InterXion Holding N.V. reports 77.9% CAPEX growth in 2018 and 14.8% Revenue growth
03/06/2019 • About InterXion Holding N.V. (
$INXN) • By InTwits
InterXion Holding N.V. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- InterXion Holding N.V. is a growth stock: 2018 revenue growth was 14.8%, 5 year revenue CAGR was 12.8% at 2018 ROIC 6.6%
- InterXion Holding N.V. has high CAPEX intensity: 5 year average CAPEX/Revenue was 59.4%. At the same time it's a lot of higher than industry average of 6.1%.
- CAPEX is quite volatile: $440m in 2018, $247m in 2017, $242m in 2016, $186m in 2015, $213m in 2014
- The company has potentially unprofitable business model: ROIC is 6.6%
- It operates with high leverage: Net Debt/EBITDA is 4.6x 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 jumped on 14.8%. Revenue growth showed slowdown in 18Q4 - it was 13.1% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased slightly on 0.61 pp from 15.6% to 15.0% in FY2018.
Gross Margin showed almost no change in 2018. During the last 5 years Gross Margin topped in 2016 at 61.5% and was declining since that time. SG&A as a % of Revenue decreased slightly on 0.69 pp from 18.9% to 18.2% in 2018. During the last 5 years SG&A as a % of Revenue topped in 2015 at 41.6% and was declining since that time. Stock Based Compensation (SBC) as a % of Revenue showed almost no change in 2018. During the last 5 years SBC as a % of Revenue bottomed in 2016 at 1.4% and was growing since that time.
Net Income margin decreased on 2.4 pp from 8.0% to 5.5% in 2018. During 2014-2018 Net Income margin topped in 2015 at 12.6% and was declining since that time. The efficient tax rate was 37.1% in 2018 while the average for the last five years was 30.0%.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 78.3%. InterXion Holding N.V.'s CAPEX/Revenue jumped on 30.1 pp from 48.1% in 2015 to 78.3% in 2018. It's average level of CAPEX/Revenue for the last three years was 62.1%. To fuel its fast growth InterXion Holding N.V. made large investments to CAPEX (183% of EBITDA).
Return on investment
The company operates at low ROIC (6.6%) and ROE (5.1%). ROIC decreased slightly on 0.65 pp from 7.3% to 6.6% in 2018. ROE decreased slightly on 1.8 pp from 6.9% to 5.1% in 2018. ROIC followed a declining trend at -0.73 pp per annum in the last 5 years. During the last 5 years ROE topped in 2015 at 10.3% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 4.6x and Debt / EBITDA is 5.4x. Net Debt / EBITDA jumped on 0.8x from 3.8x to 4.6x in 2018. Debt surged on 54.9% while cash jumped on 384%. During 2014-2018 Net Debt/EBITDA bottomed in 2015 at 2.9x and was growing since that time.
InterXion Holding N.V. has good short term financial stability: Interest coverage ratio (ICR) is 2.1x. InterXion Holding N.V. has no short term refinancing risk: cash is higher than short term debt (797.6%).
Average interest expence charged on company's debt was 4.1% in 2018.
Valuation and dividends
InterXion Holding N.V.'s trades at EV/EBITDA 23.9x and P/E 149.1x.
Management team
David C Ruberg is a the company's CEO. David C Ruberg is a founder and has spent 12 years with the company. CEO total compensation was
$5,626,000 in 2018 which included
$590,000 salary and
$735,000 annual bonus. The company's CFO is John Doherty. John Doherty has 0 years tenure at the company.
The company has 1.5% shares owned by insiders. Insider ownership didn't change in 2018.
The company has 720 employees. The number of employees jumped on 12.9%. Average revenue per employee in 2018 was
$780,211 and it increased slightly on 1.7%.
Financial and operational results
FY ended 12/31/2018
InterXion Holding N.V. ($INXN) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 340.6 | 386.6 | 421.8 | 489.3 | 561.8 | 14.8% |
| Gross Profit | 201.5 | 234.9 | 259.2 | 298.8 | 342.3 | 14.5% |
| SG&A | 123.4 | 160.7 | 167.0 | 92.4 | 102.2 | 10.6% |
| EBITDA | 140.6 | 173.7 | 182.4 | 206.5 | 240.2 | 16.3% |
| EBIT | 78.4 | 95.5 | 92.6 | 98.3 | 111.2 | 13.2% |
| Interest expence | 26.3 | 30.3 | 34.9 | 41.4 | 52.6 | 27.2% |
| Tax | 15.4 | 17.9 | 16.5 | 14.8 | 18.3 | 23.6% |
| Net Income | 35.1 | 48.6 | 39.9 | 39.1 | 31.1 | -20.3% |
