Crexendo Inc revenue growth accelerated from 11.7% in 2017 to 16.9% in 2018
03/05/2019 • About Crexendo Inc (
$CXDO) • By InTwits
Crexendo Inc reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- The company operates at negative EBITDA Margin: -1.0%
- Crexendo Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -29.7% for the sames years
- Crexendo Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.1%.
- The company has unprofitable business model: ROIC is -10.5%
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 16.9%. Revenue growth showed slowdown in 18Q4 - it was 10.1% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 3.8 pp from -10.4% to -6.6% in 2018. EBITDA Margin followed a growing trend at 20.7 pp per annum in 2014-2018.
Gross Margin showed almost no change in 2018. Gross Margin grew at 4.4 pp per annum in the last 5 years. SG&A as a % of Revenue decreased on 4.8 pp from 67.8% to 62.9% in 2018. SG&A as a % of Revenue followed a declining trend at -15.0 pp per annum in 2014-2018.
Net Income margin increased on 7.2 pp from -9.1% to -1.9% in 2018. Net Income margin followed a growing trend at 21.3 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 0.059%. The company's CAPEX/Revenue showed almost no change from 2015 to 2018.
Return on investment
The company operates at negative ROIC (-10.5%) and ROE (-12.3%). ROIC surged on 33.8 pp from -44.3% to -10.5% in 2018. ROE surged on 74.3 pp from -86.6% to -12.3% in 2018. ROIC grew at 28.8 pp per annum in the last 5 years. During 2014-2018 ROE bottomed in 2016 at -205% and was growing since that time.
Leverage (Debt)
Debt level is -1.6x Net Debt / EBITDA and Debt / EBITDA. Debt jumped on 153% while cash surged on 44.2%.
Crexendo Inc has no short term refinancing risk: cash is higher than short term debt (2,201.2%).
Management team
Steven G Mihaylo is a the company's CEO. Steven G Mihaylo is a founder and has spent 10 years with the company. Crexendo Inc's CFO is Ronald Vincent "Ron". Ronald Vincent "Ron" has 7 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
Crexendo Inc ($CXDO) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 7.594 | 7.823 | 9.119 | 10.187 | 11.908 | 16.9% |
| Gross Profit | 4.012 | 4.246 | 5.494 | 6.921 | 8.089 | 16.9% |
| SG&A | 9.007 | 8.306 | 7.431 | 6.905 | 7.494 | 8.5% |
| EBITDA | -5.936 | -4.569 | -2.617 | -0.628 | -0.114 | |
| Net Income | -6.376 | -4.541 | -2.792 | -0.929 | -0.223 | |
Balance Sheet
|
|---|
| Cash | 2.906 | 1.497 | 0.619 | 1.282 | 1.849 | 44.2% |
| Short Term Debt | 0.000 | 0.057 | 0.066 | 0.069 | 0.084 | 21.7% |
| Long Term Debt | 0.000 | 0.965 | 0.966 | 0.010 | 0.116 | 1,060.0% |
Cash flow
|
|---|
| Capex | 0.008 | 0.025 | 0.000 | 0.000 | 0.007 | |
Ratios
|
|---|
| Revenue growth | -26.5% | 3.0% | 16.6% | 11.7% | 16.9% | |
| EBITDA growth | 29.0% | -23.0% | -42.7% | -76.0% | -81.8% | |
|
|---|
| Gross Margin | 52.8% | 54.3% | 60.2% | 67.9% | 67.9% | -0.0% |
| EBITDA Margin | -78.2% | -58.4% | -28.7% | -6.2% | -1.0% | 5.2% |
| SG&A, % of revenue | 118.6% | 106.2% | 81.5% | 67.8% | 62.9% | -4.8% |
| Net Income Margin | -84.0% | -58.0% | -30.6% | -9.1% | -1.9% | 7.2% |
| CAPEX, % of revenue | 0.1% | 0.3% | 0.0% | 0.0% | 0.1% | |
|
|---|
| ROIC | -114.9% | -123.1% | -114.0% | -44.3% | -10.5% | 33.8% |
| ROE | -113.4% | -134.6% | -205.4% | -86.6% | -12.3% | 74.3% |
Crexendo Inc ($CXDO) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 3 | 3 | 3 | 3 | | 22.4% | 22.2% | 14.4% | 10.1% |
| EBITDA | -0 | 0 | -0 | 0 | | | | | -43.5% |
| Net Income | -0 | 0 | -0 | -0 | | | | | -125.0% |
Balance Sheet
|
|---|
| Cash | 1 | 1 | 2 | 2 | | 15.4% | 44.2% | 48.8% | 44.2% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -48.4% | 11.0% | -24.5% | 21.7% |
