eGain Corporation Net Income surged on 309% and Revenue increased on 9.7%
09/03/2019 • About eGain Corporation (
$EGAN) • By InTwits
eGain Corporation reported FY2019 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 9.4% in FY2019 vs. 2.7% in FY2018 vs. -6.9% in FY2015
- EBITDA Margin is quite volatile: 9.4% in FY2019, 2.7% in FY2018, -0.9% in FY2017, -1.5% in FY2016, -6.9% in FY2015
- eGain Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.7%.
- The company has highly profitable business model: ROIC is 43.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
EGain Corporation's Revenue increased on 9.7%. Revenue growth showed small slowdown in FY19Q4 - it was 9.1% YoY. During the last 5 years Revenue growth bottomed in FY2017 at -16.1% and was accelerating since that time. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 2.6 pp from 41.8% to 39.2% in FY2019. EBITDA Margin followed a growing trend at 3.7 pp per annum in the last 5 years.
Gross Margin increased on 3.9 pp from 63.6% to 67.5% in FY2019. SG&A as a % of Revenue decreased on 3.3 pp from 41.2% to 37.9% in FY2019. SG&A as a % of Revenue stuck to a declining trend at -4.5 pp per annum in FY2015-FY2019.
Net Income margin increased on 9.4 pp from -3.2% to 6.2% in FY2019. Net Income margin grew at 5.1 pp per annum in FY2015-FY2019.
Investments (CAPEX, working capital and M&A)
In FY2019 eGain Corporation had CAPEX/Revenue of 0.59%. The company showed almost no change in CAPEX/Revenue from FY2016 to FY2019. It's average level of CAPEX/Revenue for the last three years was 0.55%.
Leverage (Debt)
The company paid down all the debt in FY2019. Cash jumped on 177%.
Valuation and dividends
The company's trades at EV/EBITDA 30.8x and P/E 54.4x.
Management team
eGain Corporation's CFO is Eric N Smit. Eric N Smit has 18 years tenure at the company.
Financial and operational results
FY ended 06/30/2019
eGain Corporation ($EGAN) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 75.913 | 69.375 | 58.215 | 61.307 | 67.232 | 9.7% |
| Gross Profit | 46.772 | 45.686 | 37.016 | 38.971 | 45.391 | 16.5% |
| SG&A | 42.016 | 35.496 | 26.988 | 25.248 | 25.500 | 1.0% |
| EBITDA | -5.267 | -1.035 | -0.526 | 1.650 | 6.322 | 283.2% |
| Net Income | -12.429 | -6.240 | -6.020 | -1.991 | 4.168 | |
Balance Sheet
|
|---|
| Cash | 8.633 | 11.780 | 10.627 | 11.498 | 31.860 | 177.1% |
| Short Term Debt | 0.976 | 1.157 | 0.913 | 0.301 | 0.000 | -100.0% |
| Long Term Debt | 18.554 | 20.376 | 14.844 | 8.941 | 0.000 | -100.0% |
Cash flow
|
|---|
| Capex | 0.741 | 0.547 | 0.492 | 0.137 | 0.398 | 190.5% |
Ratios
|
|---|
| Revenue growth | 8.0% | -8.6% | -16.1% | 5.3% | 9.7% | |
| EBITDA growth | 20,968.0% | -80.3% | -49.2% | -413.7% | 283.2% | |
|
|---|
| Gross Margin | 61.6% | 65.9% | 63.6% | 63.6% | 67.5% | 3.9% |
| EBITDA Margin | -6.9% | -1.5% | -0.9% | 2.7% | 9.4% | 6.7% |
| SG&A, % of revenue | 55.3% | 51.2% | 46.4% | 41.2% | 37.9% | -3.3% |
| Net Income Margin | -16.4% | -9.0% | -10.3% | -3.2% | 6.2% | 9.4% |
| CAPEX, % of revenue | 1.0% | 0.8% | 0.8% | 0.2% | 0.6% | 0.4% |
|
|---|
| ROIC | -75.4% | -30.5% | -30.4% | -27.2% | 43.5% | 70.6% |
| ROE | -599.3% | | | | | |
| Net Debt/EBITDA | | | | -1.4x | -5.0x | -3.7x |
eGain Corporation ($EGAN) key quoterly financial indicators
| mln. $ | FY19Q1 | FY19Q2 | FY19Q3 | FY19Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 16 | 18 | 17 | 17 | | 9.8% | 16.9% | 8.0% | 9.1% |
| EBITDA | 1 | 2 | 2 | 1 | | 130.9% | 638.0% | 83.5% | |
| Net Income | 1 | 2 | 1 | 0 | | | | | |
Balance Sheet
|
|---|