| Stock Based Compensation | 6.6 | 6.5 | 6.1 | 8.9 | 12.3 | 38.0% |
Balance Sheet
|
|---|
| Cash | 99.9 | 58.6 | 115.9 | 38.5 | 186.1 | 383.6% |
| Short Term Debt | 21.1 | 5.0 | 11.5 | 108.8 | 23.3 | -78.5% |
| Long Term Debt | 540.5 | 550.8 | 724.0 | 724.1 | 1,266.8 | 75.0% |
Cash flow
|
|---|
| Capex | 212.9 | 186.1 | 242.0 | 247.2 | 439.7 | 77.9% |
Ratios
|
|---|
| Revenue growth | 10.9% | 13.5% | 9.1% | 16.0% | 14.8% | |
| EBITDA growth | 9.8% | 23.6% | 5.0% | 13.2% | 16.3% | |
|
|---|
| Gross Margin | 59.2% | 60.8% | 61.5% | 61.1% | 60.9% | -0.1% |
| EBITDA Margin | 41.3% | 44.9% | 43.3% | 42.2% | 42.8% | 0.5% |
| EBIT Margin | 23.0% | 24.7% | 22.0% | 20.1% | 19.8% | -0.3% |
| SG&A, % of revenue | 36.2% | 41.6% | 39.6% | 18.9% | 18.2% | -0.7% |
| SBC, % of revenue | 1.9% | 1.7% | 1.4% | 1.8% | 2.2% | 0.4% |
| Net Income Margin | 10.3% | 12.6% | 9.5% | 8.0% | 5.5% | -2.4% |
| CAPEX, % of revenue | 62.5% | 48.1% | 57.4% | 50.5% | 78.3% | 27.8% |
|
|---|
| ROIC | 9.2% | 9.4% | 8.0% | 7.3% | 6.6% | -0.7% |
| ROE | 8.5% | 10.3% | 7.6% | 6.9% | 5.1% | -1.8% |
| Net Debt/EBITDA | 3.3x | 2.9x | 3.4x | 3.8x | 4.6x | 0.8x |
| Interest coverage ratio (ICR) | 3.0x | 3.1x | 2.7x | 2.4x | 2.1x | -0.3x |
| Interest expence / Average debt | 4.7% | 5.4% | 5.4% | 5.3% | 4.1% | -1.2% |
People
|
|---|
| Insider ownership | 1.5% | 1.5% | 1.5% | 1.5% | 1.5% | 0.0% |
| Employees | 500 | 533 | 574 | 638 | 720 | 12.9% |
| Revenue/Employee, th. $ | 681 | 725 | 735 | 767 | 780 | 1.7% |
InterXion Holding N.V. ($INXN) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 134 | 139 | 142 | 147 | | 17.5% | 14.9% | 14.1% | 13.1% |
| EBITDA | 56 | 58 | 60 | 65 | | 17.5% | 12.0% | 15.0% | 20.7% |
| Net Income | 12 | 1 | 11 | 8 | | 13.6% | -94.4% | 15.8% | -11.9% |
Balance Sheet
|
|---|
| Cash | 55 | 134 | 290 | 186 | | -23.7% | 171.2% | 658.7% | 383.6% |
| Short Term Debt | 189 | 4 | 5 | 23 | | 235.3% | -92.6% | -94.6% | -78.5% |
| Long Term Debt | 723 | 1,078 | 1,287 | 1,267 | | 0.0% | 50.2% | 79.6% | 75.0% |
Ratios
|
|---|
| Gross Margin | 60.6% | 61.3% | 60.7% | 61.1% | | -0.7% | 1.0% | 0.5% | -1.3% |
| EBITDA Margin | 42.2% | 42.1% | 42.2% | 44.5% | | 0.0% | -1.1% | 0.3% | 2.8% |
| Net Income Margin | 8.7% | 0.4% | 7.7% | 5.4% | | -0.3% | -8.1% | 0.1% | -1.5% |
Peers in IT Consulting & Other Services
Below we provide InterXion Holding N.V. 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 ($CTG) | | -6.0% | -12.1% | -7.3% | 19.1% |
| |
|---|
| Median (35 companies) | | 3.3% | 7.7% | 3.8% | 3.4% |
|---|
| InterXion Holding N.V. ($INXN) | | 13.5% | 9.1% | 16.0% | 14.8% |
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% |
| 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% |
| Teradata Corporation ($TDC) | 54.1% | 50.4% | 51.2% | 47.5% | 47.4% |
| |
|---|
| Median (37 companies) | 25.8% | 30.9% | 28.1% | 27.7% | 28.9% |
|---|
| InterXion Holding N.V. ($INXN) | 59.2% | 60.8% | 61.5% | 61.1% | 60.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| 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% |
| Accenture plc ($ACN) | 15.4% | 15.4% | 15.9% | 14.8% | 16.3% |
| |
|---|
| Median (36 companies) | 4.8% | 3.3% | 6.7% | 6.3% | 7.2% |
|---|
| InterXion Holding N.V. ($INXN) | 41.3% | 44.9% | 43.3% | 42.2% | 42.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| 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% |
| Amdocs Limited ($DOX) | 3.1% | 3.3% | 3.5% | 3.4% | 5.8% |
| |
|---|
| Median (35 companies) | 0.9% | 0.8% | 1.1% | 1.2% | 1.5% |
|---|
| InterXion Holding N.V. ($INXN) | 62.5% | 48.1% | 57.4% | 50.5% | 78.3% |
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. ($EPAM) | 19.7% | 18.4% | 18.2% | 18.9% | 21.2% |
| |
|---|
| Median (44 companies) | 6.2% | 4.7% | 7.3% | 4.7% | 6.9% |
|---|
| InterXion Holding N.V. ($INXN) | 9.2% | 9.4% | 8.0% | 7.3% | 6.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Infinite Group Inc ($IMCI) | | | 169.6x | | 10.5x |
| Gartner, Inc. ($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 |
| SCIENCE APPLICATIONS INTERNATIONAL CORPORATION ($SAIC) | 1.3x | 0.7x | 3.0x | 2.6x | 2.9x |
| |
|---|
| Median (28 companies) | -0.2x | -0.3x | 0.0x | 0.4x | 0.4x |
|---|
| InterXion Holding N.V. ($INXN) | 3.3x | 2.9x | 3.4x | 3.8x | 4.6x |
