RealPage, Inc. reports 71.1% EBITDA growth in 2018 and 29.6% Revenue growth
02/25/2019 • About RealPage, Inc. (
$RP) • By InTwits
RealPage, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- RealPage, Inc. is a fast growth stock: 2018 revenue growth was 29.6%, 5 year revenue CAGR was 18.2% at 2018 ROIC 4.7%
- EBITDA Margin is quite volatile: 19.1% in 2018, 14.5% in 2017, 15.2% in 2016, 7.3% in 2015, 6.4% in 2014
- RealPage, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 6.7% while average EBITDA Margin was 13.7% for the sames years
- RealPage, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.6%. At the same time it's in pair with industry average of 13.3%
- CAPEX is quite volatile: $39m in 2018, $27m in 2017, $16m in 2016, $17m in 2015, $18m in 2014
- In the last 5 years the company invested considerably less than D&A: $246m vs. $309m. In 2018 this situation was still the same: CAPEX was 51 while D&A was 100
- The company has potentially unprofitable business model: ROIC is 4.7%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.2x while industry average is -2.2x
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 surged on 29.6%. Revenue growth showed slowdown in 18Q4 - it was 20.9% YoY. Revenue growth was accelerating on average by 4.7 pp per annum in the last 5 years. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 4.6 pp from 14.5% to 19.1% in 2018. EBITDA Margin stuck to a growing trend at 3.3 pp per annum in 2014-2018.
Gross Margin showed almost no change in 2018. Gross Margin grew at 0.33 pp per annum in 2014-2018. SG&A as a % of Revenue decreased on 5.0 pp from 37.8% to 32.8% in 2018. SG&A as a % of Revenue followed a declining trend at -2.7 pp per annum in the last 5 years. Stock Based Compensation (SBC) as a % of Revenue decreased slightly on 1.0 pp from 6.8% to 5.8% in 2018.
Net Income margin increased on 3.9 pp from 0.056% to 4.0% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.9% in 2018. CAPEX/Revenue decreased slightly on 1.3 pp from 7.1% in 2015 to 5.9% in 2018. It's average level of CAPEX/Revenue for the last three years was 8.8%.
Accounts receivable as a % of Revenue decreased on 4.3 pp from 18.6% to 14.2% in 2018. Accounts payable as a % of Revenue decreased on 2.6 pp from 9.5% to 7.0% in 2018.
RealPage, Inc. has spent
$279m on M&A in 2018 which accounts for 32.0% of revenue.
Return on investment
The company operates at low ROIC (4.7%) and ROE (4.4%). ROIC increased slightly on 1.1 pp from 3.6% to 4.7% in 2018. ROE increased on 4.4 pp from 0.085% to 4.4% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 2.2x and Debt / EBITDA is 3.6x. Net Debt / EBITDA dropped on 3.7x from 6.0x to 2.2x in 2018. Debt decreased on 8.0% while cash jumped on 229%.
RealPage, Inc. has no short term refinancing risk: cash is higher than short term debt (1,414.2%).
Valuation and dividends
The company's trades at EV/EBITDA 35.3x and P/E 158.3x.
Management team
Stephen T Winn "Steve" is a the company's CEO. Stephen T Winn "Steve" is a founder and has spent 7 years with the company. CEO total compensation was
$11,046,385 in 2018 which included
$645,833 salary. The company's CFO Thomas C Ernst Jr "Tom" has spent 0 years with the company.
Insider ownership is 2.5%. Insider ownership didn't change in 2018.
At the end of financial year the company had 6,200 employees. The number of employees jumped on 14.8%. Average revenue per employee in 2018 was
$140,239 and it surged on 12.9%.
