holdings, Inc. ($EIGI) | 23.2% | 24.0% | 14.8% | 20.0% | 26.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 16.2% | 20.2% | 13.5% | 16.7% | 14.9% |
| 21Vianet Group, Inc. ($VNET) | 32.6% | 29.0% | 15.8% | 11.7% | 12.8% |
| Internap Corporation ($INAP) | 24.0% | 17.5% | 14.9% | 12.7% | 12.1% |
| Limelight Networks, Inc. ($LLNW) | 11.5% | 14.5% | 5.7% | 11.2% | 8.2% |
| GTT Communications, Inc. ($GTT) | 2.8% | 3.8% | 4.6% | 5.1% | 5.2% |
| |
|---|
| Median (15 companies) | 4.4% | 3.8% | 3.9% | 4.1% | 3.0% |
|---|
| Endurance International Group Holdings, Inc. ($EIGI) | 3.8% | 4.2% | 3.4% | 3.7% | 4.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 60.6% | 68.7% | 65.2% | 54.3% | 81.9% |
| Liberated Syndication Inc ($LSYN) | | | | -13.2% | 12.1% |
| Akamai Technologies, Inc. ($AKAM) | 15.5% | 12.5% | 11.9% | 7.9% | 8.2% |
| GoDaddy Inc. ($GDDY) | -3.3% | -1.7% | 2.9% | 2.7% | 4.6% |
| 21Vianet Group, Inc. ($VNET) | -1.5% | -3.6% | -8.9% | -14.6% | 2.8% |
| |
|---|
| Median (16 companies) | -3.0% | -6.9% | -18.5% | -14.6% | 1.0% |
|---|
| Endurance International Group Holdings, Inc. ($EIGI) | 1.0% | 4.2% | -2.3% | 2.0% | 7.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GTT Communications, Inc. ($GTT) | 3.1x | 7.4x | 6.8x | 7.2x | 12.7x |
| Internap Corporation ($INAP) | 5.1x | 5.3x | | 6.5x | 6.9x |
| GoDaddy Inc. ($GDDY) | 14.0x | 5.4x | 2.3x | 6.8x | 3.9x |
| VeriSign, Inc. ($VRSN) | 1.9x | 2.5x | 2.2x | 2.6x | 1.8x |
| 21Vianet Group, Inc. ($VNET) | 10.7x | 5.6x | | | 1.0x |
| |
|---|
| Median (9 companies) | 2.5x | 2.5x | 1.3x | 2.6x | 1.0x |
|---|
| Endurance International Group Holdings, Inc. ($EIGI) | 7.3x | 6.0x | 11.8x | 7.8x | 5.8x |
