Amber Road, Inc. reports 7.7% revenue growth in 2018 and almost no change in EBITDA Margin of -8.1%
02/11/2019 • About Amber Road, Inc. (
$AMBR) • By InTwits
Amber Road, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Amber Road, Inc. is a growth stock: 2018 revenue growth was 7.7%, 5 year revenue CAGR was 10.1% at 2018 ROIC -23.8%
- The company operates at negative EBITDA Margin: -8.1%
- Amber Road, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -17.6%
- Amber Road, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 11.4%. At the same time it's in pair with industry average of 13.3%
- CAPEX is quite volatile: $3m in 2018, $2m in 2017, $3m in 2016, $29m in 2015, $3m in 2014
- The company has unprofitable business model: ROIC is -23.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Amber Road, Inc.'s Revenue increased on 7.7%. Revenue growth showed slowdown in 18Q4 - it was 6.1% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin jumped on 17.3 pp from -3.6% to 13.7% in 2018. EBITDA Margin followed a growing trend at 7.3 pp per annum in the last 5 years.
Gross Margin increased on 2.9 pp from 52.3% to 55.2% in 2018. During 2014-2018 Gross Margin bottomed in 2015 at 45.0% and was growing since that time. SG&A as a % of Revenue increased on 4.1 pp from 47.8% to 51.9% in 2018.
Net Income margin showed almost no change in 2018. Net Income margin followed a growing trend at 7.9 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.0% in 2018. Amber Road, Inc.'s CAPEX/Revenue dropped on 39.2 pp from 43.3% in 2015 to 4.0% in 2018. It's average CAPEX/Revenue for the last three years was 3.2%.
Return on investment
The company operates at negative ROIC (-23.8%) and ROE (-49.2%). ROIC decreased slightly on 1.9 pp from -21.9% to -23.8% in 2018. ROE decreased on 4.5 pp from -44.7% to -49.2% in 2018. ROIC stuck to a growing trend at 8.7 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is -1.0x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2018. Debt decreased on 5.1% while cash dropped on 19.7%.
Amber Road, Inc. has no short term refinancing risk: cash is higher than short term debt (379.9%).
Financial and operational results
FY ended 12/31/2018
Amber Road, Inc. ($AMBR) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 64.833 | 67.110 | 73.161 | 79.076 | 85.166 | 7.7% |
| Gross Profit | 37.345 | 30.216 | 37.425 | 41.335 | 47.015 | 13.7% |
| SG&A | 35.795 | 40.729 | 37.956 | 37.790 | 44.198 | 17.0% |
| EBITDA | -21.982 | -19.386 | -10.735 | -6.010 | -6.868 | |
| Net Income | -27.704 | -28.079 | -18.727 | -12.978 | -13.603 | |
Balance Sheet
|
|---|
| Cash | 41.242 | 17.855 | 15.408 | 9.361 | 7.515 | -19.7% |
| Short Term Debt | 1.322 | 1.911 | 1.749 | 2.067 | 1.978 | -4.3% |
| Long Term Debt | 2.142 | 21.125 | 20.891 | 20.300 | 19.252 | -5.2% |
Cash flow
|
|---|
| Capex | 2.694 | 29.028 | 2.519 | 1.716 | 3.435 | 100.1% |
Ratios
|
|---|
| Revenue growth | 23.4% | 3.5% | 9.0% | 8.1% | 7.7% | |
| EBITDA growth | 121.9% | -11.8% | -44.6% | -44.0% | 14.3% | |
|
|---|
| Gross Margin | 57.6% | 45.0% | 51.2% | 52.3% | 55.2% | 2.9% |
| EBITDA Margin | -33.9% | -28.9% | -14.7% | -7.6% | -8.1% | -0.5% |
| SG&A, % of revenue | 55.2% | 60.7% | 51.9% | 47.8% | 51.9% | 4.1% |
| Net Income Margin | -42.7% | -41.8% | -25.6% | -16.4% | -16.0% | 0.4% |
| CAPEX, % of revenue | 4.2% | 43.3% | 3.4% | 2.2% | 4.0% | 1.9% |
|
|---|
| ROIC | -58.3% | -39.6% | -28.1% | -21.9% | -23.8% | -1.9% |
| ROE | | -51.3% | -48.6% | -44.7% | -49.2% | -4.5% |
Amber Road, Inc. ($AMBR) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 20 | 21 | 22 | 22 | | 8.1% | 7.0% | 9.6% | 6.1% |
| EBITDA | -1 | -2 | 0 | -1 | | | | | |
| Net Income | -3 | -3 | -2 | -3 | | | | | |
Balance Sheet
|
|---|
| Cash | 9 | 8 | 10 | 8 | | -38.0% | -32.2% | 22.4% | -19.7% |
| Short Term Debt | 2 | 2 | 2 | 2 | | -2.2% | 5.6% | 6.1% | -4.3% |
| Long Term Debt | 7 | 20 | 20 | 19 | | -7.1% | -5.9% | -4.5% | -5.2% |
Ratios
|
|---|
| Gross Margin | 52.8% | 53.8% | 57.3% | 57.7% | | 3.5% | 4.1% | 2.6% | 2.7% |
| EBITDA Margin | -7.3% | -7.3% | 0.2% | -4.2% | | 5.9% | 4.1% | 4.3% | -1.7% |
| Net Income Margin | -15.8% | -15.2% | -7.3% | -12.0% | | 8.0% | 7.7% | 3.8% | -3.2% |
Peers in Application Software
Below you can find Amber Road, Inc. benchmarking vs. other companies in Application 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 |
|---|
| 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| Amber Road, Inc. ($AMBR) | | 3.5% | 9.0% | 8.1% | 7.7% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.1% |
|---|
| Amber Road, Inc. ($AMBR) | 57.6% | 45.0% | 51.2% | 52.3% | 55.2% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.2% |
|---|
| Amber Road, Inc. ($AMBR) | -33.9% | -28.9% | -14.7% | -7.6% | -8.1% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Amber Road, Inc. ($AMBR) | 4.2% | 43.3% | 3.4% | 2.2% | 4.0% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.2% | -11.2% | -9.2% | -10.2% | -9.3% |
|---|
| Amber Road, Inc. ($AMBR) | -58.3% | -39.6% | -28.1% | -21.9% | -23.8% |
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 (70 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
