VirnetX Holding Corp revenue decline accelerated to 95.9% in 2018 vs. 0.19% a year earliner
03/18/2019 • About VirnetX Holding Corp (
$VHC) • By InTwits
VirnetX Holding Corp reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- VirnetX Holding Corp is a company in decline: 2018 revenue growth was -95.9%, 5 years revenue CAGR was -50.9%
- The company operates at negative EBITDA Margin: -40,379.4%
- VirnetX Holding Corp spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 is 0.0%. Average EBITDA Margin for the same period was -1,886.4%
- VirnetX Holding Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has unprofitable business model: ROIC is -416.3%
- It operates with medium-size leverage: Net Debt/EBITDA is 2.1x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 95.9%. Annual revenue decline showed slowdown in 18Q4 - revenue dropped on 91.5%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.4 pp from 1.1% to 2.5% in 2018.
SG&A as a % of Revenue surged on 31,818 pp from 1,047% to 32,865% in 2018.
Net Income margin dropped on 39,210 pp from -1,117% to -40,327% in 2018.
Return on investment
The company operates at negative ROIC (-416.3%) and ROE (-444.1%). ROIC dropped on 159 pp from -257% to -416% in 2018. ROE dropped on 172 pp from -272% to -444% in 2018. ROIC stuck to a declining trend at -89.7 pp per annum in 2014-2018. ROE followed a declining trend at -97.8 pp per annum in 2014-2018.
Leverage (Debt)
The company has no debt. Cash surged on 143%.
Management team
Kendall S Larsen is a VirnetX Holding Corp's CEO. Kendall S Larsen is a founder and has spent 11 years with the company. VirnetX Holding Corp's CFO is Richard H Nance. Richard H Nance has 7 years tenure at the company.
Financial and operational results
FY ended 12/31/2018
VirnetX Holding Corp ($VHC) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 1.249 | 1.555 | 1.550 | 1.547 | 0.063 | -95.9% |
| Gross Profit | -4.851 | -3.710 | 0.666 | | | |
| SG&A | 28.310 | 23.190 | 26.672 | 16.194 | 20.705 | 27.9% |
| EBITDA | -12.140 | -29.151 | -28.477 | -17.295 | -25.439 | |
| Net Income | -9.902 | -29.234 | -28.569 | -17.278 | -25.406 | |
Balance Sheet
|
|---|
| Cash | 18.658 | 8.726 | 6.627 | 3.135 | 7.611 | 142.8% |
| 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 | 0.035 | 0.010 | 0.013 | 0.000 | 0.000 | |
Ratios
|
|---|
| Revenue growth | -43.1% | 24.5% | -0.3% | -0.2% | -95.9% | |
| EBITDA growth | -57.5% | 140.1% | -2.3% | -39.3% | 47.1% | |
|
|---|
| Gross Margin | -388.4% | -238.6% | 43.0% | | | |
| EBITDA Margin | -972.0% | -1,874.7% | -1,837.2% | -1,118.0% | -40,379.4% | -39,261.4% |
| SG&A, % of revenue | 2,266.6% | 1,491.3% | 1,720.8% | 1,046.8% | 32,865.1% | 31,818.3% |
| Net Income Margin | -792.8% | -1,880.0% | -1,843.2% | -1,116.9% | -40,327.0% | -39,210.1% |
| CAPEX, % of revenue | 2.8% | 0.6% | 0.8% | 0.0% | 0.0% | |
|
|---|
| ROIC | -36.1% | -120.2% | -210.9% | -256.8% | -416.3% | -159.5% |
| ROE | -29.7% | -122.5% | -217.7% | -272.1% | -444.1% | -172.0% |
VirnetX Holding Corp ($VHC) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 0 | 0 | 0 | 0 | | -98.4% | -96.0% | -98.1% | -91.5% |
| EBITDA | -8 | -6 | -5 | -6 | | | | | |
| Net Income | -8 | -6 | -5 | -6 | | | | | |
Balance Sheet
|
|---|
| Cash | 6 | 4 | 11 | 8 | | 53.6% | 79.4% | 591.9% | 142.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| EBITDA Margin | -126,700.0% | -40,362.5% | -70,628.6% | -18,926.5% | | -125,660.8% | -39,401.6% | -69,680.3% | -17,421.0% |
| Net Income Margin | -126,750.0% | -40,312.5% | -70,485.7% | -18,873.5% | | -125,711.6% | -39,353.4% | -69,538.5% | -17,368.8% |
Peers in Application Software
Below we provide VirnetX Holding Corp 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (151 companies) | -43.3% | 13.5% | 14.3% | 15.7% | 15.2% |
|---|
| VirnetX Holding Corp ($VHC) | | 24.5% | -0.3% | -0.2% | -95.9% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (151 companies) | 63.4% | 61.9% | 64.2% | 64.4% | 66.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Aspen Technology, Inc. ($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% | -3.2% |
|---|
| VirnetX Holding Corp ($VHC) | -972.0% | -1,874.7% | -1,837.2% | -1,118.0% | -40,379.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($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% |
|---|
| VirnetX Holding Corp ($VHC) | 2.8% | 0.6% | 0.8% | 0.0% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InsPro Technologies Corp ($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% | -9.2% | -10.2% | -9.3% |
|---|
| VirnetX Holding Corp ($VHC) | -36.1% | -120.2% | -210.9% | -256.8% | -416.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Upland Software, Inc. ($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 | -1.0x | -0.9x | -0.8x | -0.7x |
|---|
