Inuvo, Inc revenue started to decline in 2018: decreased 7.8% vs. 11.2% growth a year earliner
03/15/2019 • About Inuvo, Inc (
$INUV) • By InTwits
Inuvo, 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: -3.1%
- EBITDA Margin is quite volatile: -3.1% in 2018, -1.5% in 2017, 1.9% in 2016, 5.6% in 2015, 8.6% in 2014
- Inuvo, Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.9%. At the same time it's in pair with industry average of 8.7%
- CAPEX is quite volatile: $0m in 2018, $0m in 2017, $0m in 2016, $0m in 2015, $0m in 2014
- The company has unprofitable business model: ROIC is -40.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Inuvo, Inc's Revenue decreased on 7.8%. Revenue decline showed acceleration in 18Q4 - it was 28.4% YoY. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin decreased slightly on 1.6 pp from -1.5% to -3.1% in 2018. EBITDA Margin stuck to a declining trend at -3.0 pp per annum in the last 5 years.
Gross Margin increased on 5.3 pp from 53.9% to 59.2% in 2018. SG&A as a % of Revenue increased slightly on 1.1 pp from 10.5% to 11.6% in 2018. During 2014-2018 SG&A as a % of Revenue bottomed in 2015 at 6.6% and was growing since that time.
Net Income margin decreased on 4.2 pp from -3.8% to -8.0% in 2018. Net Income margin declined at -3.2 pp per annum in 2014-2018.
Investments (CAPEX, working capital and M&A)
In 2018 Inuvo, Inc had CAPEX/Revenue of 2.2%. The company's CAPEX/Revenue showed almost no change from 2015 to 2018. For the last three years the average CAPEX/Revenue was 1.9%.
Return on investment
The company operates at negative ROIC (-40.0%) and ROE (-46.9%). ROIC decreased on 7.8 pp from -32.2% to -40.0% in 2018. ROE dropped on 23.0 pp from -23.9% to -46.9% in 2018. ROIC stuck to a declining trend at -16.5 pp per annum in the last 5 years. ROE stuck to a declining trend at -20.4 pp per annum in the last 5 years.
Leverage (Debt)
Debt level is -0.4x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2018. Debt surged on 211% while cash dropped on 94.4%.
Inuvo, Inc has short term refinancing risk: cash is only 51.0% of short term debt.
Financial and operational results
FY ended 12/31/2018
Inuvo, Inc ($INUV) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 49.599 | 70.438 | 71.530 | 79.554 | 73.331 | -7.8% |
| Gross Profit | 29.175 | 46.716 | 50.165 | 42.885 | 43.409 | 1.2% |
| SG&A | 4.397 | 4.646 | 4.996 | 8.343 | 8.503 | 1.9% |
| EBITDA | 4.247 | 3.954 | 1.353 | -1.207 | -2.289 | |
| Net Income | 2.105 | 2.340 | -0.773 | -3.058 | -5.891 | |
Balance Sheet
|
|---|
| Cash | 3.715 | 4.257 | 3.947 | 4.085 | 0.229 | -94.4% |
| Short Term Debt | 0.960 | 0.046 | 0.031 | 0.210 | 0.449 | 113.8% |
| Long Term Debt | 2.667 | 0.031 | 0.000 | 0.281 | 1.081 | 284.0% |
Cash flow
|
|---|
| Capex | 0.840 | 1.526 | 1.116 | 1.559 | 1.635 | 4.9% |
Ratios
|
|---|
| Revenue growth | -9.8% | 42.0% | 1.6% | 11.2% | -7.8% | |
| EBITDA growth | 38.2% | -6.9% | -65.8% | -189.2% | 89.7% | |
|
|---|
| Gross Margin | 58.8% | 66.3% | 70.1% | 53.9% | 59.2% | 5.3% |
| EBITDA Margin | 8.6% | 5.6% | 1.9% | -1.5% | -3.1% | -1.6% |
| SG&A, % of revenue | 8.9% | 6.6% | 7.0% | 10.5% | 11.6% | 1.1% |
| Net Income Margin | 4.2% | 3.3% | -1.1% | -3.8% | -8.0% | -4.2% |
| CAPEX, % of revenue | 1.7% | 2.2% | 1.6% | 2.0% | 2.2% | 0.3% |
|
|---|
| ROIC | 18.3% | 16.0% | -7.6% | -32.2% | -40.0% | -7.8% |
| ROE | 30.9% | 24.3% | -6.9% | -23.9% | -46.9% | -23.0% |
| Net Debt/EBITDA | -0.0x | -1.1x | -2.9x | | |
Inuvo, Inc ($INUV) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 21 | 19 | 17 | 17 | | 19.1% | 4.0% | -17.3% | -28.4% |
| EBITDA | -1 | 0 | -1 | -1 | | | | | -415.5% |
| Net Income | -1 | -1 | -1 | -2 | | | | | -320.0% |
Balance Sheet
|
|---|
| Cash | 4 | 4 | 4 | 0 | | 5.7% | 11.9% | 44.4% | -94.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | 222.6% | 267.4% | -3.9% | 113.8% |
| Long Term Debt | 0 | 0 | 0 | 1 | | -91.1% | 680.5% | -61.5% | 284.0% |
Ratios
|
|---|
| Gross Margin | 57.2% | 63.2% | 63.1% | 53.2% | | 3.0% | 4.9% | 10.6% | 1.7% |
| EBITDA Margin | -2.6% | 0.2% | -3.2% | -7.4% | | 3.0% | 3.4% | -2.8% | -9.1% |
| Net Income Margin | -6.9% | -4.4% | -8.6% | -13.0% | | 3.0% | 3.2% | -3.7% | -17.2% |
Peers in Application Software
Below you can find Inuvo, Inc benchmarking vs. other companies in Application Software 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 |
|---|
| 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 13.5% | 14.3% | 15.7% | 15.2% |
|---|
| Inuvo, Inc ($INUV) | | 42.0% | 1.6% | 11.2% | -7.8% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (150 companies) | 63.4% | 61.7% | 63.8% | 64.6% | 66.1% |
|---|
| Inuvo, Inc ($INUV) | 58.8% | 66.3% | 70.1% | 53.9% | 59.2% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (152 companies) | -10.3% | -10.7% | -5.3% | -4.2% | -3.3% |
|---|
| Inuvo, Inc ($INUV) | 8.6% | 5.6% | 1.9% | -1.5% | -3.1% |
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. ($ELLI) | 12.3% | 20.6% | 16.7% | 21.1% | 19.4% |
| |
|---|
| Median (153 companies) | 2.8% | 2.7% | 3.0% | 2.3% | 2.4% |
|---|
| Inuvo, Inc ($INUV) | 1.7% | 2.2% | 1.6% | 2.0% | 2.2% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (179 companies) | -14.4% | -13.1% | -9.8% | -10.2% | -9.3% |
|---|
| Inuvo, Inc ($INUV) | 18.3% | 16.0% | -7.6% | -32.2% | -40.0% |
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) | -1.4x | -0.9x | -0.9x | -0.8x | -0.7x |
|---|
