eGain Corporation Net Income surged on 72.9% and EBITDA Margin increased on 3.1 pp from 9.4% to 12.5%
09/02/2020 • About eGain Corporation (
$EGAN) • By InTwits
eGain Corporation reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 12.5% in FY2020 vs. 9.4% in FY2019 vs. -1.5% in FY2016
- EBITDA Margin is quite volatile: 12.5% in FY2020, 9.4% in FY2019, 2.7% in FY2018, -0.9% in FY2017, -1.5% in FY2016
- eGain Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has highly profitable business model: ROIC is 24.1%
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 8.2%. Revenue growth showed acceleration in FY20Q4 - it increased 11.9% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 3.1 pp from 9.4% to 12.5% in FY2020. EBITDA Margin stuck to a growing trend at 3.8 pp per annum in the last 5 years.
Gross Margin increased on 3.5 pp from 67.5% to 71.0% in FY2020. During FY2016-FY2020 Gross Margin bottomed in FY2018 at 63.6% and was growing since that time. SG&A as a % of Revenue showed almost no change in FY2020. SG&A as a % of Revenue followed a declining trend at -3.5 pp per annum in the last 5 years.
Net Income margin increased on 3.7 pp from 6.2% to 9.9% in FY2020. Net Income margin stuck to a growing trend at 5.4 pp per annum in FY2016-FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 0.71% in FY2020. CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 0.51%.
Return on investment
The company operates at high and attractive ROIC (24.1%) and ROE (24.5%). ROIC dropped on 19.4 pp from 43.5% to 24.1% in FY2020. During the last 5 years ROIC topped in FY2019 at 43.5%.
Leverage (Debt)
Debt level is -4.8x Net Debt / EBITDA and 0.3x Debt / EBITDA. Debt jumped while cash jumped on 46.3%.
eGain Corporation has no short term refinancing risk: cash is higher than short term debt (2,658.8%).
Valuation and dividends
eGain Corporation's trades at EV/EBITDA 38.9x and P/E 55.1x.
Management team
Eric N Smit is a the company's CFO. Eric N Smit has spent 18 years at the company.
Financial and operational results
FY ended 06/30/2020
eGain Corporation ($EGAN) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 69.375 | 58.215 | 61.307 | 67.232 | 72.729 | 8.2% |
| Gross Profit | 45.686 | 37.016 | 38.971 | 45.391 | 51.648 | 13.8% |
| SG&A | 35.496 | 26.988 | 25.248 | 25.500 | 27.604 | 8.3% |
| EBITDA | -1.035 | -0.526 | 1.650 | 6.322 | 9.086 | 43.7% |
| Net Income | -6.240 | -6.020 | -1.991 | 4.168 | 7.208 | 72.9% |
Balance Sheet
|
|---|
| Cash | 11.780 | 10.627 | 11.498 | 31.860 | 46.609 | 46.3% |
| Short Term Debt | 1.157 | 0.913 | 0.301 | 0.000 | 1.753 | |
| Long Term Debt | 20.376 | 14.844 | 8.941 | 0.000 | 1.385 | |
Cash flow
|
|---|
| Capex | 0.547 | 0.492 | 0.137 | 0.398 | 0.514 | 29.1% |
Ratios
|
|---|
| Revenue growth | -8.6% | -16.1% | 5.3% | 9.7% | 8.2% | |
| EBITDA growth | -80.3% | -49.2% | -413.7% | 283.2% | 43.7% | |
|
|---|
| Gross Margin | 65.9% | 63.6% | 63.6% | 67.5% | 71.0% | 3.5% |
| EBITDA Margin | -1.5% | -0.9% | 2.7% | 9.4% | 12.5% | 3.1% |
| SG&A, % of revenue | 51.2% | 46.4% | 41.2% | 37.9% | 38.0% | 0.0% |
| Net Income Margin | -9.0% | -10.3% | -3.2% | 6.2% | 9.9% | 3.7% |
| CAPEX, % of revenue | 0.8% | 0.8% | 0.2% | 0.6% | 0.7% | 0.1% |
|
|---|
| ROIC | -30.5% | -30.4% | -27.2% | 43.5% | 24.1% | -19.4% |
| ROE | | | | | 24.5% | |
| Net Debt/EBITDA | | | -1.4x | -5.0x | -4.8x | 0.3x |
