Talend S.A. reports 37.5% revenue growth in 2018 and almost no change in EBITDA Margin of -18.1%
02/14/2019 • About Talend S.A. (
$TLND) • By InTwits
Talend S.A. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Talend S.A. is a fast growth stock: 2018 revenue growth was 37.5%, 5 year revenue CAGR was 30.9% at 2018 ROIC -321%
- The company operates at negative EBITDA Margin: -18.1%
- Talend S.A. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 5.6%. Average EBITDA Margin for the same period was -21.7%. In 2018 SBC/Revenue was even higher: 10.2%
- Talend S.A. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 3.1%
- CAPEX is quite volatile: $5m in 2018, $2m in 2017, $1m in 2016, $1m in 2015, $3m in 2014
- The company has unprofitable business model: ROIC is -321.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.2x while industry average is -1.5x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 37.5%. Revenue growth showed small slowdown in 18Q4 - it was 34.1% YoY. During 2014-2018 Revenue growth topped in 2017 at 40.2%. EBITDA Margin showed almost no change in 2018. EBITDA Margin followed a growing trend at 4.0 pp per annum in the last 5 years.
Gross Margin decreased slightly on 1.2 pp from 77.0% to 75.8% in 2018. During the last 5 years Gross Margin topped in 2017 at 77.0%. SG&A as a % of Revenue decreased on 2.9 pp from 78.3% to 75.4% in 2018. SG&A as a % of Revenue declined at -3.3 pp per annum in 2014-2018. Stock Based Compensation (SBC) as a % of Revenue increased on 6.0 pp from 4.2% to 10.2% in 2018.
Net Income margin increased slightly on 1.2 pp from -21.0% to -19.8% in 2018. Net Income margin stuck to a growing trend at 4.0 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 2.5% in 2018. CAPEX/Revenue increased slightly on 1.4 pp from 1.0% in 2015 to 2.5% in 2018. For the last three years the average CAPEX/Revenue was 1.8%. During 2014-2018 CAPEX as a % of Revenue bottomed in 2015 at 1.0% and was growing since that time.
Accounts receivable as a % of Revenue decreased on 5.4 pp from 38.4% to 33.1% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.2x and Debt / EBITDA is . Debt dropped on 26.0% while cash dropped on 61.2%.
Talend S.A. has no short term refinancing risk: cash is higher than short term debt (16,221.2%).
Management team
At the end of financial year the company had 3.1% shares owned by insiders. Insider ownership didn't change in 2018.
Financial and operational results
FY ended 12/31/2018
Talend S.A. ($TLND) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 62.6 | 76.0 | 106.0 | 148.6 | 204.3 | 37.5% |
| Gross Profit | 46.4 | 57.3 | 80.4 | 114.4 | 154.8 | 35.3% |
| SG&A | 55.9 | 63.6 | 87.2 | 116.3 | 154.0 | 32.4% |
| EBITDA | -21.4 | -20.0 | -24.5 | -26.6 | -37.0 | |
| EBIT | -22.8 | -21.4 | -26.0 | -28.7 | -41.5 | |
| Interest expence | 0.1 | 0.3 | 0.8 | | | |
| Tax | 0.2 | -0.0 | 0.1 | 0.3 | -0.3 | -199.7% |
| Net Income | -22.5 | -22.0 | -24.2 | -31.2 | -40.4 | |
| Stock Based Compensation | 1.3 | 2.4 | 3.0 | 6.3 | 20.8 | 231.8% |
Balance Sheet
|
|---|
| Cash | 9.2 | 6.9 | 91.0 | 87.0 | 33.7 | -61.2% |
| Accounts Receivable | 18.8 | 26.9 | 38.0 | 57.1 | 67.5 | 18.2% |