Financial and operational results
FY ended 12/31/2018
RealPage, Inc. ($RP) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 404.6 | 468.5 | 568.1 | 671.0 | 869.5 | 29.6% |
| Gross Profit | 229.7 | 269.9 | 325.8 | 390.7 | 505.3 | 29.3% |
| SG&A | 180.8 | 191.9 | 220.2 | 253.4 | 284.8 | 12.4% |
| EBITDA | 25.8 | 34.3 | 86.1 | 97.2 | 166.2 | 71.1% |
| EBIT | -15.5 | -11.6 | 31.2 | 30.0 | 66.1 | 120.1% |
| Tax | -6.3 | -3.8 | 10.8 | 14.9 | -0.4 | -102.9% |
| Net Income | -10.3 | -9.2 | 16.7 | 0.4 | 34.7 | 9,110.9% |
| Stock Based Compensation | 34.8 | 37.8 | 30.9 | 45.8 | 50.6 | 10.5% |
Balance Sheet
|
|---|
| Cash | 26.9 | 30.9 | 104.9 | 69.3 | 228.2 | 229.0% |
| Accounts Receivable | 64.8 | 74.2 | 92.4 | 124.5 | 123.6 | -0.7% |
| Accounts Payable | 14.8 | 17.4 | 21.4 | 26.7 | 25.3 | -5.3% |
| Short Term Debt | 0.0 | 0.3 | 5.5 | 14.1 | 16.1 | 14.3% |
| Long Term Debt | 20.0 | 40.0 | 116.7 | 634.5 | 580.4 | -8.5% |
Cash flow
|
|---|
| Capex | 37.1 | 33.4 | 75.2 | 49.8 | 50.9 | 2.4% |
| Acquisitions | 41.9 | 45.3 | 71.4 | 649.9 | 278.6 | -57.1% |
Ratios
|
|---|
| Revenue growth | 7.3% | 15.8% | 21.3% | 18.1% | 29.6% | |
| EBITDA growth | -51.6% | 32.8% | 151.1% | 12.9% | 71.1% | |
|
|---|
| Gross Margin | 56.8% | 57.6% | 57.4% | 58.2% | 58.1% | -0.1% |
| EBITDA Margin | 6.4% | 7.3% | 15.2% | 14.5% | 19.1% | 4.6% |
| EBIT Margin | -3.8% | -2.5% | 5.5% | 4.5% | 7.6% | 3.1% |
| SG&A, % of revenue | 44.7% | 41.0% | 38.8% | 37.8% | 32.8% | -5.0% |
| SBC, % of revenue | 8.6% | 8.1% | 5.4% | 6.8% | 5.8% | -1.0% |
| Net Income Margin | -2.5% | -2.0% | 2.9% | 0.1% | 4.0% | 3.9% |
| CAPEX, % of revenue | 9.2% | 7.1% | 13.2% | 7.4% | 5.9% | -1.6% |
|
|---|
| ROIC | -4.9% | -3.2% | 7.1% | 3.6% | 4.7% | 1.1% |
| ROE | -3.2% | -2.8% | 4.7% | 0.1% | 4.4% | 4.4% |
| Net Debt/EBITDA | -0.3x | 0.3x | 0.2x | 6.0x | 2.2x | -3.7x |
People
|
|---|
| Insider ownership | 2.5% | 2.5% | 2.5% | 2.5% | 2.5% | 0.0% |
| Employees | 3,875 | 4,100 | 4,400 | 5,400 | 6,200 | 14.8% |
| Revenue/Employee, th. $ | 104 | 114 | 129 | 124 | 140 | 12.9% |
RealPage, Inc. ($RP) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 201 | 216 | 225 | 227 | | 31.6% | 34.1% | 33.1% | 20.9% |
| EBITDA | 42 | 42 | 44 | 39 | | 69.3% | 100.1% | 115.4% | 23.8% |
| Net Income | 11 | 8 | 9 | 6 | | 33.0% | 36.5% | 32.8% | |
Balance Sheet
|
|---|
| Cash | 102 | 373 | 280 | 228 | | 70.8% | 15.0% | 156.0% | 229.0% |
| Short Term Debt | 16 | 303 | 306 | 16 | | 416.3% | 7,806.1% | 6,552.2% | 14.3% |
| Long Term Debt | 633 | 295 | 292 | 580 | | 437.9% | -24.6% | -25.8% | -8.5% |
Ratios
|
|---|
| Gross Margin | 59.7% | 60.4% | 58.0% | 57.0% | | 0.9% | 2.2% | 0.2% | -2.2% |
| EBITDA Margin | 20.6% | 19.4% | 19.6% | 17.0% | | 4.6% | 6.4% | 7.5% | 0.4% |
| Net Income Margin | 5.4% | 3.9% | 4.0% | 2.8% | | 0.1% | 0.1% | -0.0% | 13.9% |
Peers in Application Software
Below you can find RealPage, 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 13.5% | 13.6% | 14.8% | 15.2% |
|---|
| RealPage, Inc. ($RP) | | 15.8% | 21.3% | 18.1% | 29.6% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.1% |
|---|
| RealPage, Inc. ($RP) | 56.8% | 57.6% | 57.4% | 58.2% | 58.1% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| RealPage, Inc. ($RP) | 6.4% | 7.3% | 15.2% | 14.5% | 19.1% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| RealPage, Inc. ($RP) | 9.2% | 7.1% | 13.2% | 7.4% | 5.9% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.8% | -11.8% | -10.4% |
|---|
| RealPage, Inc. ($RP) | -4.9% | -3.2% | 7.1% | 3.6% | 4.7% |
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. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.4x | -1.0x | -0.9x | -0.9x | -0.7x |
|---|
| RealPage, Inc. ($RP) | -0.3x | 0.3x | 0.2x | 6.0x | 2.2x |
