Intelligent Systems Corporation Net Income jumped on 1,570% and Revenue surged on 119%
03/13/2019 • About Intelligent Systems Corporation (
$INS) • By InTwits
Intelligent Systems Corporation reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- Intelligent Systems Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 5.6%. At the same time it's a lot of higher than industry average of 3.6%.
- CAPEX is quite volatile: $1m in 2018, $1m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has highly profitable business model: ROIC is 26.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Intelligent Systems Corporation's Revenue surged on 119%. Revenue growth showed acceleration in 18Q4 - it increased 137.8% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 46.4 pp from -12.8% to 33.6% in 2018. EBITDA Margin grew at 21.1 pp per annum in the last 5 years.
Gross Margin increased on 6.3 pp from 51.3% to 57.6% in 2018. SG&A as a % of Revenue decreased on 9.7 pp from 20.1% to 10.4% in 2018. During 2014-2018 SG&A as a % of Revenue topped in 2015 at 45.5% and was declining since that time.
Net Income margin jumped on 27.0 pp from 4.1% to 31.1% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 4.3%. The company showed small CAPEX/Revenue decline of 1.4 pp from 5.7% in 2015 to 4.3% in 2018. It's average level of CAPEX/Revenue for the last three years was 6.0%.
Return on investment
The company operates at high and attractive ROIC (26.9%) and ROE (27.5%). ROIC surged on 34.7 pp from -7.8% to 26.9% in 2018. ROE surged on 25.7 pp from 1.8% to 27.5% in 2018. ROIC followed a growing trend at 13.0 pp per annum in the last 5 years.
Leverage (Debt)
The company has no debt. Cash surged on 34.9%.
Valuation and dividends
Intelligent Systems Corporation's trades at EV/EBITDA 31.5x and P/E 37.1x.
Financial and operational results
FY ended 12/31/2018
Intelligent Systems Corporation ($INS) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 4.187 | 4.782 | 8.178 | 9.179 | 20.100 | 119.0% |
| Gross Profit | 2.116 | 2.232 | 4.200 | 4.708 | 11.576 | 145.9% |
| SG&A | 1.221 | 2.177 | 2.147 | 1.843 | 2.081 | 12.9% |
| EBITDA | -2.139 | -2.605 | -0.439 | -1.172 | 6.756 | |
| Net Income | -0.076 | 18.020 | -1.112 | 0.374 | 6.244 | 1,569.5% |
Balance Sheet
|
|---|
| Cash | 2.624 | 18.059 | 17.724 | 14.024 | 18.919 | 34.9% |
| 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 | 0.189 | 0.272 | 0.313 | 0.894 | 0.865 | -3.2% |
Ratios
|
|---|
| Revenue growth | -74.3% | 14.2% | 71.0% | 12.2% | 119.0% | |
| EBITDA growth | -343.3% | 21.8% | -83.1% | 167.0% | -676.5% | |
|
|---|
| Gross Margin | 50.5% | 46.7% | 51.4% | 51.3% | 57.6% | 6.3% |
| EBITDA Margin | -51.1% | -54.5% | -5.4% | -12.8% | 33.6% | 46.4% |
| SG&A, % of revenue | 29.2% | 45.5% | 26.3% | 20.1% | 10.4% | -9.7% |
| Net Income Margin | -1.8% | 376.8% | -13.6% | 4.1% | 31.1% | 27.0% |
| CAPEX, % of revenue | 4.5% | 5.7% | 3.8% | 9.7% | 4.3% | -5.4% |
|
|---|
| ROIC | -32.6% | -19.0% | -3.3% | -7.8% | 26.9% | 34.7% |
| ROE | -0.9% | 103.5% | -4.6% | 1.8% | 27.5% | 25.7% |
| Net Debt/EBITDA | | | | | -2.8x |
Intelligent Systems Corporation ($INS) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 4 | 5 | 5 | 6 | | 138.8% | 48.3% | 192.5% | 137.8% |
| EBITDA | 1 | 1 | 2 | 2 | | | 379.7% | | |
| Net Income | 1 | 1 | 2 | 2 | | | 561.3% | 36.0% | |
Balance Sheet
|
|---|
| Cash | 10 | 11 | 17 | 19 | | -38.3% | -33.1% | 5.4% | 34.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 57.0% | 55.3% | 57.1% | 60.1% | | 9.6% | -1.3% | 0.8% | 16.4% |
| EBITDA Margin | 23.5% | 31.5% | 35.3% | 40.5% | | 49.4% | 21.7% | 58.0% | 64.6% |
| Net Income Margin | 22.0% | 23.1% | 34.5% | 40.1% | | 51.9% | 17.9% | -39.7% | 65.6% |
Peers in Application Software
Below we provide Intelligent Systems Corporation 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% |
| AudioEye, Inc. ($AEYE) | | -35.2% | 193.4% | 175.5% | 106.6% |
| |
|---|
| Median (151 companies) | -43.3% | 13.5% | 13.6% | 15.7% | 15.2% |
|---|
| Intelligent Systems Corporation ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.9% | 64.2% | 64.6% | 66.1% |
|---|
| Intelligent Systems Corporation ($INS) | 50.5% | 46.7% | 51.4% | 51.3% | 57.6% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.3% |
|---|
| Intelligent Systems Corporation ($INS) | -51.1% | -54.5% | -5.4% | -12.8% | 33.6% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| Intelligent Systems Corporation ($INS) | 4.5% | 5.7% | 3.8% | 9.7% | 4.3% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.2% | -11.2% | -9.8% | -11.8% | -10.4% |
|---|
| Intelligent Systems Corporation ($INS) | -32.6% | -19.0% | -3.3% | -7.8% | 26.9% |
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. ($AVYA) | | | | | 7.4x |
| |
|---|
| Median (69 companies) | -1.4x | -1.0x | -0.9x | -0.8x | -0.6x |
|---|
| Intelligent Systems Corporation ($INS) | | | | | -2.8x |
