MIND C.T.I. Ltd. reports 13.4% EBITDA growth in 2018 and almost no change in Revenue of 18.1
03/04/2019 • About MIND C.T.I. Ltd. (
$MNDO) • By InTwits
MIND C.T.I. Ltd. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- MIND C.T.I. Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.5%.
- The company has highly profitable business model: ROIC is 25.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
MIND C.T.I. Ltd.'s Revenue showed almost no change in 2018. Revenue growth showed slowdown in 18Q4 - it was -0.8% YoY. During the last 5 years Revenue growth bottomed in 2015 at -16.4% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.4 pp from 26.5% to 30.0% in 2018.
Gross Margin increased on 5.0 pp from 61.1% to 66.1% in 2018. SG&A as a % of Revenue showed almost no change in 2018. SG&A as a % of Revenue stuck to a growing trend at 0.95 pp per annum in 2014-2018.
Net Income margin decreased on 2.8 pp from 31.1% to 28.3% in 2018.
Investments (CAPEX, working capital and M&A)
MIND C.T.I. Ltd.'s CAPEX/Revenue was 0.25% in 2018. MIND C.T.I. Ltd.'s CAPEX/Revenue showed almost no change from 2015 to 2018. Average CAPEX/Revenue for the last three years was 0.34%. CAPEX as a % of Revenue stuck to a declining trend at -0.14 pp per annum in 2014-2018.
Return on investment
The company operates at high and attractive ROIC (25.5%) and ROE (24.4%). ROIC increased on 3.3 pp from 22.2% to 25.5% in 2018. ROE decreased on 2.1 pp from 26.5% to 24.4% in 2018. During the last 5 years ROIC bottomed in 2017 at 22.2%.
Leverage (Debt)
The company has no debt. Cash dropped on 45.4%.
Valuation and dividends
MIND C.T.I. Ltd.'s trades at EV/EBITDA 7.8x and P/E 8.8x.
Financial and operational results
FY ended 12/31/2018
MIND C.T.I. Ltd. ($MNDO) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 25.020 | 20.928 | 18.052 | 18.062 | 18.135 | 0.4% |
| Gross Profit | 15.070 | 12.298 | 11.221 | 11.029 | 11.989 | 8.7% |
| SG&A | 3.074 | 2.939 | 2.498 | 2.926 | 2.892 | -1.2% |
| EBITDA | 7.690 | 6.589 | 5.367 | 4.790 | 5.434 | 13.4% |
| Net Income | 5.483 | 5.018 | 4.203 | 5.612 | 5.134 | -8.5% |
Balance Sheet
|
|---|
| Cash | 8.100 | 11.475 | 9.165 | 5.014 | 2.739 | -45.4% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.201 | 0.146 | 0.068 | 0.071 | 0.046 | -35.2% |
Ratios
|
|---|
| Revenue growth | 35.4% | -16.4% | -13.7% | 0.1% | 0.4% | |
| EBITDA growth | 219.2% | -14.3% | -18.5% | -10.8% | 13.4% | |
|
|---|
| Gross Margin | 60.2% | 58.8% | 62.2% | 61.1% | 66.1% | 5.0% |
| EBITDA Margin | 30.7% | 31.5% | 29.7% | 26.5% | 30.0% | 3.4% |
| SG&A, % of revenue | 12.3% | 14.0% | 13.8% | 16.2% | 15.9% | -0.3% |
| Net Income Margin | 21.9% | 24.0% | 23.3% | 31.1% | 28.3% | -2.8% |
| CAPEX, % of revenue | 0.8% | 0.7% | 0.4% | 0.4% | 0.3% | -0.1% |
|
|---|
| ROIC | 34.4% | 28.8% | 24.0% | 22.2% | 25.5% | 3.3% |
| ROE | 25.3% | 22.7% | 19.5% | 26.5% | 24.4% | -2.1% |
| Net Debt/EBITDA | -1.1x | -1.7x | -1.7x | -1.0x | -0.5x | 0.5x |
MIND C.T.I. Ltd. ($MNDO) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 5 | 5 | 5 | 4 | | 2.0% | -0.1% | -0.4% | -0.8% |
| EBITDA | 1 | 1 | 1 | 1 | | 31.8% | 5.8% | | 29.5% |
| Net Income | 1 | 1 | 1 | 1 | | 27.3% | -38.4% | 14.3% | -8.5% |
Balance Sheet
|
|---|
| Cash | 4 | 4 | 2 | 3 | | -43.0% | -31.7% | | -45.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 61.3% | 66.3% | 65.8% | 71.1% | | 6.9% | 5.5% | | 11.2% |
| EBITDA Margin | 28.2% | 28.9% | 29.3% | 33.5% | | 6.4% | 1.6% | 29.3% | 7.8% |
| Net Income Margin | 25.6% | 25.5% | 30.0% | 32.3% | | 5.1% | -15.9% | 3.9% | -2.7% |
Peers in Application Software
Below you can find MIND C.T.I. Ltd. 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 14.3% | 15.7% | 15.2% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | | -16.4% | -13.7% | 0.1% | 0.4% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 65.7% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 60.2% | 58.8% | 62.2% | 61.1% | 66.1% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 30.7% | 31.5% | 29.7% | 26.5% | 30.0% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 0.8% | 0.7% | 0.4% | 0.4% | 0.3% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.8% | -11.8% | -10.4% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 34.4% | 28.8% | 24.0% | 22.2% | 25.5% |
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. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.4x | -0.9x | -0.9x | -0.8x | -0.7x |
|---|
| MIND C.T.I. Ltd. ($MNDO) | -1.1x | -1.7x | -1.7x | -1.0x | -0.5x |
