Sapiens International Corporation N.V. Net Income surged on 90.4% and Revenue surged on 12.4%
02/24/2020 • About Sapiens International Corporation N.V. (
$SPNS) • By InTwits
Sapiens International Corporation N.V. reported 2019 financial results today. Here are the key drivers of the company's long term financial model:
- Sapiens International Corporation N.V. is a fast growth stock: 2019 revenue growth was 12.4%, 5 year revenue CAGR was 15.6% at 2019 ROIC 14.2%
- EBITDA Margin is quite volatile: 19.1% in 2019, 14.8% in 2018, 6.3% in 2017, 16.1% in 2016, 18.3% in 2015
- Sapiens International Corporation N.V. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 3.5%
- CAPEX is quite volatile: $11m in 2019, $2m in 2018, $3m in 2017, $5m in 2016, $3m in 2015
- The company has highly profitable business model: ROIC is 14.2%
- It operates with medium-size leverage: Net Debt/EBITDA is 0.9x while industry average is -2.1x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sapiens International Corporation N.V.'s Revenue surged on 12.4%. Revenue growth showed acceleration in 19Q4 - it increased 18.7% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin dropped on 108 pp from -70.6% to -178% in FY2019. During the last 5 years EBITDA Margin bottomed in 2017 at 6.3% and was growing since that time.
Gross Margin increased slightly on 1.9 pp from 37.8% to 39.8% in 2019. During the last 5 years Gross Margin bottomed in 2017 at 34.7% and was growing since that time. SG&A as a % of Revenue decreased slightly on 1.3 pp from 18.0% to 16.7% in 2019.
Net Income margin increased on 3.3 pp from 4.8% to 8.1% in 2019. During 2015-2019 Net Income margin bottomed in 2017 at 0.13% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 3.5% in 2019. CAPEX/Revenue increased slightly on 1.4 pp from 2.2% in 2016 to 3.5% in 2019. Average CAPEX/Revenue for the last three years was 1.7%.
Return on investment
The company operates at good ROIC (14.2%) and ROE (12.4%). ROIC increased on 3.5 pp from 10.7% to 14.2% in 2019. ROE increased on 5.5 pp from 6.9% to 12.4% in 2019. During 2015-2019 ROIC bottomed in 2017 at 0.49% and was growing since that time. During 2015-2019 ROE bottomed in 2017 at 0.18% and was growing since that time.
Leverage (Debt)
Debt level is 0.9x Net Debt / EBITDA and 1.9x Debt / EBITDA. Net Debt / EBITDA jumped on 2.1x from -1.3x to 0.9x in 2019. Debt jumped on 1,117% while cash increased on 2.6%. During the last 5 years Net Debt/EBITDA bottomed in 2017 at -4.2x and was growing since that time.
Sapiens International Corporation N.V. has no short term refinancing risk: cash is higher than short term debt (364.1%).
Valuation and dividends
The company's trades at EV/EBITDA 19.6x and P/E 44.5x.
The company paid 41.9% of Net Income as dividends in 2019.
Management team
Sapiens International Corporation N.V.'s CEO Roni Al-Dor is a founder and has spent 14 years with the company. Roni Giladi is a the company's CFO. Roni Giladi has spent 13 years at the company.
The company has 2,959 employees. Average revenue per employee in 2019 was
$110,062.
