Perficient, Inc. reports 15.7% EBITDA growth in 2018 and 2.7% Revenue growth
02/26/2019 • About Perficient, Inc. (
$PRFT) • By InTwits
Perficient, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Perficient, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.1%. At the same time it's in pair with industry average of 3.6%
- CAPEX is quite volatile: $28m in 2018, $18m in 2017, $21m in 2016, $10m in 2015, $13m in 2014
- The company has business model with low profitability: ROIC is 8.0%
- It operates with medium-size leverage: Net Debt/EBITDA is 1.3x while industry average is -0.4x
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 2.7%. Revenue growth showed slowdown in 18Q4 - it was -1.3% YoY. During the last 5 years Revenue growth bottomed in 2017 at -0.35%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased slightly on 1.3 pp from 10.0% to 11.3% in 2018. During 2014-2018 EBITDA Margin bottomed in 2017 at 10.0%.
Gross Margin increased on 2.5 pp from 33.3% to 35.8% in 2018. SG&A as a % of Revenue increased slightly on 1.5 pp from 22.3% to 23.8% in 2018.
Net Income margin increased slightly on 1.1 pp from 3.8% to 4.9% in 2018. During the last 5 years Net Income margin bottomed in 2017 at 3.8%.
Investments (CAPEX, working capital and M&A)
Perficient, Inc.'s CAPEX/Revenue was 0.93% in 2018. CAPEX/Revenue showed almost no change from 2015 to 2018. It's average level of CAPEX/Revenue for the last three years was 1.0%.
Return on investment
The company operates at low ROIC (8.0%) and ROE (6.8%). ROIC increased slightly on 0.90 pp from 7.1% to 8.0% in 2018. ROE increased slightly on 1.7 pp from 5.1% to 6.8% in 2018. During 2014-2018 ROIC bottomed in 2017 at 7.1%. During 2014-2018 ROE bottomed in 2017 at 5.1%.
Leverage (Debt)
Debt level is 1.3x Net Debt / EBITDA and 2.1x Debt / EBITDA. Net Debt / EBITDA surged on 0.3x from 1.0x to 1.3x in 2018. Debt jumped on 118% while cash surged on 613%.
The company has no short term refinancing risk: short term debt is zero.
Valuation and dividends
Perficient, Inc.'s trades at EV/EBITDA 17.9x and P/E 38.0x.
Management team
Jeffrey S Davis is a the company's CEO. Jeffrey S Davis is a founder and has spent 2 years with the company. Paul E Martin is a Perficient, Inc.'s CFO. Paul E Martin has spent 13 years at the company.
Financial and operational results
FY ended 12/31/2018
Perficient, Inc. ($PRFT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 456.7 | 473.6 | 487.0 | 485.3 | 498.4 | 2.7% |
| Gross Profit | 149.3 | 155.2 | 151.3 | 161.5 | 178.5 | 10.5% |
| SG&A | 90.2 | 100.0 | | 108.2 | 118.5 | 9.5% |
| EBITDA | 57.2 | 53.6 | 51.7 | 48.7 | 56.4 | 15.7% |
| Net Income | 23.2 | 23.0 | 21.7 | 18.6 | 24.6 | 32.2% |
Balance Sheet
|
|---|
| Cash | 10.9 | 8.8 | 10.1 | 6.3 | 45.0 | 613.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 54.0 | 56.0 | 32.0 | 55.0 | 120.1 | 118.3% |
Cash flow
|
|---|
| Capex | 7.1 | 4.4 | 6.1 | 4.3 | 4.6 | 7.5% |
Ratios
|
|---|
| Revenue growth | 22.3% | 3.7% | 2.8% | -0.4% | 2.7% | |
| EBITDA growth | 33.2% | -6.3% | -3.5% | -5.8% | 15.7% | |
|
|---|
| Gross Margin | 32.7% | 32.8% | 31.1% | 33.3% | 35.8% | 2.5% |
| EBITDA Margin | 12.5% | 11.3% | 10.6% | 10.0% | 11.3% | 1.3% |
| SG&A, % of revenue | 19.8% | 21.1% | | 22.3% | 23.8% | 1.5% |
| Net Income Margin | 5.1% | 4.9% | 4.5% | 3.8% | 4.9% | 1.1% |
| CAPEX, % of revenue | 1.6% | 0.9% | 1.2% | 0.9% | 0.9% | 0.0% |
|
|---|
| ROIC | 12.2% | 9.2% | 8.4% | 7.1% | 8.0% | 0.9% |
| ROE | 8.2% | 7.0% | 6.1% | 5.1% | 6.8% | 1.7% |
| Net Debt/EBITDA | 0.8x | 0.9x | 0.4x | 1.0x | 1.3x | 0.3x |
Perficient, Inc. ($PRFT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 121 | 122 | 124 | 132 | | 8.9% | 4.1% | 0.2% | -1.3% |
| EBITDA | 12 | 14 | 14 | 17 | | 20.2% | 5.3% | -10.9% | 67.4% |
| Net Income | 5 | 6 | 6 | 7 | | 81.9% | 142.8% | -10.3% | 16.2% |