| Long Term Debt | 0 | 0 | 0 | 0 | | -99.3% | -85.9% | 186.0% | 1,060.0% |
Ratios
|
|---|
| Gross Margin | 67.4% | 68.7% | 67.2% | 68.5% | | 0.2% | 0.6% | -2.0% | 1.2% |
| EBITDA Margin | -1.6% | 2.4% | -5.5% | 0.8% | | 18.2% | 10.3% | -4.5% | -0.8% |
| Net Income Margin | -2.2% | 1.6% | -6.6% | -0.3% | | 20.2% | 12.1% | 0.6% | -1.4% |
Peers in Internet Services & Infrastruc
Below you can find Crexendo Inc benchmarking vs. other companies in Internet Services & Infrastruc 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 |
|---|
| Liberated Syndication Inc ($LSYN) | | | | 20.4% | 108.0% |
| GTT Communications, Inc. ($GTT) | | 78.1% | 41.3% | 58.7% | 80.1% |
| MongoDB, Inc. ($MDB) | | | | 55.3% | 63.8% |
| Twilio Inc. ($TWLO) | | 87.9% | 66.1% | 43.9% | 62.9% |
| Okta, Inc. ($OKTA) | | | 109.5% | 86.6% | 60.0% |
| |
|---|
| Median (15 companies) | 25.5% | 13.9% | 13.3% | 12.6% | 19.2% |
|---|
| Crexendo Inc ($CXDO) | | 3.0% | 16.6% | 11.7% | 16.9% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Liberated Syndication Inc ($LSYN) | | | 68.1% | 77.5% | 84.9% |
| VeriSign, Inc. ($VRSN) | 81.3% | 81.8% | 82.6% | 83.4% | 84.2% |
| Wix.com Ltd. ($WIX) | 81.6% | 82.8% | 84.4% | 83.7% | 79.0% |
| MongoDB, Inc. ($MDB) | | | 68.0% | 70.5% | 74.2% |
| Carbonite, Inc. ($CARB) | 68.5% | 71.6% | 70.6% | 70.7% | 71.2% |
| |
|---|
| Median (15 companies) | 48.7% | 55.4% | 60.5% | 61.7% | 64.9% |
|---|
| Crexendo Inc ($CXDO) | 52.8% | 54.3% | 60.2% | 67.9% | 67.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 62.2% | 63.0% | 65.2% | 65.0% | 67.1% |
| Liberated Syndication Inc ($LSYN) | | | 32.0% | -29.9% | 32.2% |
| Internap Corporation ($INAP) | 20.0% | 21.0% | -5.4% | 28.4% | 30.5% |
| Akamai Technologies, Inc. ($AKAM) | 37.5% | 34.8% | 33.9% | 27.6% | 29.4% |
| Endurance International Group Holdings, Inc. ($EIGI) | 23.2% | 24.0% | 14.8% | 20.0% | 26.0% |
| |
|---|
| Median (15 companies) | 6.1% | 2.9% | -2.8% | -2.0% | 16.8% |
|---|
| Crexendo Inc ($CXDO) | -78.2% | -58.4% | -28.7% | -6.2% | -1.0% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 16.2% | 20.2% | 13.5% | 16.7% | 14.9% |
| 21Vianet Group, Inc. ($VNET) | 32.6% | 29.0% | 15.8% | 11.7% | 12.8% |
| Internap Corporation ($INAP) | 24.0% | 17.5% | 14.9% | 12.7% | 12.1% |
| Limelight Networks, Inc. ($LLNW) | 11.5% | 14.5% | 5.7% | 11.2% | 8.2% |
| GTT Communications, Inc. ($GTT) | 2.8% | 3.8% | 4.6% | 5.1% | 5.2% |
| |
|---|
| Median (15 companies) | 4.4% | 3.8% | 4.0% | 4.1% | 3.3% |
|---|
| Crexendo Inc ($CXDO) | 0.1% | 0.3% | 0.0% | 0.0% | 0.1% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| VeriSign, Inc. ($VRSN) | 60.6% | 68.7% | 65.2% | 54.3% | 81.9% |
| Liberated Syndication Inc ($LSYN) | | | | -13.2% | 12.1% |
| Akamai Technologies, Inc. ($AKAM) | 15.5% | 12.5% | 11.9% | 7.9% | 8.2% |
| Endurance International Group Holdings, Inc. ($EIGI) | 1.0% | 4.2% | -2.3% | 2.0% | 7.5% |
| GoDaddy Inc. ($GDDY) | -3.3% | -1.7% | 2.9% | 2.7% | 4.6% |
| |
|---|
| Median (16 companies) | -2.4% | -4.4% | -11.3% | -13.2% | 1.4% |
|---|
| Crexendo Inc ($CXDO) | -114.9% | -123.1% | -114.0% | -44.3% | -10.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| GTT Communications, Inc. ($GTT) | 3.1x | 7.4x | 6.8x | 7.2x | 12.7x |
| Internap Corporation ($INAP) | 5.1x | 5.3x | | 6.5x | 6.9x |
| Endurance International Group Holdings, Inc. ($EIGI) | 7.3x | 6.0x | 11.8x | 7.8x | 5.8x |
| GoDaddy Inc. ($GDDY) | 14.0x | 5.4x | 2.3x | 6.8x | 3.9x |
| VeriSign, Inc. ($VRSN) | 1.9x | 2.5x | 2.2x | 2.6x | 1.8x |
| |
|---|
| Median (10 companies) | 3.1x | 3.9x | 2.2x | 4.5x | 1.4x |
|---|
