LivePerson, Inc. reports 26.2% CAPEX growth in 2018 and 14.1% Revenue growth
02/21/2019 • About LivePerson, Inc. (
$LPSN) • By InTwits
LivePerson, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -2.7%
- EBITDA Margin is quite volatile: -2.7% in 2018, -0.4% in 2017, -0.3% in 2016, 4.1% in 2015, 4.3% in 2014
- LivePerson, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.5%. At the same time it's in pair with industry average of 3.1%
- CAPEX is quite volatile: $24m in 2018, $38m in 2017, $20m in 2016, $11m in 2015, $23m in 2014
- The company has unprofitable business model: ROIC is -15.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
LivePerson, Inc.'s Revenue surged on 14.1%. Revenue growth showed acceleration in 18Q4 - it increased 14.5% YoY. During 2014-2018 Revenue growth bottomed in 2016 at -6.8% and was accelerating since that time. Revenue growth was financed by EBITDA margin decline. EBITDA Margin decreased on 2.3 pp from -0.36% to -2.7% in 2018. EBITDA Margin followed a declining trend at -1.8 pp per annum in the last 5 years.
Gross Margin increased slightly on 1.6 pp from 73.4% to 75.0% in 2018. During 2014-2018 Gross Margin bottomed in 2015 at 70.6% and was growing since that time. SG&A as a % of Revenue decreased slightly on 1.5 pp from 61.2% to 59.7% in 2018.
Net Income margin decreased slightly on 1.7 pp from -8.3% to -10.0% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 8.8%. The company showed CAPEX/Revenue growth of 3.4 pp from 5.4% in 2015 to 8.8% in 2018. Average CAPEX/Revenue for the last three years was 7.4%. CAPEX as a % of Revenue followed a growing trend at 1.00 pp per annum in 2014-2018.
Return on investment
The company operates at negative ROIC (-15.1%) and ROE (-16.1%). ROIC decreased on 2.5 pp from -12.5% to -15.1% in 2018. ROE decreased on 3.0 pp from -13.1% to -16.1% in 2018. ROIC followed a declining trend at -3.1 pp per annum in 2014-2018.
Leverage (Debt)
The company has no debt. Cash jumped on 18.4%.
Management team
LivePerson, Inc.'s CEO is Robert P Locascio. Robert P Locascio is a founder and has 18 years tenure with the company. LivePerson, Inc.'s CFO is Christopher E Greiner. Christopher E Greiner has 1 year tenure at the company.
Financial and operational results
FY ended 12/31/2018
LivePerson, Inc. ($LPSN) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 209.9 | 239.0 | 222.8 | 218.9 | 249.8 | 14.1% |
| Gross Profit | 157.2 | 168.7 | 159.6 | 160.7 | 187.4 | 16.6% |
| SG&A | 123.4 | 131.9 | 132.6 | 134.0 | 149.2 | 11.3% |
| EBITDA | 9.0 | 9.7 | -0.7 | -0.8 | -6.7 | |
| Net Income | -7.3 | -26.4 | -25.9 | -18.2 | -25.0 | |
Balance Sheet
|
|---|
| Cash | 49.4 | 48.8 | 50.9 | 56.1 | 66.4 | 18.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 10.6 | 13.0 | 12.3 | 17.4 | 21.9 | 26.2% |
Ratios
|
|---|
| Revenue growth | 18.1% | 13.9% | -6.8% | -1.8% | 14.1% | |
| EBITDA growth | 43.7% | 8.1% | -107.5% | 8.4% | 752.7% | |
|
|---|
| Gross Margin | 74.9% | 70.6% | 71.6% | 73.4% | 75.0% | 1.6% |
| EBITDA Margin | 4.3% | 4.1% | -0.3% | -0.4% | -2.7% | -2.3% |
| SG&A, % of revenue | 58.8% | 55.2% | 59.5% | 61.2% | 59.7% | -1.5% |
| Net Income Margin | -3.5% | -11.1% | -11.6% | -8.3% | -10.0% | -1.7% |
| CAPEX, % of revenue | 5.0% | 5.4% | 5.5% | 7.9% | 8.8% | 0.8% |
|
|---|
| ROIC | -3.0% | -6.0% | -12.5% | -12.5% | -15.1% | -2.5% |
| ROE | -4.3% | -15.3% | -17.0% | -13.1% | -16.1% | -3.0% |
| Net Debt/EBITDA | -5.5x | -5.0x | | | |
LivePerson, Inc. ($LPSN) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 58 | 62 | 64 | 66 | | 14.4% | 14.0% | 13.7% | 14.5% |
| EBITDA | 0 | -4 | -1 | -3 | | | | -113.9% | |
| Net Income | -3 | -8 | -7 | -6 | | | | | |
Balance Sheet
|
|---|
| Cash | 57 | 70 | 66 | 66 | | 20.4% | 28.3% | 22.1% | 18.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 76.0% | 74.0% | 75.6% | 74.4% | | 3.1% | 2.0% | 1.3% | 0.1% |
| EBITDA Margin | 0.4% | -6.0% | -0.9% | -4.1% | | 1.8% | -1.7% | -8.0% | -0.9% |
| Net Income Margin | -5.5% | -13.5% | -11.0% | -9.8% | | 5.6% | 0.4% | -8.6% | -3.4% |
Peers in Application Software
Below we provide LivePerson, Inc. benchmarking against other companies in Application Software 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 |
|---|
| 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 13.6% | 14.3% | 15.7% | 15.2% |
|---|
| LivePerson, Inc. ($LPSN) | | 13.9% | -6.8% | -1.8% | 14.1% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 65.7% |
|---|
| LivePerson, Inc. ($LPSN) | 74.9% | 70.6% | 71.6% | 73.4% | 75.0% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| LivePerson, Inc. ($LPSN) | 4.3% | 4.1% | -0.3% | -0.4% | -2.7% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| LivePerson, Inc. ($LPSN) | 5.0% | 5.4% | 5.5% | 7.9% | 8.8% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.2% | -10.2% | -9.3% |
|---|
| LivePerson, Inc. ($LPSN) | -3.0% | -6.0% | -12.5% | -12.5% | -15.1% |
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) | -1.2x | -0.9x | -0.9x | -0.8x | -0.7x |
|---|