Balance Sheet
|
|---|
| Cash | 5 | 10 | 45 | 45 | | -49.6% | 82.0% | 1,736.1% | 613.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 56 | 56 | 119 | 120 | | 45.5% | -17.6% | 83.1% | 118.3% |
Ratios
|
|---|
| Gross Margin | 34.5% | 34.6% | 36.1% | 37.9% | | 2.0% | 1.0% | 1.7% | 5.3% |
| EBITDA Margin | 9.7% | 11.2% | 11.5% | 12.7% | | 0.9% | 0.1% | -1.4% | 5.2% |
| Net Income Margin | 4.1% | 4.8% | 5.1% | 5.7% | | 1.6% | 2.7% | -0.6% | 0.9% |
Peers in IT Consulting & Other Services
Below we provide Perficient, Inc. benchmarking against other companies in IT Consulting & Other Services 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 |
|---|
| Gopher Protocol Inc ($GOPH) | | -25.0% | 83.3% | 5,471.1% | 461.0% |
| CLPS Incorporation ($CLPS) | | | | 8.1% | 56.0% |
| EPAM Systems, Inc. ($EPAM) | | 25.2% | 26.9% | 25.0% | 27.1% |
| Gartner, Inc. ($IT) | | 7.0% | 13.0% | 35.5% | 20.1% |
| Computer Task Group, Incorporated ($CTG) | | -6.0% | -12.1% | -7.3% | 19.1% |
| |
|---|
| Median (35 companies) | | 3.3% | 8.3% | 4.0% | 3.9% |
|---|
| Perficient, Inc. ($PRFT) | | 3.7% | 2.8% | -0.4% | 2.7% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Inpixon ($INPX) | 29.8% | 28.9% | 28.1% | 68.7% | 71.4% |
| Gartner, Inc. ($IT) | 60.5% | 61.2% | 61.3% | 60.1% | 63.1% |
| InterXion Holding N.V. ($INXN) | 59.2% | 60.8% | 61.5% | 61.1% | 60.9% |
| LiveRamp Holdings, Inc. ($RAMP) | 25.1% | 38.6% | 42.5% | 45.7% | 56.2% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 50.4% | 50.8% | 52.3% | 53.6% | 53.5% |
| |
|---|
| Median (37 companies) | 25.8% | 30.9% | 28.1% | 27.7% | 28.9% |
|---|
| Perficient, Inc. ($PRFT) | 32.7% | 32.8% | 31.1% | 33.3% | 35.8% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 41.3% | 44.9% | 43.3% | 42.2% | 42.8% |
| Switch, Inc. ($SWCH) | | 50.7% | 37.0% | 28.5% | 39.8% |
| Cognizant Technology Solutions Corporation ($CTSH) | 20.4% | 19.9% | 19.8% | 19.7% | 20.5% |
| Taoping Inc. ($TAOP) | -54.0% | -237.5% | -117.7% | 13.2% | 18.7% |
| DXC Technology Company ($DXC) | | | | 8.0% | 16.3% |
| |
|---|
| Median (36 companies) | 4.8% | 3.3% | 6.7% | 6.3% | 7.2% |
|---|
| Perficient, Inc. ($PRFT) | 12.5% | 11.3% | 10.6% | 10.0% | 11.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterXion Holding N.V. ($INXN) | 62.5% | 48.1% | 57.4% | 50.5% | 78.3% |
| Switch, Inc. ($SWCH) | | 71.5% | 90.2% | 106.4% | 67.9% |
| Taoping Inc. ($TAOP) | 1.4% | 29.2% | 34.0% | 20.8% | 8.7% |
| Teradata Corporation ($TDC) | 2.0% | 2.1% | 2.3% | 3.6% | 7.1% |
| ServiceSource International, Inc. ($SREV) | 3.4% | 4.7% | 10.4% | 7.2% | 6.5% |
| |
|---|
| Median (35 companies) | 0.9% | 0.8% | 1.1% | 1.4% | 1.5% |
|---|
| Perficient, Inc. ($PRFT) | 1.6% | 0.9% | 1.2% | 0.9% | 0.9% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Accenture plc ($ACN) | 80.5% | 81.0% | 81.3% | 61.7% | 66.1% |
| The Hackett Group, Inc. ($HCKT) | 11.2% | 19.5% | 31.7% | 23.8% | 24.6% |
| Cognizant Technology Solutions Corporation ($CTSH) | 24.7% | 22.0% | 21.3% | 21.9% | 23.8% |
| Booz Allen Hamilton Holding Corporation ($BAH) | 25.3% | 26.5% | 23.1% | 22.6% | 22.5% |
| EPAM Systems, Inc. ($EPAM) | 19.7% | 18.4% | 18.2% | 18.9% | 21.2% |
| |
|---|
| Median (44 companies) | 6.2% | 4.7% | 7.3% | 4.7% | 6.9% |
|---|
| Perficient, Inc. ($PRFT) | 12.2% | 9.2% | 8.4% | 7.1% | 8.0% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Infinite Group Inc ($IMCI) | | | 169.6x | | 10.5x |
| InterXion Holding N.V. ($INXN) | 3.3x | 2.9x | 3.4x | 3.8x | 4.6x |
| Gartner, Inc. ($IT) | 0.1x | 1.3x | 0.6x | 11.7x | 4.1x |
| Switch, Inc. ($SWCH) | | 2.2x | 4.0x | 3.2x | 3.3x |
| Presidio, Inc. ($PSDO) | 0.0x | | 5.6x | 3.6x | 3.1x |
| |
|---|
| Median (28 companies) | -0.2x | -0.3x | 0.0x | 0.4x | 0.4x |
|---|
| Perficient, Inc. ($PRFT) | 0.8x | 0.9x | 0.4x | 1.0x | 1.3x |
