Network-1 Technologies, Inc. reports 86.5% Net Income growth in 2018 and 34.4% Revenue growth
03/29/2019 • About Network-1 Technologies, Inc. (
$NTIP) • By InTwits
Network-1 Technologies, Inc. reported 2018 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Network-1 Technologies, Inc. is a fast growth stock: 2018 revenue growth was 34.4%, 5 year revenue CAGR was 22.5% at 2018 ROIC 16.3%
- The company has highly profitable business model: ROIC is 16.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 34.4%. Revenue growth showed slowdown in 18Q4 - it was -82.4% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.0 pp from 37.8% to 42.8% in 2018.
Gross Margin decreased on 6.3 pp from 69.8% to 63.5% in 2018. SG&A as a % of Revenue decreased on 3.5 pp from 13.7% to 10.2% in 2018.
Net Income margin increased on 9.7 pp from 25.1% to 34.9% in 2018.
Return on investment
The company operates at good ROIC (16.3%) and ROE (13.7%). ROIC increased on 5.0 pp from 11.2% to 16.3% in 2018. ROE increased on 6.0 pp from 7.7% to 13.7% in 2018.
Leverage (Debt)
The company has no debt. Cash dropped on 64.8%.
Valuation and dividends
Network-1 Technologies, Inc.'s trades at EV/EBITDA 4.3x and P/E 7.8x.
Financial and operational results
FY ended 12/31/2018
Network-1 Technologies, Inc. ($NTIP) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 12.309 | 16.565 | 65.088 | 16.451 | 22.106 | 34.4% |
| Gross Profit | 8.799 | 11.059 | 39.294 | 11.481 | 14.034 | 22.2% |
| SG&A | | 2.874 | 2.782 | 2.255 | 2.255 | 0.0% |
| EBITDA | 4.373 | 5.582 | 32.913 | 6.220 | 9.457 | 52.0% |
| Net Income | 1.766 | 4.107 | 23.223 | 4.133 | 7.706 | 86.5% |
Balance Sheet
|
|---|
| Cash | 17.662 | 20.608 | 50.918 | 53.101 | 18.680 | -64.8% |
| 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 | 0.000 | 0.000 | 0.000 | 0.000 | 0.000 | |
Ratios
|
|---|
| Revenue growth | 53.5% | 34.6% | 292.9% | -74.7% | 34.4% | |
| EBITDA growth | 72.6% | 27.6% | 489.6% | -81.1% | 52.0% | |
|
|---|
| Gross Margin | 71.5% | 66.8% | 60.4% | 69.8% | 63.5% | -6.3% |
| EBITDA Margin | 35.5% | 33.7% | 50.6% | 37.8% | 42.8% | 5.0% |
| SG&A, % of revenue | | 17.3% | 4.3% | 13.7% | 10.2% | -3.5% |
| Net Income Margin | 14.3% | 24.8% | 35.7% | 25.1% | 34.9% | 9.7% |
|
|---|
| ROIC | 9.4% | 14.1% | 78.7% | 11.2% | 16.3% | 5.0% |
| ROE | 6.1% | 14.8% | 56.9% | 7.7% | 13.7% | 6.0% |
| Net Debt/EBITDA | -4.0x | -3.7x | -1.5x | -8.5x | -2.0x | 6.6x |
Network-1 Technologies, Inc. ($NTIP) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 19 | 0 | 2 | 0 | | 212.9% | -90.3% | -44.5% | -82.4% |
| EBITDA | 11 | -1 | 0 | -1 | | 231.6% | -139.2% | -77.6% | |
| Net Income | 9 | -1 | 0 | -1 | | 279.2% | -136.5% | -62.0% | |
Balance Sheet
|
|---|
| Cash | 57 | 33 | 27 | 19 | | 18.1% | -36.5% | -48.0% | -64.8% |
| Short Term Debt | 0 | 0 | 0 | 0 | | | | | |
| Long Term Debt | 0 | 0 | 0 | 0 | | | | | |
Ratios
|
|---|
| Gross Margin | 62.7% | 71.8% | 66.9% | 77.5% | | -8.5% | 4.3% | -3.4% | 7.2% |
| EBITDA Margin | 56.3% | -198.5% | 13.3% | -213.9% | | 3.2% | -247.6% | -19.7% | -188.7% |
| Net Income Margin | 44.2% | -119.7% | 13.7% | -154.3% | | 7.7% | -151.5% | -6.3% | -138.9% |
Peers in Communications Equipment
Below you can find Network-1 Technologies, Inc. benchmarking vs. other companies in Communications Equipment 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 |
