Xunlei Limited revenue growth decelerated to 15.0% in 2018 vs. 43.1% a year earliner
03/07/2019 • About Xunlei Limited (
$XNET) • By InTwits
Xunlei Limited reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -16.3%
- Xunlei Limited motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -9.2% for the sames years
- Xunlei Limited has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.7%. At the same time it's a lot of higher than industry average of 7.4%.
- CAPEX is quite volatile: $1m in 2018, $5m in 2017, $14m in 2016, $5m in 2015, $8m in 2014
- The company has unprofitable business model: ROIC is -12.1%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Xunlei Limited's Revenue surged on 15.0%. Revenue growth showed slowdown in 18Q4 - it was -48.6% YoY. During the last 5 years Revenue growth topped in 2017 at 43.1%. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.7 pp from -22.0% to -16.3% in 2018. During the last 5 years EBITDA Margin bottomed in 2016 at -23.6% and was growing since that time.
Gross Margin increased on 8.6 pp from 41.2% to 49.8% in 2018. During 2014-2018 Gross Margin bottomed in 2017 at 41.2%. SG&A as a % of Revenue increased on 4.9 pp from 28.1% to 33.0% in 2018.
Net Income margin increased slightly on 1.8 pp from -18.9% to -17.0% in 2018. During 2014-2018 Net Income margin bottomed in 2017 at -18.9%.
Investments (CAPEX, working capital and M&A)
In 2018 Xunlei Limited had CAPEX/Revenue of 0.62%. Xunlei Limited showed decline in CAPEX/Revenue of 4.1 pp from 4.7% in 2015 to 0.62% in 2018. It's average CAPEX/Revenue for the last three years was 4.4%.
Return on investment
The company operates at negative ROIC (-12.1%) and ROE (-10.8%). ROIC increased slightly on 1.7 pp from -13.8% to -12.1% in 2018. ROE decreased slightly on 1.2 pp from -9.5% to -10.8% in 2018. ROIC declined at -3.7 pp per annum in the last 5 years. During the last 5 years ROE topped in 2015 at -2.9% and was declining since that time.
Leverage (Debt)
The company has no debt. Cash dropped on 47.3%.
Financial and operational results
FY ended 12/31/2018
Xunlei Limited ($XNET) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 133.9 | 104.5 | 140.2 | 200.6 | 230.6 | 15.0% |
| Gross Profit | 78.2 | 45.3 | 60.3 | 82.7 | 114.9 | 39.0% |
| SG&A | 40.5 | 41.0 | 40.6 | 56.4 | 76.2 | 35.0% |
| EBITDA | 53.7 | -13.7 | -33.1 | -44.2 | -37.5 | |
| Net Income | 10.8 | -13.2 | -24.1 | -37.8 | -39.3 | |
Balance Sheet
|
|---|
| Cash | 404.3 | 361.8 | 199.5 | 233.5 | 122.9 | -47.3% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 7.8 | 4.9 | 13.8 | 5.3 | 1.4 | -73.3% |
Ratios
|
|---|
| Revenue growth | -23.3% | -22.0% | 34.1% | 43.1% | 15.0% | |
| EBITDA growth | 13.6% | -125.6% | 141.3% | 33.3% | -15.1% | |
|
|---|
| Gross Margin | 58.4% | 43.3% | 43.0% | 41.2% | 49.8% | 8.6% |
| EBITDA Margin | 40.1% | -13.1% | -23.6% | -22.0% | -16.3% | 5.7% |
| SG&A, % of revenue | 30.2% | 39.3% | 29.0% | 28.1% | 33.0% | 4.9% |
| Net Income Margin | 8.1% | -12.6% | -17.2% | -18.9% | -17.0% | 1.8% |
| CAPEX, % of revenue | 5.8% | 4.7% | 9.8% | 2.7% | 0.6% | -2.0% |
|
|---|
| ROIC | 2.9% | -7.0% | -9.8% | -13.8% | -12.1% | 1.7% |
| ROE | -39.2% | -2.9% | -5.6% | -9.5% | -10.8% | -1.2% |
| Net Debt/EBITDA | -7.5x | | | | |
Xunlei Limited ($XNET) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 78 | 65 | 45 | 42 | | 98.3% | 58.4% | -4.3% | -48.6% |
| Net Income | 8 | 1 | -16 | -32 | | | | | -877.2% |
Balance Sheet
|
|---|
| Cash | 200 | 166 | 116 | 123 | | -18.1% | 40.3% | -23.9% | -47.3% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 48.2% | 53.0% | 53.0% | 44.6% | | 7.2% | 11.7% | 14.1% | -4.0% |
| Net Income Margin | 10.3% | 1.1% | -35.2% | -76.6% | | 27.3% | 24.5% | 19.2% | -81.7% |
Peers in Application Software
Below we provide Xunlei Limited benchmarking against other companies in Application Software 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 |
|---|
| 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 13.6% | 14.8% | 15.2% |
|---|
| Xunlei Limited ($XNET) | | -22.0% | 34.1% | 43.1% | 15.0% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.1% |
|---|
| Xunlei Limited ($XNET) | 58.4% | 43.3% | 43.0% | 41.2% | 49.8% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -9.4% | -4.7% | -3.3% | -3.2% |
|---|
| Xunlei Limited ($XNET) | 40.1% | -13.1% | -23.6% | -22.0% | -16.3% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Xunlei Limited ($XNET) | 5.8% | 4.7% | 9.8% | 2.7% | 0.6% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.2% | -10.2% | -9.3% |
|---|
| Xunlei Limited ($XNET) | 2.9% | -7.0% | -9.8% | -13.8% | -12.1% |
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 (70 companies) | -1.2x | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
