Benefitfocus, Inc. revenue growth accelerated from 1.5% in 2017 to 9.2% in 2018
02/26/2019 • About Benefitfocus, Inc. (
$BNFT) • By InTwits
Benefitfocus, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Benefitfocus, Inc. is a fast growth stock: 2018 revenue growth was 9.2%, 5 year revenue CAGR was 19.8% at 2018 ROIC -23.7%
- The company operates at negative EBITDA Margin: -9.2%
- Benefitfocus, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -14.9% for the sames years
- Benefitfocus, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.4%. At the same time it's a lot of higher than industry average of 5.2%.
- CAPEX is quite volatile: $13m in 2018, $17m in 2017, $7m in 2016, $10m in 2015, $14m in 2014
- The company has unprofitable business model: ROIC is -23.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue increased on 9.2%. Revenue growth showed acceleration in 18Q4 - it increased 10.2% YoY. EBITDA Margin showed almost no change in 2018. EBITDA Margin grew at 6.7 pp per annum in 2014-2018.
Gross Margin increased on 3.8 pp from 46.2% to 50.0% in 2018. Gross Margin followed a growing trend at 2.9 pp per annum in 2014-2018. SG&A as a % of Revenue increased on 5.5 pp from 41.3% to 46.9% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2016 at 37.8% and was growing since that time.
Net Income margin increased slightly on 0.89 pp from -21.2% to -20.3% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 Benefitfocus, Inc. had CAPEX/Revenue of 3.2%. The company showed decline in CAPEX/Revenue of 4.8 pp from 8.0% in 2015 to 3.2% in 2018. It's average CAPEX/Revenue for the last three years was 4.0%. CAPEX as a % of Revenue stuck to a declining trend at -1.2 pp per annum in the last 5 years.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.5x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2018. Debt surged on 107% while cash surged on 245%.
Benefitfocus, Inc. has no short term refinancing risk: cash is higher than short term debt (4,256.1%).
Management team
The company's CEO is Raymond A August "Ray". Raymond A August "Ray" is a founder and has 1 year tenure with the company.
Financial and operational results
FY ended 12/31/2018
Benefitfocus, Inc. ($BNFT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 137.4 | 185.1 | 233.3 | 236.8 | 258.7 | 9.2% |
| Gross Profit | 50.0 | 82.3 | 112.7 | 109.5 | 129.4 | 18.3% |
| SG&A | 67.1 | 84.3 | 88.2 | 97.9 | 121.2 | 23.9% |
| EBITDA | -49.4 | -42.6 | -19.1 | -22.0 | -23.9 | |
| Net Income | -63.2 | -62.1 | -40.1 | -50.3 | -52.6 | |
Balance Sheet
|
|---|
| Cash | 51.1 | 48.1 | 56.9 | 55.3 | 190.9 | 245.0% |
| Short Term Debt | 4.2 | 28.6 | 22.6 | 27.4 | 4.5 | -83.6% |
| Long Term Debt | 49.9 | 36.4 | 78.2 | 87.8 | 233.8 | 166.2% |
Cash flow
|
|---|
| Capex | 9.8 | 14.7 | 12.7 | 8.3 | 8.3 | 0.1% |
Ratios
|
|---|
| Revenue growth | 31.2% | 34.7% | 26.0% | 1.5% | 9.2% | |
| EBITDA growth | 146.8% | -13.8% | -55.2% | 15.4% | 8.4% | |
|
|---|
| Gross Margin | 36.3% | 44.4% | 48.3% | 46.2% | 50.0% | 3.8% |
| EBITDA Margin | -36.0% | -23.0% | -8.2% | -9.3% | -9.2% | 0.1% |
| SG&A, % of revenue | 48.8% | 45.5% | 37.8% | 41.3% | 46.9% | 5.5% |
| Net Income Margin | -46.0% | -33.5% | -17.2% | -21.2% | -20.3% | 0.9% |
| CAPEX, % of revenue | 7.1% | 8.0% | 5.4% | 3.5% | 3.2% | -0.3% |
|
|---|
| ROIC | -250.5% | -185.9% | -55.8% | -43.3% | -23.7% | 19.6% |
Benefitfocus, Inc. ($BNFT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 62 | 61 | 61 | 75 | | 8.2% | 10.0% | 8.5% | 10.2% |
| EBITDA | -7 | -7 | -4 | -6 | | | | | -1,449.2% |
| Net Income | -14 | -14 | -12 | -13 | | | | | |
Balance Sheet
|
|---|
| Cash | 55 | 53 | 51 | 191 | | -5.0% | -10.3% | -6.4% | 245.0% |
| Short Term Debt | 28 | 32 | 34 | 4 | | 61.6% | 39.4% | 8.7% | -83.6% |
| Long Term Debt | 95 | 96 | 96 | 234 | | 3.9% | 8.0% | 8.5% | 166.2% |
Ratios
|
|---|
| Gross Margin | 49.6% | 49.3% | 48.0% | 52.6% | | 5.5% | 3.2% | 3.6% | 3.0% |
| EBITDA Margin | -10.8% | -11.6% | -7.2% | -7.7% | | 4.0% | 0.9% | 5.3% | -8.3% |
| Net Income Margin | -22.1% | -23.5% | -19.0% | -17.3% | | 4.9% | 1.6% | 5.9% | -7.2% |
Peers in Application Software
Below we provide Benefitfocus, 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 13.5% | 13.6% | 15.7% | 15.2% |
|---|
| Benefitfocus, Inc. ($BNFT) | | 34.7% | 26.0% | 1.5% | 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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.1% |
|---|
| Benefitfocus, Inc. ($BNFT) | 36.3% | 44.4% | 48.3% | 46.2% | 50.0% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.2% |
|---|
| Benefitfocus, Inc. ($BNFT) | -36.0% | -23.0% | -8.2% | -9.3% | -9.2% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Benefitfocus, Inc. ($BNFT) | 7.1% | 8.0% | 5.4% | 3.5% | 3.2% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.2% | -11.2% | -9.2% | -10.2% | -9.3% |
|---|
| Benefitfocus, Inc. ($BNFT) | -250.5% | -185.9% | -55.8% | -43.3% | -23.7% |
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 (70 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
