Xperi Corporation reports 58.7% EBITDA growth in 2018 and 10.8 pp EBITDA Margin growth from 23.4% to 34.3%
02/20/2019 • About Xperi Corporation (
$XPER) • By InTwits
Xperi Corporation reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Xperi Corporation is a fast growth stock: 2018 revenue growth was 8.7%, 5 year revenue CAGR was 19.2% at 2018 ROIC 2.2%
- EBITDA Margin is quite volatile: 34.3% in 2018, 23.4% in 2017, 47.6% in 2016, 67.5% in 2015, 66.7% in 2014
- Xperi Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has potentially unprofitable business model: ROIC is 2.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.6x while industry average is -1.6x
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 increased on 8.7%. Revenue growth showed acceleration in 18Q4 - it increased 61.3% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 0.63 pp from 3.1% to 3.7% in 2018. EBITDA Margin followed a declining trend at -10.9 pp per annum in 2014-2018.
Gross Margin decreased slightly on 1.6 pp from 98.3% to 96.7% in 2018. During the last 5 years Gross Margin topped in 2015 at 99.8% and was declining since that time. SG&A as a % of Revenue decreased on 7.2 pp from 38.7% to 31.5% in 2018.
Net Income margin surged on 15.1 pp from -15.1% to -0.071% in 2018. Net Income margin declined at -18.0 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 0.82%. 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 1.1%.
Return on investment
The company operates at low but positive ROIC (2.2%) and negative ROE (-0.1%). ROIC increased on 5.1 pp from -2.9% to 2.2% in 2018. ROE jumped on 11.9 pp from -12.0% to -0.055% in 2018. ROIC stuck to a declining trend at -9.9 pp per annum in 2014-2018. ROE followed a declining trend at -10.4 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.6x and Debt / EBITDA is 3.5x. Net Debt / EBITDA dropped on 2.4x from 5.0x to 2.6x in 2018. Debt dropped on 16.8% while cash dropped on 17.8%. During 2014-2018 Net Debt/EBITDA topped in 2017 at 5.0x.
The company has no short term refinancing risk: short term debt is zero.
Management team
Xperi Corporation's CEO Jon E Kirchner is a founder and has spent 2 years with the company. Xperi Corporation's CFO is Robert J Andersen. Robert J Andersen has 2 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
Xperi Corporation ($XPER) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 278.8 | 273.3 | 259.6 | 373.7 | 406.1 | 8.7% |
| Gross Profit | 277.4 | 272.7 | 259.0 | 367.4 | 392.8 | 6.9% |
| SG&A | 59.4 | 43.6 | 72.1 | 144.6 | 127.9 | -11.6% |
| EBITDA | 185.9 | 184.4 | 123.5 | 87.6 | 139.1 | 58.7% |
| Net Income | 170.5 | 117.0 | 56.1 | -56.6 | -0.3 | |
Balance Sheet
|
|---|
| Cash | 50.9 | 22.6 | 65.6 | 138.3 | 113.6 | -17.8% |
| Short Term Debt | 0.0 | 0.0 | 6.0 | 34.5 | 0.0 | -100.0% |
| Long Term Debt | 0.0 | 0.0 | 577.2 | 545.2 | 482.2 | -11.6% |
Cash flow
|
|---|
| Capex | 1.8 | 1.0 | 3.8 | 3.3 | 3.3 | 0.5% |
Ratios
|
|---|
| Revenue growth | 65.2% | -2.0% | -5.0% | 44.0% | 8.7% | |
| EBITDA growth | 429.3% | -0.8% | -33.0% | -29.1% | 58.7% | |
|
|---|
| Gross Margin | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% | -1.6% |
| EBITDA Margin | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% | 10.8% |
| SG&A, % of revenue | 21.3% | 16.0% | 27.8% | 38.7% | 31.5% | -7.2% |
| Net Income Margin | 61.1% | 42.8% | 21.6% | -15.1% | -0.1% | 15.1% |
| CAPEX, % of revenue | 0.6% | 0.4% | 1.5% | 0.9% | 0.8% | -0.1% |
|
|---|
| ROIC | 34.5% | 31.8% | 11.0% | -2.9% | 2.2% | 5.1% |
| ROE | 34.7% | 22.2% | 11.0% | -12.0% | -0.1% | 11.9% |
| Net Debt/EBITDA | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x | -2.4x |
Xperi Corporation ($XPER) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 66 | 64 | 72 | 204 | | -2.6% | -30.0% | -18.2% | 61.3% |
| EBITDA | -4 | 1 | 9 | 132 | | | -94.8% | -53.6% | 148.3% |
| Net Income | -33 | -28 | -22 | 83 | | | | | 1,366.3% |
Balance Sheet
