Ebix, Inc. Debt jumped on 79.8% and EBITDA surged on 32.1%
03/01/2019 • About Ebix, Inc. (
$EBIX) • By InTwits
Ebix, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Ebix, Inc. is a fast growth stock: 2018 revenue growth was 36.8%, 5 year revenue CAGR was 19.5% at 2018 ROIC 13.9%
- Ebix, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.8%. At the same time it's in pair with industry average of 3.1%
- CAPEX is quite volatile: $10m in 2018, $7m in 2017, $6m in 2016, $14m in 2015, $16m in 2014
- The company has highly profitable business model: ROIC is 13.9%
- It operates with medium-size leverage: Net Debt/EBITDA is 3.6x 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
Ebix, Inc.'s Revenue jumped on 36.8%. Revenue growth showed slowdown in 18Q4 - it was 30.2% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.9 pp from 18.2% to 22.1% in 2018. EBITDA Margin stuck to a declining trend at -2.1 pp per annum in the last 5 years.
Gross Margin increased slightly on 1.7 pp from 64.4% to 66.2% in 2018. Gross Margin declined at -3.2 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 4.4 pp from 21.0% to 25.3% in 2018. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018.
Net Income margin decreased on 8.9 pp from 27.6% to 18.7% in 2018. During the last 5 years Net Income margin topped in 2016 at 31.5% and was declining since that time. The efficient tax rate was 25.9% in 2018 while the average for the last five years was 11.5%.
Investments (CAPEX, working capital and M&A)
In 2018 Ebix, Inc. had CAPEX/Revenue of 2.1%. The company showed decline in CAPEX/Revenue of 3.2 pp from 5.3% in 2015 to 2.1% in 2018. Average CAPEX/Revenue for the last three years was 2.0%. CAPEX as a % of Revenue stuck to a declining trend at -1.4 pp per annum in 2014-2018.
Accounts receivable as a % of Revenue increased on 2.6 pp from 32.4% to 35.0% in 2018.
Ebix, Inc. has spent
$4m on M&A in 2018 which accounts for 0.77% of revenue.
Return on investment
The company operates at good ROIC (13.9%) and ROE (19.2%). ROIC showed almost no change in 2018. ROE decreased on 2.7 pp from 21.9% to 19.2% in 2018. During the last 5 years ROE topped in 2016 at 22.5% and was declining since that time.
Leverage (Debt)
Debt level is 3.6x Net Debt / EBITDA and 4.5x Debt / EBITDA. Net Debt / EBITDA surged on 0.8x from 2.8x to 3.6x in 2018. Debt surged on 79.8% while cash surged on 131%. Net Debt/EBITDA grew at 0.7x per annum in 2014-2018.
Ebix, Inc. has no short term refinancing risk: cash is higher than short term debt (405.6%).
Valuation and dividends
Ebix, Inc.'s trades at EV/EBITDA 12.8x and P/E 16.2x.
The company paid 9.7% of Net Income as dividends in 2018. Dividends grew on average at -3.9% per annum in the last 5 years).
Management team
Ebix, Inc.'s CEO is Robin Raina. Robin Raina is a founder and has 15 years tenure with the company. CEO total compensation was
$4,409,751 in 2018 which included
$2,400,000 salary and
$2,000,000 annual bonus. The company's CFO is Sean T Donaghy. Sean T Donaghy has 2 years tenure at the company.
14.0% of the company is owned by insiders. Insider ownership didn't change in 2018.
At the end of financial year the company had 9,263 employees. The number of employees surged on 105%. Average revenue per employee in 2018 was
$53,743 and it dropped on 33.3%.
