SilverSun Technologies, Inc. EBITDA dropped on 28.5% and EBITDA Margin decreased slightly on 1.8 pp from 4.5% to 2.7%
03/28/2019 • About SilverSun Technologies, Inc. (
$SSNT) • By InTwits
SilverSun Technologies, Inc. reported 2018 financial results today. Here are the key drivers of the company's long term financial model:
- SilverSun Technologies, Inc. is a fast growth stock: 2018 revenue growth was 17.6%, 5 year revenue CAGR was 18.7% at 2018 ROIC 7.0%
- SilverSun Technologies, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.4%.
- The company has business model with low profitability: ROIC is 7.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
SilverSun Technologies, Inc.'s Revenue jumped on 17.6%. Revenue growth showed acceleration in 18Q4 - it increased 22.5% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 11.4 pp from -33.6% to -44.9% in 2018.
Gross Margin increased slightly on 1.5 pp from 39.8% to 41.3% in 2018. During the last 5 years Gross Margin bottomed in 2016 at 37.3% and was growing since that time. SG&A as a % of Revenue increased on 3.4 pp from 35.0% to 38.4% in 2018.
Net Income margin increased on 2.0 pp from -1.4% to 0.64% in 2018.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.36% in 2018. CAPEX/Revenue showed almost no change from 2015 to 2018. For the last three years the average CAPEX/Revenue was 0.53%.
Return on investment
The company operates at low ROIC (7.0%) and ROE (6.1%). ROIC decreased on 8.9 pp from 15.9% to 7.0% in 2018. ROE surged on 16.7 pp from -10.6% to 6.1% in 2018.
Leverage (Debt)
Debt level is -0.2x Net Debt / EBITDA and 1.5x Debt / EBITDA. Debt jumped on 160% while cash dropped on 15.0%.
SilverSun Technologies, Inc. has no short term refinancing risk: cash is higher than short term debt (370.0%).
Valuation and dividends
SilverSun Technologies, Inc.'s trades at EV/EBITDA 9.9x and P/E 43.0x.
Financial and operational results
FY ended 12/31/2018
SilverSun Technologies, Inc. ($SSNT) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 21.464 | 27.642 | 34.122 | 34.852 | 41.000 | 17.6% |
| Gross Profit | 8.573 | 10.844 | 12.727 | 13.865 | 16.920 | 22.0% |
| SG&A | 7.608 | 9.940 | 10.732 | 12.204 | 15.731 | 28.9% |
| EBITDA | 0.835 | 0.843 | 1.952 | 1.560 | 1.116 | -28.5% |
| Net Income | 0.193 | 0.374 | 3.436 | -0.486 | 0.262 | |
Balance Sheet
|
|---|
| Cash | 1.308 | 1.193 | 1.621 | 2.235 | 1.901 | -15.0% |
| Short Term Debt | 0.240 | 0.390 | 0.401 | 0.352 | 0.514 | 45.8% |
| Long Term Debt | 0.310 | 1.086 | 0.547 | 0.297 | 1.177 | 296.0% |
Cash flow
|
|---|
| Capex | 0.081 | 0.067 | 0.185 | 0.241 | 0.146 | -39.5% |
Ratios
|
|---|
| Revenue growth | 23.4% | 28.8% | 23.4% | 2.1% | 17.6% | |
| EBITDA growth | 49.0% | 0.9% | 131.6% | -20.1% | -28.5% | |
|
|---|
| Gross Margin | 39.9% | 39.2% | 37.3% | 39.8% | 41.3% | 1.5% |
