BSQUARE Corporation revenue decline decelerated from 17.1% in 2017 to 9.2% in 2018
02/25/2019 • About BSQUARE Corporation (
$BSQR) • By InTwits
BSQUARE Corporation reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- BSQUARE Corporation is a company in decline: 2018 revenue growth was -9.2%, 5 years revenue CAGR was -4.4%
- The company operates at negative EBITDA Margin: -18.1%
- BSQUARE Corporation motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -2.8% for the sames years
- BSQUARE Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has unprofitable business model: ROIC is -55.9%
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 decreased on 9.2%. Revenue decline showed acceleration in 18Q4 - it was 13.5% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased on 7.2 pp from -10.9% to -18.1% in 2018. EBITDA Margin stuck to a declining trend at -6.0 pp per annum in the last 5 years.
Gross Margin decreased slightly on 1.3 pp from 22.4% to 21.1% in 2018. SG&A as a % of Revenue decreased on 2.7 pp from 26.0% to 23.3% in 2018.
Net Income margin decreased on 7.5 pp from -11.2% to -18.7% in 2018. Net Income margin stuck to a declining trend at -5.9 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
In 2018 BSQUARE Corporation had CAPEX/Revenue of 0.63%. The company showed almost no change in CAPEX/Revenue from 2015 to 2018. For the last three years the average CAPEX/Revenue was 0.52%. CAPEX as a % of Revenue was relatively stable in the last 5 years.
Return on investment
The company operates at negative ROIC (-55.9%) and ROE (-55.2%). ROIC dropped on 28.8 pp from -27.0% to -55.9% in 2018. ROE dropped on 29.2 pp from -26.1% to -55.2% in 2018. ROIC followed a declining trend at -17.7 pp per annum in the last 5 years. ROE stuck to a declining trend at -17.3 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash dropped on 22.2%.
Management team
Peter J Biere is a BSQUARE Corporation's CFO. Peter J Biere has spent 2 years at the company.
Financial and operational results
FY ended 12/31/2018
BSQUARE Corporation ($BSQR) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 95.9 | 106.6 | 97.4 | 80.8 | 73.4 | -9.2% |
| Gross Profit | 16.5 | 20.5 | 15.8 | 18.1 | 15.5 | -14.4% |
| SG&A | 12.4 | 12.4 | 14.1 | 21.0 | 17.1 | -18.6% |
| EBITDA | 3.1 | 7.0 | -0.6 | -8.8 | -13.3 | |
| Net Income | 2.3 | 6.1 | -1.1 | -9.1 | -13.7 | |
Balance Sheet
|
|---|
| Cash | 13.1 | 16.4 | 14.3 | 12.9 | 10.0 | -22.2% |
| 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 | 0.3 | 0.3 | 0.4 | 0.4 | 0.5 | 5.5% |
Ratios
|
|---|
| Revenue growth | 4.1% | 11.1% | -8.6% | -17.1% | -9.2% | |
| EBITDA growth | -229.4% | 125.4% | -108.0% | 1,469.1% | 51.3% | |
|
|---|
| Gross Margin | 17.2% | 19.2% | 16.2% | 22.4% | 21.1% | -1.3% |
| EBITDA Margin | 3.2% | 6.6% | -0.6% | -10.9% | -18.1% | -7.2% |
| SG&A, % of revenue | 12.9% | 11.6% | 14.5% | 26.0% | 23.3% | -2.7% |
| Net Income Margin | 2.4% | 5.7% | -1.1% | -11.2% | -18.7% | -7.5% |
| CAPEX, % of revenue | 0.3% | 0.3% | 0.4% | 0.5% | 0.6% | 0.1% |
|
|---|
| ROIC | 9.3% | 19.7% | -3.1% | -27.0% | -55.9% | -28.8% |
| ROE | 8.8% | 18.6% | -2.8% | -26.1% | -55.2% | -29.2% |
| Net Debt/EBITDA | -4.2x | -2.3x | | | |
BSQUARE Corporation ($BSQR) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 21 | 19 | 17 | 17 | | -9.5% | 1.9% | -15.1% | -13.5% |
| EBITDA | -2 | -4 | -2 | -5 | | -1,304.6% | | | |
| Net Income | -2 | -4 | -2 | -6 | | -1,305.0% | | | |
Balance Sheet
|
|---|
| Cash | 11 | 10 | 11 | 10 | | 10.2% | 8.1% | -13.2% | -22.2% |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 25.1% | 17.0% | 20.1% | 21.9% | | -2.2% | -3.6% | -2.2% | 3.3% |
| EBITDA Margin | -11.3% | -18.5% | -11.8% | -32.2% | | -12.2% | -5.5% | 0.3% | -11.0% |
| Net Income Margin | -11.8% | -19.2% | -12.5% | -32.9% | | -12.7% | -5.6% | 0.1% | -11.1% |
Peers in Application Software
Below we provide BSQUARE Corporation 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| BSQUARE Corporation ($BSQR) | | 11.1% | -8.6% | -17.1% | -9.2% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.1% |
|---|
| BSQUARE Corporation ($BSQR) | 17.2% | 19.2% | 16.2% | 22.4% | 21.1% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -3.3% | -3.2% |
|---|
| BSQUARE Corporation ($BSQR) | 3.2% | 6.6% | -0.6% | -10.9% | -18.1% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| BSQUARE Corporation ($BSQR) | 0.3% | 0.3% | 0.4% | 0.5% | 0.6% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.8% | -10.2% | -9.3% |
|---|
| BSQUARE Corporation ($BSQR) | 9.3% | 19.7% | -3.1% | -27.0% | -55.9% |
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 |
|---|