Financial and operational results
FY ended 12/31/2018
Ebix, Inc. ($EBIX) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 214.3 | 265.5 | 298.3 | 364.0 | 497.8 | 36.8% |
| Gross Profit | 166.9 | 193.0 | 213.2 | 234.5 | 329.4 | 40.5% |
| SG&A | 50.7 | 63.0 | 69.2 | 76.3 | 126.1 | 65.3% |
| EBITDA | 89.4 | 99.3 | 112.1 | 124.3 | 164.3 | 32.1% |
| EBIT | 79.7 | 88.7 | 100.3 | 113.2 | 153.0 | 35.1% |
| Interest expence | 3.0 | | | | | |
| Tax | 13.9 | 7.1 | 1.6 | 0.8 | 32.5 | 4,082.9% |
| Net Income | 63.6 | 79.5 | 93.8 | 100.6 | 93.1 | -7.4% |
| Stock Based Compensation | 1.8 | 1.8 | 2.8 | 2.8 | 2.8 | -0.2% |
Balance Sheet
|
|---|
| Cash | 52.3 | 57.2 | 114.1 | 63.9 | 147.8 | 131.3% |
| Accounts Receivable | 41.1 | 47.2 | 62.7 | 117.8 | 174.3 | 47.9% |
| Short Term Debt | 0.9 | 0.6 | 12.4 | 23.6 | 36.4 | 54.2% |
| Long Term Debt | 121.1 | 206.5 | 259.9 | 385.5 | 699.3 | 81.4% |
Cash flow
|
|---|
| Capex | 16.3 | 14.0 | 6.0 | 7.4 | 10.4 | 40.4% |
| Dividends | 11.0 | 10.0 | 10.0 | 10.0 | 9.0 | -10.0% |
| Acquisitions | 0.6 | 12.5 | | 1.9 | 3.8 | 99.4% |
Ratios
|
|---|
| Revenue growth | 4.7% | 23.9% | 12.4% | 22.0% | 36.8% | |
| EBITDA growth | 5.0% | 11.2% | 12.9% | 10.9% | 32.1% | |
|
|---|
| Gross Margin | 77.9% | 72.7% | 71.5% | 64.4% | 66.2% | 1.7% |
| EBITDA Margin | 41.7% | 37.4% | 37.6% | 34.2% | 33.0% | -1.2% |
| EBIT Margin | 37.2% | 33.4% | 33.6% | 31.1% | 30.7% | -0.4% |
| SG&A, % of revenue | 23.7% | 23.7% | 23.2% | 21.0% | 25.3% | 4.4% |
| SBC, % of revenue | 0.8% | 0.7% | 0.9% | 0.8% | 0.6% | -0.2% |
| Net Income Margin | 29.7% | 30.0% | 31.5% | 27.6% | 18.7% | -8.9% |
| CAPEX, % of revenue | 7.6% | 5.3% | 2.0% | 2.0% | 2.1% | 0.1% |
|
|---|
| ROIC | 14.8% | 14.7% | 14.9% | 13.6% | 13.9% | 0.3% |
| ROE | 14.9% | 18.9% | 22.5% | 21.9% | 19.2% | -2.7% |
| Net Debt/EBITDA | 0.8x | 1.5x | 1.4x | 2.8x | 3.6x | 0.8x |
| Interest expence / Average debt | 2.5% | | | | | |
People
|
|---|
| Insider ownership | 14.0% | 14.0% | 14.0% | 14.0% | 14.0% | 0.0% |
| Employees | 2,343 | 2,707 | 2,988 | 4,515 | 9,263 | 105.2% |
| Revenue/Employee, th. $ | 91 | 98 | 100 | 81 | 54 | -33.3% |
Ebix, Inc. ($EBIX) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 108 | 125 | 129 | 136 | | 36.8% | 42.6% | 38.6% | 30.2% |
| EBITDA | 37 | 42 | 41 | 45 | | 28.6% | 39.4% | 36.4% | 25.3% |
| Net Income | 26 | 29 | 29 | 9 | | -0.8% | 24.5% | 20.9% | -68.0% |
Balance Sheet
|
|---|
| Cash | 112 | 113 | 135 | 148 | | -6.9% | 65.7% | 39.5% | 131.3% |
| Short Term Debt | 24 | 18 | 23 | 36 | | 92.2% | 47.3% | 82.9% | 54.2% |
| Long Term Debt | 409 | 592 | 630 | 699 | | 38.0% | 88.6% | 90.5% | 81.4% |
Ratios
|
|---|
| Gross Margin | 63.4% | 65.0% | 66.6% | 69.0% | | -4.7% | 0.4% | 4.3% | 5.7% |
| EBITDA Margin | 33.9% | 33.6% | 31.6% | 33.0% | | -2.2% | -0.8% | -0.5% | -1.3% |
| Net Income Margin | 24.2% | 23.4% | 22.7% | 6.2% | | -9.2% | -3.4% | -3.3% | -19.1% |
Peers in Application Software
Below you can find Ebix, 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 13.5% | 14.3% | 14.8% | 15.2% |
|---|
| Ebix, Inc. ($EBIX) | | 23.9% | 12.4% | 22.0% | 36.8% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 62.8% | 61.7% | 63.8% | 64.6% | 65.7% |
|---|
| Ebix, Inc. ($EBIX) | 77.9% | 72.7% | 71.5% | 64.4% | 66.2% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| Ebix, Inc. ($EBIX) | 41.7% | 37.4% | 37.6% | 34.2% | 33.0% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| Ebix, Inc. ($EBIX) | 7.6% | 5.3% | 2.0% | 2.0% | 2.1% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.8% | -11.8% | -10.4% |
|---|
| Ebix, Inc. ($EBIX) | 14.8% | 14.7% | 14.9% | 13.6% | 13.9% |
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. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.4x | -1.0x | -0.9x | -0.9x | -0.7x |
|---|
| Ebix, Inc. ($EBIX) | 0.8x | 1.5x | 1.4x | 2.8x | 3.6x |
