GlobalSCAPE, Inc. reports 167% Net Income growth in 2018 and 6.2 pp EBITDA Margin growth from 14.1% to 20.2%
03/18/2019 • About GlobalSCAPE, Inc. (
$GSB) • By InTwits
GlobalSCAPE, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- GlobalSCAPE, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. At the same time it's in pair with industry average of 3.1%
- CAPEX is quite volatile: $1m in 2018, $2m in 2017, $2m in 2016, $0m in 2015, $0m in 2014
- The company has highly profitable business model: ROIC is 19.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
GlobalSCAPE, Inc.'s Revenue increased slightly on 1.5%. Revenue growth showed acceleration in 18Q4 - it increased 4.3% YoY. During the last 5 years Revenue growth topped in 2015 at 14.8% and was decelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.5 pp from -22.5% to -29.0% in 2018.
Gross Margin showed almost no change in 2018. During 2014-2018 Gross Margin bottomed in 2016 at 80.7% and was growing since that time. SG&A as a % of Revenue dropped on 17.1 pp from 64.7% to 47.6% in 2018.
Net Income margin increased on 6.6 pp from 4.0% to 10.6% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 4.2% in 2018. The company's CAPEX/Revenue increased on 3.7 pp from 0.49% in 2015 to 4.2% in 2018. It's average level of CAPEX/Revenue for the last three years was 5.4%.
Return on investment
The company operates at good ROIC (19.9%) and ROE (15.3%). ROIC surged on 11.4 pp from 8.5% to 19.9% in 2018. ROE surged on 10.9 pp from 4.5% to 15.3% in 2018.
Leverage (Debt)
The company has no debt. Cash dropped on 20.8%.
Valuation and dividends
GlobalSCAPE, Inc.'s trades at EV/EBITDA 13.5x and P/E 28.3x.
Management team
The company's CEO is Robert Hudson Alpert. Robert Hudson Alpert is a founder and has 3 years tenure with the company. The company's CFO is Karen J Young. Karen J Young has 1 year tenure at the company.
Financial and operational results
FY ended 12/31/2018
GlobalSCAPE, Inc. ($GSB) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 26.770 | 30.735 | 32.595 | 33.891 | 34.416 | 1.5% |
| Gross Profit | 22.986 | 25.447 | 26.303 | 27.678 | 28.180 | 1.8% |
| SG&A | 16.188 | 16.574 | 18.505 | 21.928 | 16.391 | -25.3% |
| EBITDA | 5.498 | 7.864 | 7.272 | 4.766 | 6.968 | 46.2% |
| Net Income | 3.026 | 4.528 | 3.585 | 1.371 | 3.654 | 166.5% |
Balance Sheet
|
|---|
| Cash | 11.358 | 15.885 | 8.895 | 11.583 | 9.173 | -20.8% |
| 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 | 0.252 | 0.152 | 1.764 | 2.212 | 1.438 | -35.0% |
Ratios
|
|---|
| Revenue growth | 10.0% | 14.8% | 6.1% | 4.0% | 1.5% | |
| EBITDA growth | 17.5% | 43.0% | -7.5% | -34.5% | 46.2% | |
|
|---|
| Gross Margin | 85.9% | 82.8% | 80.7% | 81.7% | 81.9% | 0.2% |
| EBITDA Margin | 20.5% | 25.6% | 22.3% | 14.1% | 20.2% | 6.2% |
| SG&A, % of revenue | 60.5% | 53.9% | 56.8% | 64.7% | 47.6% | -17.1% |
| Net Income Margin | 11.3% | 14.7% | 11.0% | 4.0% | 10.6% | 6.6% |
| CAPEX, % of revenue | 0.9% | 0.5% | 5.4% | 6.5% | 4.2% | -2.3% |
|
|---|
| ROIC | 21.9% | 27.0% | 18.9% | 8.5% | 19.9% | 11.4% |
| ROE | 16.3% | 19.7% | 13.1% | 4.5% | 15.3% | 10.9% |
| Net Debt/EBITDA | -2.1x | -2.0x | -1.2x | -2.4x | -1.3x | 1.1x |
GlobalSCAPE, Inc. ($GSB) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 8 | 8 | 9 | 9 | | -8.6% | -0.2% | 9.3% | 4.3% |
| EBITDA | -1 | 1 | 2 | 4 | | -137.9% | 18.5% | 100.7% | 288.7% |
| Net Income | -1 | 1 | 1 | 3 | | -212.5% | 29.8% | 261.6% | |
Balance Sheet
|
|---|
Ratios
|
|---|
