Asure Software Inc reports 63.4% revenue growth in 2018 and 1.8 pp EBITDA Margin decline from 9.3% to 7.5%
03/14/2019 • About Asure Software Inc (
$ASUR) • By InTwits
Asure Software Inc reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Asure Software Inc is a fast growth stock: 2018 revenue growth was 63.4%, 5 year revenue CAGR was 28.4% at 2018 ROIC -3.5%
- Asure Software Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.8%. At the same time it's a lot of higher than industry average of 3.1%.
- CAPEX is quite volatile: $2m in 2018, $1m in 2017, $0m in 2016, $1m in 2015, $1m in 2014
- The company has unprofitable business model: ROIC is -3.5%
- It operates with high leverage: Net Debt/EBITDA is 14.5x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Asure Software Inc's Revenue surged on 63.4%. Revenue growth showed small slowdown in 18Q4 - it was 59.5% YoY. Revenue decline was slowing down on average by 16.7 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 55.0 pp from -77.6% to -22.7% in 2018.
Gross Margin dropped on 11.5 pp from 76.8% to 65.3% in 2018. SG&A as a % of Revenue decreased on 9.0 pp from 62.2% to 53.2% in 2018. During the last 5 years SG&A as a % of Revenue topped in 2017 at 62.2%.
Net Income margin increased on 2.0 pp from -10.5% to -8.5% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 2.1%. Asure Software Inc's CAPEX/Revenue decreased on 3.1 pp from 5.2% in 2015 to 2.1% in 2018. It's average level of CAPEX/Revenue for the last three years was 2.0%.
Return on investment
The company operates at negative ROIC (-3.5%) and ROE (-9.1%). ROIC decreased on 2.4 pp from -1.0% to -3.5% in 2018. ROE increased on 4.9 pp from -14.0% to -9.1% in 2018.
Leverage (Debt)
Company's Net Debt / EBITDA is 14.5x and Debt / EBITDA is 16.8x. Net Debt / EBITDA jumped on 5.0x from 9.5x to 14.5x in 2018. Debt jumped on 47.6% while cash dropped on 44.4%. Net Debt/EBITDA grew at 2.7x per annum in the last 5 years.
Asure Software Inc has no short term refinancing risk: cash is higher than short term debt (326.3%).
Financial and operational results
FY ended 12/31/2018
Asure Software Inc ($ASUR) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 27.206 | 26.906 | 35.542 | 54.442 | 88.952 | 63.4% |
| Gross Profit | 20.892 | 19.566 | 27.425 | 41.823 | 58.122 | 39.0% |
| SG&A | 13.999 | 14.964 | 21.048 | 33.887 | 47.333 | 39.7% |
| EBITDA | 4.405 | 2.695 | 4.840 | 5.058 | 6.664 | 31.8% |
| Net Income | -0.262 | -1.757 | -0.972 | -5.722 | -7.548 | |
Balance Sheet
|
|---|
| Cash | 0.320 | 1.158 | 12.767 | 27.792 | 15.444 | -44.4% |
| Short Term Debt | 0.750 | 1.031 | 5.455 | 8.895 | 4.733 | -46.8% |
| Long Term Debt | 14.381 | 12.262 | 24.581 | 66.973 | 107.229 | 60.1% |
Cash flow
|
|---|
| Capex | 0.807 | 1.406 | 0.436 | 1.400 | 1.898 | 35.6% |
Ratios
|
|---|
| Revenue growth | 6.8% | -1.1% | 32.1% | 53.2% | 63.4% | |
| EBITDA growth | 4.6% | -38.8% | 79.6% | 4.5% | 31.8% | |
|
|---|
| Gross Margin | 76.8% | 72.7% | 77.2% | 76.8% | 65.3% | -11.5% |
| EBITDA Margin | 16.2% | 10.0% | 13.6% | 9.3% | 7.5% | -1.8% |
| SG&A, % of revenue | 51.5% | 55.6% | 59.2% | 62.2% | 53.2% | -9.0% |
| Net Income Margin | -1.0% | -6.5% | -2.7% | -10.5% | -8.5% | 2.0% |
| CAPEX, % of revenue | 3.0% | 5.2% | 1.2% | 2.6% | 2.1% | -0.4% |
|
|---|
| ROIC | 7.7% | -1.7% | 3.6% | -1.0% | -3.5% | -2.4% |
| ROE | -6.0% | -42.9% | -8.9% | -14.0% | -9.1% | 4.9% |
| Net Debt/EBITDA | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x | 5.0x |
Asure Software Inc ($ASUR) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 19 | 22 | 23 | 24 | | 80.0% | 69.0% | 51.1% | 59.5% |
| EBITDA | 2 | 2 | 2 | -0 | | 181.7% | 210.7% | 2.5% | -123.2% |
| Net Income | -2 | -4 | -4 | 2 | | | | | |
Balance Sheet
|
|---|
| Cash | 26 | 47 | 19 | 15 | | 1,028.0% | 54.0% | -30.1% | -44.4% |
| Short Term Debt | 10 | 7 | 5 | 5 | | 243.2% | -9.1% | -48.4% | -46.8% |
| Long Term Debt | 107 | 106 | 109 | 107 | | 279.1% | 56.0% | 62.1% | 60.1% |
Ratios
|
|---|
| Gross Margin | 71.2% | 66.8% | 63.9% | 60.8% | | -6.1% | -11.2% | -14.2% | -13.4% |
| EBITDA Margin | 11.8% | 10.9% | 9.8% | -1.2% | | 4.3% | 5.0% | -4.6% | -9.3% |
| Net Income Margin | -10.0% | -17.3% | -15.3% | 7.1% | | -0.1% | -3.0% | -7.0% | 17.2% |
Peers in Application Software
Below we provide Asure Software Inc 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 14.0% | 13.6% | 14.8% | 15.2% |
|---|
| Asure Software Inc ($ASUR) | | -1.1% | 32.1% | 53.2% | 63.4% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 62.8% | 61.7% | 63.8% | 64.4% | 66.1% |
|---|
| Asure Software Inc ($ASUR) | 76.8% | 72.7% | 77.2% | 76.8% | 65.3% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| Asure Software Inc ($ASUR) | 16.2% | 10.0% | 13.6% | 9.3% | 7.5% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| Asure Software Inc ($ASUR) | 3.0% | 5.2% | 1.2% | 2.6% | 2.1% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.8% | -11.8% | -10.4% |
|---|
| Asure Software Inc ($ASUR) | 7.7% | -1.7% | 3.6% | -1.0% | -3.5% |
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 |
| SS&C Technologies Holdings, Inc. ($SSNC) | 1.7x | 7.3x | 4.6x | 3.1x | 8.5x |
| Avaya Holdings Corp. ($AVYA) | | | | | 7.4x |
| Five9, Inc. ($FIVN) | | | -6.7x | -8.6x | 7.3x |
| |
|---|
| Median (69 companies) | -1.4x | -1.0x | -0.9x | -0.9x | -0.7x |
|---|
| Asure Software Inc ($ASUR) | 3.4x | 4.5x | 3.6x | 9.5x | 14.5x |