eGain Corporation ($EGAN) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 17 | 18 | 18 | 19 | | 7.4% | 0.9% | 8.0% | 11.9% |
| EBITDA | 2 | 2 | 2 | 3 | | 51.7% | 21.3% | 8.7% | 170.4% |
| Net Income | 1 | 2 | 2 | 2 | | 21.7% | -1.4% | 86.7% | - |
Balance Sheet
|
|---|
| Cash | 34 | 40 | 41 | 47 | | 186.4% | 266.5% | 31.2% | 45.7% |
| Short Term Debt | 2 | 2 | 2 | 2 | | - | -66.0% | - | - |
| Long Term Debt | 3 | 2 | 2 | 1 | | -55.8% | - | - | - |
Ratios
|
|---|
| Gross Margin | 69.1% | 71.1% | 70.0% | 73.6% | | 2.1% | 2.1% | 1.0% | 7.6% |
| EBITDA Margin | 8.8% | 13.4% | 11.9% | 14.2% | | 2.6% | 2.2% | 0.1% | 8.3% |
| Net Income Margin | 7.1% | 10.9% | 10.2% | 11.3% | | 0.8% | -0.2% | 4.3% | 11.3% |
Peers in Application Software
Below we provide eGain Corporation 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
| AudioEye, Inc. ($AEYE) | - | 175.5% | 106.6% | 90.2% | 90.2% |
| Cloudera, Inc. ($CLDR) | - | 57.2% | 42.6% | 28.9% | 65.5% |
| Integrated Ventures Inc ($INTV) | - | - | - | -8.9% | 62.7% |
| Smartsheet Inc. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| eGain Corporation ($EGAN) | - | -16.1% | 5.3% | 9.7% | 8.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Aware, Inc. ($AWRE) | 90.3% | 94.6% | 92.3% | 89.7% | 92.8% |
| Alteryx, Inc. ($AYX) | 81.3% | 83.4% | 91.0% | 90.6% | 91.1% |
| Autodesk, Inc. ($ADSK) | 85.2% | 83.2% | 85.2% | 88.9% | 90.1% |
| Smith Micro Software, Inc. ($SMSI) | 73.2% | 77.9% | 83.5% | 90.9% | 89.9% |
| Cadence Design Systems, Inc. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.6% | 66.0% | 68.4% | 69.4% |
|---|
| eGain Corporation ($EGAN) | 65.9% | 63.6% | 63.6% | 67.5% | 71.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
| j2 Global, Inc. ($JCOM) | 41.7% | 36.5% | 35.7% | 38.6% | 40.5% |
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
| Adobe Inc. ($ADBE) | 31.2% | 34.2% | 35.3% | 35.8% | 39.7% |
| SS&C Technologies Holdings, Inc. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| eGain Corporation ($EGAN) | -1.5% | -0.9% | 2.7% | 9.4% | 12.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
| Integrated Ventures Inc ($INTV) | - | - | 199.9% | 15.2% | 27.2% |
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
| LivePerson, Inc. ($LPSN) | 5.5% | 7.9% | 8.8% | 16.3% | 11.4% |
| PROS Holdings, Inc. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| eGain Corporation ($EGAN) | 0.8% | 0.8% | 0.2% | 0.6% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
| Manhattan Associates, Inc. ($MANH) | 99.3% | 102.5% | 80.9% | 71.7% | 53.4% |
| Citrix Systems, Inc. ($CTXS) | 16.1% | 16.7% | 25.2% | 29.8% | 33.5% |
| Sonic Foundry, Inc. ($SOFO) | -18.1% | -50.6% | -786.4% | - | 31.3% |
| Paycom Software, Inc. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.5% | -2.2% |
|---|
| eGain Corporation ($EGAN) | -30.5% | -30.4% | -27.2% | 43.5% | 24.1% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($DBX) | - | -3.8x | - | 2.4x | 1,341.0x |
| Avaya Holdings Corp. ($AVYA) | - | - | 7.4x | - | 77.9x |
| Alteryx, Inc. ($AYX) | - | - | 2.5x | 6.1x | 32.2x |
| Five9, Inc. ($FIVN) | -6.7x | -8.6x | 7.3x | 5.3x | 17.6x |
| Synchronoss Technologies, Inc. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.6x | 0.4x | 0.3x |
|---|
| eGain Corporation ($EGAN) | - | - | -1.4x | -5.0x | -4.8x |