Financial and operational results
FY ended 12/31/2019
Sapiens International Corporation N.V. ($SPNS) key annual financial indicators| mln. $ | 2015 | 2016 | 2017 | 2018 | 2019 | 2019/2018 |
|---|
P&L
|
|---|
| Revenue | 185.6 | 216.2 | 269.2 | 289.7 | 325.7 | 12.4% |
| Gross Profit | 74.4 | 85.8 | 93.5 | 109.6 | 129.5 | 18.2% |
| SG&A | 39.9 | 44.5 | 60.6 | 52.1 | 54.3 | 4.1% |
| EBITDA | 34.0 | 34.9 | 16.9 | 42.9 | 62.3 | 45.2% |
| EBIT | | | | | 43.1 | |
| Net Income | 20.0 | 19.3 | 0.4 | 13.8 | 26.2 | 90.4% |
| Stock Based Compensation | | | | | 1.4 | |
Balance Sheet
|
|---|
| Cash | 54.4 | 60.9 | 71.5 | 64.6 | 66.3 | 2.6% |
| Accounts Receivable | | | | | 34.6 | |
| Accounts Payable | | | | | 5.1 | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 9.9 | 18.2 | 84.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 102.2 | |
Cash flow
|
|---|
| Capex | 2.8 | 4.7 | 2.6 | 1.9 | 11.5 | 499.5% |
| Dividends | | | | | 11.0 | |
Ratios
|
|---|
| Revenue growth | 17.9% | 16.5% | 24.5% | 7.6% | 12.4% | |
| EBITDA growth | 43.8% | 2.6% | -51.6% | 154.2% | 45.2% | |
|
|---|
| Gross Margin | 40.1% | 39.7% | 34.7% | 37.8% | 39.8% | 1.9% |
| EBITDA Margin | 18.3% | 16.1% | 6.3% | 14.8% | 19.1% | 4.3% |
| EBIT Margin | | | | | 13.2% |
| SG&A, % of revenue | 21.5% | 20.6% | 22.5% | 18.0% | 16.7% | -1.3% |
| SBC, % of revenue | | | | | 0.4% |
| Net Income Margin | 10.8% | 8.9% | 0.1% | 4.8% | 8.1% | 3.3% |
| CAPEX, % of revenue | 1.5% | 2.2% | 1.0% | 0.7% | 3.5% | 2.9% |
|
|---|
| ROIC | 13.6% | 13.2% | 0.5% | 10.7% | 14.2% | 3.5% |
| ROE | 11.2% | 10.3% | 0.2% | 6.9% | 12.4% | 5.5% |
| Net Debt/EBITDA | -1.6x | -1.7x | -4.2x | -1.3x | 0.9x | 2.1x |
People
|
|---|
| Employees | | | | | 2,959 | |
| Revenue/Employee, th. $ | | | | | 110 | |
Sapiens International Corporation N.V. ($SPNS) key quoterly financial indicators
| mln. $ | 19Q1 | 19Q2 | 19Q3 | 19Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 77 | 80 | 83 | 87 | | 8.5% | 10.9% | 13.3% | 18.7% |
| EBITDA | 13 | 14 | 24 | 15 | | 31.8% | 45.2% | 106.5% | 27.6% |
| Net Income | 5 | 7 | 7 | 7 | | 76.3% | 247.6% | 35.1% | 86.6% |
Balance Sheet
|
|---|
| Cash | 63 | 77 | 73 | 66 | | 2.0% | 30.1% | 13.9% | 2.1% |
| Short Term Debt | 15 | 18 | 18 | 18 | | 51.5% | 81.9% | 81.9% | 81.9% |
| Long Term Debt | 88 | 48 | 106 | 102 | | | | | |
Ratios
|
|---|
| Gross Margin | 39.0% | 40.0% | 40.0% | 40.0% | | 0.9% | 2.8% | 2.0% | 2.0% |
| EBITDA Margin | 16.9% | 17.5% | 28.9% | 17.2% | | 3.0% | 4.1% | 13.0% | 1.2% |
| Net Income Margin | 6.5% | 8.8% | 8.4% | 8.0% | | 2.5% | 6.0% | 1.4% | 2.9% |
Peers in Application Software
Below we provide Sapiens International Corporation N.V. 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 | 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 ($INS) | 14.2% | 71.0% | 12.2% | 119.0% | |
| |
|---|
| Median (152 companies) | 13.9% | 14.3% | 14.8% | 15.2% | 9.3% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | | 16.5% | 24.5% | 7.6% | 12.4% |
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. ($AZPN) | 88.7% | 89.7% | 90.2% | 89.9% | |
| |
|---|
| Median (151 companies) | 63.0% | 64.2% | 64.6% | 66.0% | 52.9% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 40.1% | 39.7% | 34.7% | 37.8% | 39.8% |
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. ($ADBE) | 25.9% | 31.2% | 34.2% | 35.3% | |
| |
|---|
| Median (153 companies) | -11.3% | -5.3% | -4.2% | -3.3% | 12.0% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 18.3% | 16.1% | 6.3% | 14.8% | 19.1% |
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. ($ELLI) | 20.6% | 16.7% | 21.1% | 19.4% | |
| |
|---|
| Median (154 companies) | 2.8% | 3.0% | 2.3% | 2.4% | 3.0% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 1.5% | 2.2% | 1.0% | 0.7% | 3.5% |
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. ($PAYC) | 30.5% | 75.4% | 51.1% | 47.5% | |
| |
|---|
| Median (180 companies) | -13.1% | -9.8% | -11.8% | -10.6% | 8.5% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 13.6% | 13.2% | 0.5% | 10.7% | 14.2% |
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. ($AVYA) | | | | 7.4x | |
| |
|---|
| Median (69 companies) | -0.8x | -0.9x | -0.8x | -0.6x | -0.9x |
|---|
| Sapiens International Corporation N.V. ($SPNS) | -1.6x | -1.7x | -4.2x | -1.3x | 0.9x |