|---|
| Ribbon Communications Inc. ($RBBN) | | | | 30.6% | 75.2% |
| Extreme Networks, Inc. ($EXTR) | | 6.4% | -4.4% | 13.2% | 64.4% |
| Optical Cable Corporation ($OCC) | | -11.3% | -12.2% | -0.8% | 37.0% |
| ParkerVision Inc ($PRKR) | | | 37,601.2% | -97.5% | 35.0% |
| Arista Networks, Inc. ($ANET) | | 43.4% | 34.8% | 45.8% | 30.7% |
| |
|---|
| Median (66 companies) | | -0.4% | 7.3% | 5.6% | 2.8% |
|---|
| Network-1 Technologies, Inc. ($NTIP) | | 34.6% | 292.9% | -74.7% | 34.4% |
Top companies by Gross margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 82.1% | 82.7% | 83.1% | 83.1% | 83.3% |
| Radware Ltd. ($RDWR) | 82.1% | 82.4% | 81.8% | 81.3% | 82.2% |
| Radcom Ltd. ($RDCM) | 63.2% | 76.8% | 69.6% | 71.8% | 74.0% |
| Casa Systems, Inc. ($CASA) | | 70.8% | 69.1% | 73.4% | 73.4% |
| NetScout Systems, Inc. ($NTCT) | 78.7% | 79.2% | 65.6% | 70.2% | 72.4% |
| |
|---|
| Median (67 companies) | 41.4% | 41.3% | 43.7% | 41.0% | 40.5% |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 71.5% | 66.8% | 60.4% | 69.8% | 63.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| InterDigital, Inc. ($IDCC) | 50.8% | 58.1% | 73.6% | 67.3% | 41.9% |
| EchoStar Corporation ($SATS) | 25.7% | 39.7% | 40.3% | 38.1% | 37.4% |
| Ubiquiti Networks, Inc. ($UBNT) | 34.7% | 25.5% | 37.3% | 34.3% | 32.8% |
| Ituran Location and Control Ltd. ($ITRN) | 32.4% | 30.5% | 29.9% | 29.9% | 30.4% |
| F5 Networks, Inc. ($FFIV) | 31.2% | 31.5% | 30.3% | 29.9% | 30.1% |
| |
|---|
| Median (65 companies) | 5.3% | 4.7% | 5.5% | 6.0% | 4.6% |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 35.5% | 33.7% | 50.6% | 37.8% | 42.8% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Resonant Inc. ($RESN) | | | 132.5% | 124.8% | 245.2% |
| ViaSat, Inc. ($VSAT) | 22.8% | 26.5% | 26.7% | 33.0% | 32.1% |
| Applied Optoelectronics, Inc. ($AAOI) | 31.5% | 30.1% | 19.0% | 17.5% | 26.9% |
| EchoStar Corporation ($SATS) | 19.7% | 43.8% | 39.9% | 30.9% | 26.5% |
| Finisar Corporation ($FNSR) | 11.3% | 11.9% | 9.4% | 9.7% | 16.8% |
| |
|---|
| Median (65 companies) | 2.3% | 2.3% | 2.0% | 1.9% | 1.7% |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 0.0% | 0.0% | 0.0% | 0.0% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| F5 Networks, Inc. ($FFIV) | 33.9% | 40.8% | 43.1% | 46.9% | 47.9% |
| Ubiquiti Networks, Inc. ($UBNT) | 61.4% | 31.5% | 41.5% | 38.5% | 39.1% |
| Motorola Solutions, Inc. ($MSI) | -16.1% | 18.9% | 26.4% | 39.5% | 35.3% |
| Ituran Location and Control Ltd. ($ITRN) | 50.9% | 46.8% | 50.1% | 48.5% | 35.1% |
| Casa Systems, Inc. ($CASA) | | | 43.2% | 39.7% | 21.9% |
| |
|---|
| Median (70 companies) | 1.2% | 2.0% | 2.2% | 2.1% | 0.3% |
|---|
| Network-1 Technologies, Inc. ($NTIP) | 9.4% | 14.1% | 78.7% | 11.2% | 16.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| Extreme Networks, Inc. ($EXTR) | | | -2.2x | -1.5x | 7.1x |
| ViaSat, Inc. ($VSAT) | 3.4x | 2.5x | 3.2x | 2.5x | 5.8x |
| CommScope Holding Company, Inc. ($COMM) | 2.3x | 9.6x | 4.3x | 4.6x | 4.4x |
| Inseego Corp. ($INSG) | | | | | 3.9x |
| Finisar Corporation ($FNSR) | -0.3x | 0.2x | -0.5x | 1.6x | 3.8x |
| |
|---|
| Median (45 companies) | -0.7x | -0.6x | -0.8x | -0.6x | 0.2x |
|---|
| Network-1 Technologies, Inc. ($NTIP) | -4.0x | -3.7x | -1.5x | -8.5x | -2.0x |