| Gross Margin | 79.0% | 81.5% | 83.3% | 83.2% | | -2.8% | -0.5% | 2.5% | 1.1% |
| EBITDA Margin | -8.4% | 16.3% | 21.1% | 46.9% | | -28.7% | 2.6% | 9.6% | 34.3% |
| Net Income Margin | -12.1% | 7.0% | 11.1% | 32.3% | | -22.0% | 1.6% | 7.8% | 33.6% |
Peers in Systems Software
Below we provide GlobalSCAPE, Inc. benchmarking against other companies in Systems 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 |
|---|
| Advantego Corp ($ADGO) | | | | | 973.8% |
| Solbright Group Inc ($SBRT) | | | 286.4% | 25.4% | 414.0% |
| Duos Technologies Group Inc ($DUOT) | | 61.0% | -9.8% | -36.4% | 210.2% |
| Dell Technologies Inc. ($DVMT) | | | | | 145.7% |
| Finjan Holdings, Inc. ($FNJN) | | -6.2% | 292.3% | 174.6% | 63.0% |
| |
|---|
| Median (48 companies) | | 20.6% | 14.7% | 16.6% | 20.4% |
|---|
| GlobalSCAPE, Inc. ($GSB) | | 14.8% | 6.1% | 4.0% | 1.5% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| StrikeForce Technologies Inc ($SFOR) | 97.0% | 96.9% | 98.3% | 95.4% | 94.0% |
| Varonis Systems, Inc. ($VRNS) | 90.2% | 90.6% | 90.5% | 90.4% | 89.8% |
| Check Point Software Technologies Ltd. ($CHKP) | 88.2% | 88.5% | 88.5% | 88.6% | 89.6% |
| Tableau Software, Inc. ($DATA) | 91.0% | 88.7% | 88.0% | 87.1% | 87.7% |
| Attunity Ltd. ($ATTU) | 90.7% | 84.9% | 83.9% | 84.1% | 87.5% |
| |
|---|
| Median (53 companies) | 76.1% | 74.5% | 73.1% | 73.9% | 73.5% |
|---|
| GlobalSCAPE, Inc. ($GSB) | 85.9% | 82.8% | 80.7% | 81.7% | 81.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 54.3% | 52.4% | 49.8% | 50.7% | 48.8% |
| SolarWinds Corporation ($SWI) | | | -8.0% | 44.0% | 44.8% |
| Finjan Holdings, Inc. ($FNJN) | -192.1% | -295.2% | 2.2% | 30.2% | 42.0% |
| Oracle Corporation ($ORCL) | 46.2% | 43.8% | 40.8% | 40.2% | 40.8% |
| CA Inc. ($CA) | 33.9% | 36.7% | 37.2% | 36.1% | 35.3% |
| |
|---|
| Median (47 companies) | -2.4% | -6.6% | -9.8% | -5.4% | -4.7% |
|---|
| GlobalSCAPE, Inc. ($GSB) | 20.5% | 25.6% | 22.3% | 14.1% | 20.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| The Rubicon Project, Inc. ($RUBI) | 15.6% | 11.4% | 12.0% | 26.0% | 16.0% |
| CYREN Ltd. ($CYRN) | 2.4% | 4.4% | 3.2% | 5.8% | 9.2% |
| ServiceNow, Inc. ($NOW) | 8.0% | 8.7% | 7.6% | 7.8% | 8.6% |
| Qualys, Inc. ($QLYS) | 10.4% | 12.2% | 11.7% | 16.4% | 8.2% |
| Zscaler, Inc. ($ZS) | | 12.5% | 7.8% | 6.5% | 8.0% |
| |
|---|
| Median (48 companies) | 2.9% | 2.2% | 2.0% | 2.2% | 2.5% |
|---|
| GlobalSCAPE, Inc. ($GSB) | 0.9% | 0.5% | 5.4% | 6.5% | 4.2% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Finjan Holdings, Inc. ($FNJN) | -42.6% | -113.5% | 3.4% | 46.6% | 64.1% |
| Fortinet, Inc. ($FTNT) | 9.2% | 2.1% | 5.3% | 15.0% | 28.0% |
| Check Point Software Technologies Ltd. ($CHKP) | 22.2% | 23.7% | 24.7% | 26.8% | 25.5% |
| MAM Software Group, Inc. ($MAMS) | 13.3% | 19.3% | 21.1% | 24.2% | 25.2% |
| Red Hat, Inc. ($RHT) | 15.1% | 14.1% | 14.2% | 16.4% | 22.4% |
| |
|---|
| Median (56 companies) | 0.0% | 0.0% | -4.3% | -4.7% | -1.9% |
|---|
| GlobalSCAPE, Inc. ($GSB) | 21.9% | 27.0% | 18.9% | 8.5% | 19.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| NXT-ID Inc. ($NXTD) | | | | | 9.7x |
| Symantec Corporation ($SYMC) | -3.2x | -1.5x | -5.0x | 10.0x | 4.7x |
| SolarWinds Corporation ($SWI) | | | | 6.2x | 4.1x |
| Oracle Corporation ($ORCL) | 0.4x | 1.2x | 1.6x | 2.4x | 2.4x |
| ServiceNow, Inc. ($NOW) | | | | 9.0x | 0.9x |
| |
|---|
| Median (22 companies) | -2.7x | -1.4x | -1.3x | -0.3x | -0.4x |
|---|
| GlobalSCAPE, Inc. ($GSB) | -2.1x | -2.0x | -1.2x | -2.4x | -1.3x |