|
|---|
| Cash | 35 | 56 | 52 | 114 | | -42.3% | -25.0% | -41.4% | -17.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -100.0% | -100.0% | -100.0% | -100.0% |
| Long Term Debt | 480 | 481 | 482 | 482 | | -16.7% | -16.4% | -16.2% | -11.6% |
Ratios
|
|---|
| Gross Margin | 96.5% | 96.7% | 93.1% | 98.1% | | -1.5% | -1.8% | -5.0% | -0.4% |
| EBITDA Margin | -5.4% | 2.0% | 12.6% | 64.8% | | 8.7% | -24.6% | -9.6% | 22.7% |
| Net Income Margin | -50.4% | -44.2% | -30.1% | 40.5% | | -34.0% | -1.4% | -16.4% | 36.1% |
Peers in Semiconductor Equipment
Below we provide Xperi Corporation benchmarking against other companies in Semiconductor Equipment 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 |
|---|
| Atomera Incorporated ($ATOM) | | | | | 123.6% |
| ACM Research, Inc. ($ACMR) | | | -12.3% | 33.4% | 104.5% |
| SCI Engineered Materials Inc ($SCIA) | | -13.0% | -32.1% | 24.4% | 67.0% |
| Aehr Test Systems ($AEHR) | | -49.1% | 44.7% | 30.3% | 56.4% |
| SolarEdge Technologies, Inc. ($SEDG) | | 144.0% | 50.7% | 23.9% | 54.4% |
| |
|---|
| Median (37 companies) | | -0.5% | 7.8% | 24.2% | 15.5% |
|---|
| Xperi Corporation ($XPER) | | -2.0% | -5.0% | 44.0% | 8.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 57.9% | 56.8% | 61.0% | 63.0% | 64.1% |
| Teradyne, Inc. ($TER) | 53.3% | 55.8% | 54.7% | 57.2% | 58.1% |
| Nova Measuring Instruments Ltd. ($NVMI) | 52.7% | 51.9% | 45.9% | 59.1% | 57.8% |
| Nanometrics Incorporated ($NANO) | 47.2% | 47.9% | 51.6% | 52.9% | 56.7% |
| Rudolph Technologies, Inc. ($RTEC) | 52.7% | 53.9% | 53.1% | 52.8% | 54.2% |
| |
|---|
| Median (38 companies) | 34.4% | 38.3% | 37.3% | 43.2% | 40.2% |
|---|
| Xperi Corporation ($XPER) | 99.5% | 99.8% | 99.8% | 98.3% | 96.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 29.2% | 26.4% | 34.4% | 38.3% | 39.6% |
| DAQO New Energy Corp. ($DQ) | 32.9% | 31.6% | 43.3% | 49.1% | 36.1% |
| Lam Research Corporation ($LRCX) | 21.1% | 20.3% | 23.2% | 27.6% | 32.0% |
| Cabot Microelectronics Corporation ($CCMP) | 21.6% | 22.6% | 23.4% | 27.2% | 31.5% |
| Versum Materials, Inc. ($VSM) | 23.4% | 27.6% | 33.3% | 30.8% | 31.0% |
| |
|---|
| Median (37 companies) | 6.8% | 9.8% | 11.4% | 16.0% | 16.2% |
|---|
| Xperi Corporation ($XPER) | 66.7% | 67.5% | 47.6% | 23.4% | 34.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Rubicon Technology, Inc. ($RBCN) | 15.0% | 4.0% | 3.6% | 0.0% | 58.8% |
| DAQO New Energy Corp. ($DQ) | 42.2% | 44.7% | 29.5% | 19.8% | 47.4% |
| AXT Inc ($AXTI) | 2.4% | 5.4% | 3.4% | 21.6% | 39.6% |
| STR Holdings Inc ($STRI) | 7.9% | 8.1% | 1.6% | 9.0% | 36.6% |
| Photronics, Inc. ($PLAB) | 20.0% | 19.8% | 10.4% | 20.4% | 17.3% |
| |
|---|
| Median (37 companies) | 2.3% | 2.9% | 2.6% | 3.2% | 3.0% |
|---|
| Xperi Corporation ($XPER) | 0.6% | 0.4% | 1.5% | 0.9% | 0.8% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| KLA-Tencor Corporation ($KLAC) | 17.9% | 16.5% | 27.2% | 34.0% | 39.9% |
| Lam Research Corporation ($LRCX) | 10.7% | 10.9% | 11.8% | 18.7% | 33.9% |
| Versum Materials, Inc. ($VSM) | | 26.2% | 32.4% | 30.0% | 32.1% |
| Advanced Energy Industries, Inc. ($AEIS) | 8.8% | 30.2% | 41.2% | 45.7% | 31.3% |
| SolarEdge Technologies, Inc. ($SEDG) | -815.6% | 33.6% | 31.2% | 26.5% | 28.6% |
| |
|---|
| Median (39 companies) | 3.4% | 5.2% | 6.9% | 13.1% | 12.1% |
|---|
| Xperi Corporation ($XPER) | 34.5% | 31.8% | 11.0% | -2.9% | 2.2% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Ultra Clean Holdings, Inc. ($UCTT) | -1.2x | 1.5x | 0.4x | -0.2x | 2.4x |
| Ichor Holdings ($ICHR) | 3.1x | 1.7x | -0.4x | 2.0x | 1.8x |
| Versum Materials, Inc. ($VSM) | -0.2x | -0.1x | 2.7x | 2.1x | 1.4x |
| DAQO New Energy Corp. ($DQ) | 4.6x | 4.3x | 2.3x | 0.9x | 1.2x |
| Entegris, Inc. ($ENTG) | 3.6x | 1.4x | 0.7x | 0.1x | 1.1x |
| |
|---|
| Median (31 companies) | -1.2x | -1.3x | -1.3x | -0.7x | -1.0x |
|---|
| Xperi Corporation ($XPER) | -0.3x | -0.1x | 4.2x | 5.0x | 2.6x |