| Cash | 12 | 11 | 31 | 32 | | 11.9% | 2.1% | 183.5% | 178.3% |
| Short Term Debt | 0 | 5 | 0 | 0 | | -100.0% | 426.9% | -100.0% | -100.0% |
| Long Term Debt | 6 | 0 | 0 | 0 | | -32.7% | -100.0% | -100.0% | -100.0% |
Ratios
|
|---|
| Gross Margin | 67.0% | 69.0% | 69.0% | 66.0% | | 4.2% | 5.3% | 3.5% | 3.8% |
| EBITDA Margin | 6.3% | 11.1% | 11.8% | 5.9% | | 3.3% | 9.4% | 4.8% | 6.8% |
| Net Income Margin | 6.3% | 11.1% | 5.9% | 0.0% | | 10.1% | 16.2% | 6.5% | 3.4% |
Peers in Application Software
Below you can find eGain Corporation benchmarking vs. other companies in Application Software 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 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| 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 ($INS) | 14.2% | 71.0% | 12.2% | 119.0% | |
| |
|---|
| Median (152 companies) | 13.9% | 14.4% | 15.7% | 15.2% | 10.1% |
|---|
| eGain Corporation ($EGAN) | | | -16.1% | 5.3% | 9.7% |
Top companies by Gross margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Skkynet Cloud Systems Inc ($SKKY) | 97.4% | 98.0% | 97.6% | 96.5% | |
| hopTo Inc ($HPTO) | 87.8% | 95.9% | 98.2% | 95.4% | |
| Aware, Inc. ($AWRE) | 87.2% | 90.3% | 94.6% | 92.3% | |
| Alteryx, Inc. ($AYX) | 80.5% | 81.3% | 83.4% | 91.0% | |
| Aspen Technology, Inc. ($AZPN) | 88.7% | 89.7% | 90.2% | 89.9% | |
| |
|---|
| Median (151 companies) | 63.0% | 63.8% | 64.6% | 66.0% | 47.7% |
|---|
| eGain Corporation ($EGAN) | | 65.9% | 63.6% | 63.6% | 67.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Aspen Technology, Inc. ($AZPN) | 42.2% | 46.0% | 45.2% | 43.3% | |
| ANSYS, Inc. ($ANSS) | 45.8% | 45.1% | 41.9% | 41.4% | |
| Paycom Software, Inc. ($PAYC) | 19.5% | 35.1% | 34.4% | 35.9% | |
| j2 Global, Inc. ($JCOM) | 40.6% | 41.7% | 36.5% | 35.7% | |
| Adobe Inc. ($ADBE) | 25.9% | 31.2% | 34.2% | 35.3% | |
| |
|---|
| Median (153 companies) | -10.7% | -5.3% | -4.2% | -3.3% | 15.6% |
|---|
| eGain Corporation ($EGAN) | | -1.5% | -0.9% | 2.7% | 9.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| TimefireVR Inc ($TFVR) | 350.5% | 4.3% | | 1,021.9% | |
| MGT Capital Investments Inc ($MGTI) | 36.5% | 221.4% | 129.8% | 344.5% | |
| Integrated Ventures Inc ($INTV) | | | | 199.9% | 15.2% |
| ShotSpotter, Inc. ($SSTI) | 18.3% | 28.9% | 27.1% | 24.3% | |
| Ellie Mae, Inc. ($ELLI) | 20.6% | 16.7% | 21.1% | 19.4% | |
| |
|---|
| Median (154 companies) | 2.8% | 3.0% | 2.3% | 2.4% | 3.3% |
|---|
| eGain Corporation ($EGAN) | | 0.8% | 0.8% | 0.2% | 0.6% |
Top companies by ROIC, %
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| InsPro Technologies Corp ($ITCC) | | | | 127.4% | |
| Manhattan Associates, Inc. ($MANH) | 78.7% | 99.3% | 102.5% | 80.9% | |
| Intuit Inc. ($INTU) | 23.7% | 52.1% | 72.6% | 66.8% | |
| Aspen Technology, Inc. ($AZPN) | | | | 58.1% | |
| Paycom Software, Inc. ($PAYC) | 30.5% | 75.4% | 51.1% | 47.5% | |
| |
|---|
| Median (180 companies) | -12.2% | -9.2% | -10.2% | -9.8% | 8.5% |
|---|
| eGain Corporation ($EGAN) | | -30.5% | -30.4% | -27.2% | 43.5% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2015 | FY2016 | FY2017 | FY2018 | FY2019 |
|---|
| Upland Software, Inc. ($UPLD) | | 16.4x | 115.6x | 16.7x | |
| Nuance Communications, Inc. ($NUAN) | 5.7x | 5.3x | 7.1x | 15.2x | |
| Asure Software Inc ($ASUR) | 4.5x | 3.6x | 9.5x | 14.5x | |
| SS&C Technologies Holdings, Inc. ($SSNC) | 7.3x | 4.6x | 3.1x | 8.5x | |
| Avaya Holdings Corp. ($AVYA) | | | | 7.4x | |
| |
|---|
| Median (69 companies) | -0.8x | -0.9x | -0.8x | -0.6x | 0.7x |
|---|
| eGain Corporation ($EGAN) | | | | -1.4x | -5.0x |