| EBITDA Margin | 3.9% | 3.0% | 5.7% | 4.5% | 2.7% | -1.8% |
| SG&A, % of revenue | 35.4% | 36.0% | 31.5% | 35.0% | 38.4% | 3.4% |
| Net Income Margin | 0.9% | 1.4% | 10.1% | -1.4% | 0.6% | 2.0% |
| CAPEX, % of revenue | 0.4% | 0.2% | 0.5% | 0.7% | 0.4% | -0.3% |
|
|---|
| ROIC | 111.2% | 16.2% | 25.0% | 15.9% | 7.0% | -8.9% |
| ROE | | 47.7% | 105.3% | -10.6% | 6.1% | 16.7% |
| Net Debt/EBITDA | -0.9x | 0.3x | -0.3x | -1.0x | -0.2x | 0.8x |
SilverSun Technologies, Inc. ($SSNT) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 9 | 10 | 11 | 11 | | 16.3% | 13.8% | 17.7% | 22.5% |
| EBITDA | 0 | 0 | 1 | 0 | | -49.7% | -39.5% | -26.8% | 164.1% |
| Net Income | 0 | 0 | 0 | 0 | | -62.1% | -85.7% | -46.2% | |
Balance Sheet
|
|---|
| Cash | 2 | 1 | 2 | 2 | | 32.8% | -25.0% | 8.6% | -15.0% |
| Short Term Debt | 0 | 1 | 1 | 1 | | -31.3% | 48.9% | 47.1% | 45.8% |
| Long Term Debt | 0 | 1 | 1 | 1 | | -47.3% | 249.8% | 304.1% | 296.0% |
Ratios
|
|---|
| Gross Margin | 42.3% | 41.6% | 40.0% | 41.4% | | 0.0% | 1.6% | 0.5% | 3.9% |
| EBITDA Margin | 2.5% | 2.1% | 4.5% | 1.6% | | -3.3% | -1.9% | -2.7% | 0.9% |
| Net Income Margin | 0.6% | 0.2% | 1.5% | 0.1% | | -1.3% | -1.2% | -1.8% | 12.5% |
Peers in Systems Software
Below we provide SilverSun Technologies, 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. ($FNJN) | | -6.2% | 292.3% | 174.6% | 63.0% |
| |
|---|
| Median (48 companies) | | 18.2% | 14.6% | 16.6% | 20.4% |
|---|
| SilverSun Technologies, Inc. ($SSNT) | | 28.8% | 23.4% | 2.1% | 17.6% |
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. ($ATTU) | 90.7% | 84.9% | 83.9% | 84.1% | 87.5% |
| |
|---|
| Median (53 companies) | 77.0% | 75.4% | 73.6% | 74.1% | 75.0% |
|---|
| SilverSun Technologies, Inc. ($SSNT) | 39.9% | 39.2% | 37.3% | 39.8% | 41.3% |
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. ($CA) | 33.9% | 36.7% | 37.2% | 36.1% | 35.3% |
| |
|---|
| Median (47 companies) | -2.4% | -6.6% | -9.8% | -5.4% | -4.7% |
|---|
| SilverSun Technologies, Inc. ($SSNT) | 3.9% | 3.0% | 5.7% | 4.5% | 2.7% |
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. ($ZS) | | 12.5% | 7.8% | 6.5% | 8.0% |
| |
|---|
| Median (48 companies) | 2.9% | 2.2% | 2.1% | 2.4% | 2.6% |
|---|
| SilverSun Technologies, Inc. ($SSNT) | 0.4% | 0.2% | 0.5% | 0.7% | 0.4% |
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. ($RHT) | 15.1% | 14.1% | 14.2% | 16.4% | 22.4% |
| |
|---|
| Median (56 companies) | 0.0% | 0.0% | -4.3% | -4.7% | -1.9% |
|---|
| SilverSun Technologies, Inc. ($SSNT) | 111.2% | 16.2% | 25.0% | 15.9% | 7.0% |
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. ($NOW) | | | | 9.0x | 0.9x |
| |
|---|
| Median (22 companies) | -2.7x | -1.5x | -1.5x | -0.3x | -0.5x |
|---|
| SilverSun Technologies, Inc. ($SSNT) | -0.9x | 0.3x | -0.3x | -1.0x | -0.2x |
