IDT Corporation reports 90.4% EBITDA growth in 2020 and 1.5 pp EBITDA Margin growth from 1.5% to 3.1%
10/01/2020 • About IDT Corporation (
$IDT) • By InTwits
IDT Corporation reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- IDT Corporation is a company in decline: FY2020 revenue growth was -4.5%, 5 years revenue CAGR was -3.4%
- EBITDA Margin is relatively stable: 3.1% in FY2020 vs. 1.5% in FY2019 vs. 3.1% in FY2016
- IDT Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.3%. At the same time it's in pair with industry average of 1.2%
- CAPEX is quite volatile: $0m in FY2020, $1m in FY2019, $2m in FY2018, $0m in FY2017, $0m in FY2016
- The company has highly profitable business model: ROIC is 25.0%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
IDT Corporation's Revenue decreased on 4.5%. Annual revenue decline showed slowdown in FY20Q4 - revenue increased slightly on 1.2%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.5 pp from 1.5% to 3.1% in FY2020.
Gross Margin increased on 2.8 pp from 16.7% to 19.5% in FY2020. During the last 5 years Gross Margin bottomed in FY2017 at 15.1% and was growing since that time. SG&A as a % of Revenue increased slightly on 1.5 pp from 14.5% to 16.0% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue bottomed in FY2017 at 12.5% and was growing since that time.
Net Income margin increased slightly on 1.6 pp from 0.0095% to 1.6% in FY2020. During FY2016-FY2020 Net Income margin bottomed in FY2019 at 0.0095%.
Investments (CAPEX, working capital and M&A)
IDT Corporation's CAPEX/Revenue was 1.2% in FY2020. IDT Corporation's CAPEX/Revenue showed almost no change from FY2017 to FY2020. Average CAPEX/Revenue for the last three years was 1.3%. During the last 5 years CAPEX as a % of Revenue topped in FY2017 at 1.5% and was declining since that time.
Return on investment
The company operates at high and attractive ROIC (25.0%) and ROE (32.7%). ROIC surged on 27.2 pp from -2.2% to 25.0% in FY2020. ROE surged on 32.4 pp from 0.31% to 32.7% in FY2020. During the last 5 years ROE bottomed in FY2019 at 0.31%.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.8x and Debt / EBITDA is 0.2x. Debt jumped while cash increased on 5.9%.
IDT Corporation has no short term refinancing risk: cash is higher than short term debt (3,611.1%).
Valuation and dividends
The company's trades at EV/EBITDA 4.5x and P/E 12.2x.
Management team
Shmuel Jonas is a the company's CEO. Shmuel Jonas has spent 6 years with the company. The company's CFO is David A Polinsky. David A Polinsky has 2 years tenure at the company.
Financial and operational results
FY ended 07/31/2020
IDT Corporation ($IDT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1,496 | 1,502 | 1,547 | 1,409 | 1,346 | -4.5% |
| Gross Profit | 250 | 226 | 241 | 235 | 262 | 11.3% |
| SG&A | 205 | 188 | 203 | 204 | 215 | 5.1% |
| EBITDA | 47 | 27 | 31 | 22 | 41 | 90.4% |
| Net Income | 24 | 8 | 4 | 0 | 21 | 15,892.5% |
Balance Sheet
|
|---|
| Cash | 110 | 90 | 68 | 80 | 85 | 5.9% |
| Short Term Debt | 0 | 0 | 0 | 0 | 2 | |
| Long Term Debt | 0 | 0 | 0 | 0 | 7 | |
Cash flow
|
|---|
| Capex | 18 | 23 | 21 | 19 | 16 | -14.1% |
Ratios
|
|---|
| Revenue growth | -6.3% | 0.4% | 3.0% | -8.9% | -4.5% | |
| EBITDA growth | -58.1% | -41.7% | 14.4% | -30.6% | 90.4% | |
|
|---|
| Gross Margin | 16.7% | 15.1% | 15.6% | 16.7% | 19.5% | 2.8% |
| EBITDA Margin | 3.1% | 1.8% | 2.0% | 1.5% | 3.1% | 1.5% |
| SG&A, % of revenue | 13.7% | 12.5% | 13.1% | 14.5% | 16.0% | 1.5% |
| Net Income Margin | 1.6% | 0.5% | 0.3% | 0.0% | 1.6% | 1.6% |
| CAPEX, % of revenue | 1.2% | 1.5% | 1.3% | 1.3% | 1.2% | -0.1% |
|
|---|
| ROIC | 18.9% | 3.9% | 8.7% | -2.2% | 25.0% | 27.2% |
| ROE | 18.3% | 6.1% | 4.8% | 0.3% | 32.7% | 32.4% |
| Net Debt/EBITDA | -2.3x | -3.3x | -2.2x | -3.7x | -1.8x | 1.9x |
IDT Corporation ($IDT) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 340 | 324 | 321 | 360 | | -6.1% | -7.3% | -5.8% | 1.2% |
| EBITDA | 5 | 7 | 10 | 20 | | -20.1% | 36.1% | 63.0% | - |
| Net Income | -2 | 1 | 1 | 21 | | - | - | -76.1% | - |
Balance Sheet
|
|---|
| Cash | 62 | 61 | 52 | 85 | | 4.8% | -17.9% | -34.7% | 5.9% |
| Short Term Debt | 2 | 2 | 2 | 2 | | - | - | - | - |
| Long Term Debt | 9 | 9 | 8 | 7 | | - | - | - | - |
Ratios
|
|---|
| Gross Margin | 17.9% | 18.9% | 19.4% | 21.5% | | 2.0% | 2.2% | 2.3% | 4.4% |
| EBITDA Margin | 1.4% | 2.2% | 3.0% | 5.4% | | -0.2% | 0.7% | 1.3% | 5.7% |
| Net Income Margin | -0.4% | 0.3% | 0.2% | 6.0% | | 0.2% | 0.7% | -0.5% | 6.7% |
Peers in Integrated Telecommunication S
Below we provide IDT Corporation benchmarking against other companies in Integrated Telecommunication S 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.