| Accounts Payable | | | | | 5.8 | |
| Short Term Debt | 2.6 | 0.2 | 0.1 | 1.2 | 0.2 | -82.5% |
| Long Term Debt | 0.3 | 10.0 | 0.0 | 0.0 | 0.7 | 9,557.1% |
Cash flow
|
|---|
| Capex | 2.6 | 0.8 | 1.4 | 2.2 | 5.0 | 125.1% |
Ratios
|
|---|
| Revenue growth | 17.9% | 21.4% | 39.5% | 40.2% | 37.5% | |
| EBITDA growth | 28.6% | -6.5% | 22.6% | 8.8% | 38.8% | |
|
|---|
| Gross Margin | 74.2% | 75.4% | 75.9% | 77.0% | 75.8% | -1.2% |
| EBITDA Margin | -34.1% | -26.3% | -23.1% | -17.9% | -18.1% | -0.2% |
| EBIT Margin | -36.4% | -28.2% | -24.5% | -19.3% | -20.3% | -1.0% |
| SG&A, % of revenue | 89.4% | 83.8% | 82.2% | 78.3% | 75.4% | -2.9% |
| SBC, % of revenue | 2.0% | 3.1% | 2.8% | 4.2% | 10.2% | 6.0% |
| Net Income Margin | -36.0% | -29.0% | -22.9% | -21.0% | -19.8% | 1.2% |
| CAPEX, % of revenue | 4.1% | 1.0% | 1.3% | 1.5% | 2.5% | 1.0% |
|
|---|
| ROIC | | | | -303.7% | -321.0% | -17.3% |
| Interest expence / Average debt | 2.8% | 4.5% | 15.4% | | | |
People
|
|---|
| Insider ownership | 3.1% | 3.1% | 3.1% | 3.1% | 3.1% | 0.0% |
Talend S.A. ($TLND) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 47 | 50 | 52 | 56 | | 42.4% | 38.9% | 35.6% | 34.1% |
| EBITDA | -9 | -8 | -8 | -11 | | | | | |
| Net Income | -10 | -9 | -9 | -12 | | | | | |
Balance Sheet
|
|---|
| Cash | 95 | 93 | 90 | 34 | | 0.3% | -2.5% | -5.1% | -61.2% |
| Short Term Debt | 1 | 0 | 0 | 0 | | 980.9% | 1,866.7% | 1,660.0% | -82.5% |
| Long Term Debt | 0 | 1 | 1 | 1 | | -16.7% | 13,333.3% | 10,928.6% | 9,557.1% |
Ratios
|
|---|
| Gross Margin | 76.0% | 76.1% | 75.0% | 76.0% | | 0.2% | -1.1% | -3.4% | -0.5% |
| EBITDA Margin | -19.7% | -15.8% | -16.2% | -20.6% | | 0.5% | 1.1% | -5.9% | 3.4% |
| Net Income Margin | -21.6% | -17.6% | -17.8% | -22.0% | | 1.0% | 4.1% | -3.8% | 3.7% |
Peers in Systems Software
Below you can find Talend S.A. 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. ($FNJN) | | -6.2% | 292.3% | 174.6% | 63.0% |
| |
|---|
| Median (48 companies) | | 18.2% | 14.6% | 14.0% | 19.0% |
|---|
| Talend S.A. ($TLND) | | 21.4% | 39.5% | 40.2% | 37.5% |
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% |
| Attunity Ltd. ($ATTU) | 90.7% | 84.9% | 83.9% | 84.1% | 87.5% |
| |
|---|
| Median (53 companies) | 77.0% | 74.6% | 73.1% | 73.9% | 73.5% |
|---|
| Talend S.A. ($TLND) | 74.2% | 75.4% | 75.9% | 77.0% | 75.8% |
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. ($CA) | 33.9% | 36.7% | 37.2% | 36.1% | 35.3% |
| |
|---|
| Median (47 companies) | 1.0% | -5.0% | -8.0% | -3.6% | -3.9% |
|---|
| Talend S.A. ($TLND) | -34.1% | -26.3% | -23.1% | -17.9% | -18.1% |
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. ($ZS) | | 12.5% | 7.8% | 6.5% | 8.0% |
| |
|---|
| Median (48 companies) | 2.7% | 2.2% | 2.1% | 2.4% | 2.6% |
|---|
| Talend S.A. ($TLND) | 4.1% | 1.0% | 1.3% | 1.5% | 2.5% |
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. ($RHT) | 15.1% | 14.1% | 14.2% | 16.4% | 22.4% |
| |
|---|
| Median (56 companies) | 0.0% | 0.0% | -2.1% | -2.7% | -0.9% |
|---|
| Talend S.A. ($TLND) | | | | -303.7% | -321.0% |
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 (23 companies) | -2.4x | -1.4x | -1.2x | -0.6x | -0.4x |
|---|
