MGT Capital Investments Inc reports 72.0% CAPEX growth in 2018 while 35.2% Revenue decline
04/16/2019 • About MGT Capital Investments Inc (
$MGTI) • By InTwits
MGT Capital Investments 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: -1,016.4%
- MGT Capital Investments Inc motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2014-2018 was 0.0% while average EBITDA Margin was -1,186.0% for the sames years
- MGT Capital Investments Inc has high CAPEX intensity: 5 year average CAPEX/Revenue was 146.4%. At the same time it's a lot of higher than industry average of 13.3%.
- CAPEX is quite volatile: $7m in 2018, $4m in 2017, $1m in 2016, $0m in 2015, $0m in 2014
- The company has unprofitable business model: ROIC is -403.8%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.1x while industry average is -2.2x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 35.2%. Revenue decline showed acceleration in 18Q4 - it was 96.0% YoY. During the last 5 years Revenue growth topped in 2017 at 901%. Revenue decline was worsened by EBITDA margin decline. EBITDA Margin dropped on 362 pp from -654% to -1,016% in 2018.
Gross Margin dropped on 159 pp from 52.1% to -106% in 2018. SG&A as a % of Revenue dropped on 86.8 pp from 721% to 634% in 2018.
Net Income margin jumped on 434 pp from -1,609% to -1,175% in 2018.
Investments (CAPEX, working capital and M&A)
In 2018 the company had CAPEX/Revenue of 345%. MGT Capital Investments Inc showed fast CAPEX/Revenue growth of 308 pp from 36.5% in 2015 to 345% in 2018. Average CAPEX/Revenue for the last three years was 232%.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.1x and Debt / EBITDA is . Net Debt / EBITDA didn't change in 2018. Debt jumped while cash dropped on 99.0%.
MGT Capital Investments Inc has short term refinancing risk: cash is only 5.2% of short term debt.
Financial and operational results
FY ended 12/31/2018
MGT Capital Investments Inc ($MGTI) key annual financial indicators| mln. $ | 2014 | 2015 | 2016 | 2017 | 2018 | 2018/2017 |
|---|
P&L
|
|---|
| Revenue | 0.094 | 0.104 | 0.313 | 3.134 | 2.030 | -35.2% |
| Gross Profit | | 0.099 | 0.104 | 1.632 | -2.161 | -232.4% |
| SG&A | | 2.821 | 17.874 | 22.591 | 12.871 | -43.0% |
| EBITDA | -3.666 | -2.481 | -20.027 | -20.497 | -20.632 | |
| Net Income | -5.330 | -4.781 | -24.523 | -50.433 | -23.849 | |
Balance Sheet
|
|---|
| Cash | 0.648 | 0.359 | 0.345 | 9.519 | 0.096 | -99.0% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 1.851 | |
| Long Term Debt | 0.000 | 0.000 | 2.300 | 0.000 | 0.000 | |
Cash flow
|
|---|
| Capex | 0.000 | 0.038 | 0.693 | 4.067 | 6.994 | 72.0% |
Ratios
|
|---|
| Revenue growth | -76.3% | 10.6% | 201.0% | 901.3% | -35.2% | |
| EBITDA growth | -59.8% | -32.3% | 707.2% | 2.3% | 0.7% | |
|
|---|
| Gross Margin | | 95.2% | 33.2% | 52.1% | -106.5% | -158.5% |
| EBITDA Margin | -3,900.0% | -2,385.6% | -6,398.4% | -654.0% | -1,016.4% | -362.3% |
| SG&A, % of revenue | | 2,712.5% | 5,710.5% | 720.8% | 634.0% | -86.8% |
| Net Income Margin | -5,670.2% | -4,597.1% | -7,834.8% | -1,609.2% | -1,174.8% | 434.4% |
| CAPEX, % of revenue | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% | 214.8% |
|
|---|
| ROIC | -36.2% | -35.5% | -521.7% | -318.0% | -403.8% | -85.8% |
| ROE | -54.3% | -64.2% | | | | |
MGT Capital Investments Inc ($MGTI) key quoterly financial indicators
| mln. $ | 18Q1 | 18Q2 | 18Q3 | 18Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1 | 0 | 1 | 0 | | 206.4% | 5.4% | 14.4% | -96.0% |
| EBITDA | -4 | -6 | -6 | -5 | | | | | |
| Net Income | -5 | -7 | -8 | -5 | | | | | |
Balance Sheet
|
|---|
| Cash | 0 | 2 | 0 | 0 | | 38.0% | 611.5% | 539.5% | -99.0% |
| Short Term Debt | 0 | 4 | 0 | 2 | | -100.0% | 636.9% | -100.0% | |
| Long Term Debt | 0 | 0 | 0 | 0 | | -100.0% | -100.0% | -100.0% | |
Ratios
|
|---|
| Gross Margin | 7.8% | -148.2% | -149.6% | -985.5% | | -27.7% | -199.7% | -178.7% | -1,046.5% |
| EBITDA Margin | -392.8% | -1,388.8% | -1,019.5% | -6,831.6% | | 505.9% | -362.5% | 795.2% | -6,604.1% |
| Net Income Margin | -475.8% | -1,590.5% | -1,319.7% | -6,607.9% | | 1,412.3% | -499.0% | 1,877.2% | -5,365.4% |
Peers in Application Software
Below we provide MGT Capital Investments Inc 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 ($INS) | | 14.2% | 71.0% | 12.2% | 119.0% |
| |
|---|
| Median (152 companies) | | 14.0% | 13.6% | 14.8% | 15.2% |
|---|
| MGT Capital Investments Inc ($MGTI) | | 10.6% | 201.0% | 901.3% | -35.2% |
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. ($AZPN) | 86.5% | 88.7% | 89.7% | 90.2% | 89.9% |
| |
|---|
| Median (151 companies) | 63.2% | 61.7% | 64.2% | 64.6% | 66.0% |
|---|
| MGT Capital Investments Inc ($MGTI) | | 95.2% | 33.2% | 52.1% | -106.5% |
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. ($ADBE) | 17.5% | 25.9% | 31.2% | 34.2% | 35.3% |
| |
|---|
| Median (153 companies) | -10.1% | -9.4% | -4.7% | -3.3% | -3.3% |
|---|
| MGT Capital Investments Inc ($MGTI) | -3,900.0% | -2,385.6% | -6,398.4% | -654.0% | -1,016.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2014 | FY2015 | FY2016 | FY2017 | FY2018 |
|---|
| TimefireVR Inc ($TFVR) | 0.0% | 350.5% | 4.3% | | 1,021.9% |
| Integrated Ventures Inc ($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% |
| Veritone, Inc. ($VERI) | | 0.2% | 0.4% | 4.6% | 13.7% |
| |
|---|
| Median (154 companies) | 2.8% | 2.7% | 2.9% | 2.3% | 2.4% |
|---|
| MGT Capital Investments Inc ($MGTI) | 0.0% | 36.5% | 221.4% | 129.8% | 344.5% |
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. ($PAYC) | 16.7% | 30.5% | 75.4% | 51.1% | 47.5% |
| |
|---|
| Median (180 companies) | -14.2% | -11.2% | -9.2% | -10.2% | -9.8% |
|---|
| MGT Capital Investments Inc ($MGTI) | -36.2% | -35.5% | -521.7% | -318.0% | -403.8% |
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 |
|---|
