MACOM Technology Solutions Holdings, Inc. reports 72.5 pp EBITDA Margin growth from -55.2% to 17.3% in 2020 in 2020 and 6.1% Revenue growth
11/05/2020 • About MACOM Technology Solutions Holdings, Inc. (
$MTSI) • By InTwits
MACOM Technology Solutions Holdings, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- MACOM Technology Solutions Holdings, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -0.6% for the sames years
- MACOM Technology Solutions Holdings, Inc. has medium CAPEX intensity: 5 year average CAPEX/Revenue was 6.1%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $18m in FY2020, $38m in FY2019, $53m in FY2018, $33m in FY2017, $31m in FY2016
- The company has potentially unprofitable business model: ROIC is 0.6%
- It operates with high leverage: Net Debt/EBITDA is 6.6x while industry average is 0.3x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
MACOM Technology Solutions Holdings, Inc.'s Revenue increased on 6.1%. Revenue growth showed acceleration in FY20Q4 - it increased 31.2% YoY. During the last 5 years Revenue growth bottomed in FY2018 at -18.4% and was accelerating since that time. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.1 pp from 27.6% to 28.7% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2019 at -55.2%.
Gross Margin increased on 6.8 pp from 44.2% to 51.0% in FY2020. During the last 5 years Gross Margin bottomed in FY2018 at 43.1% and was growing since that time. SG&A as a % of Revenue decreased on 7.2 pp from 30.7% to 23.5% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2019 at 30.7%.
Net Income margin surged on 68.1 pp from -76.8% to -8.7% in FY2020. During the last 5 years Net Income margin bottomed in FY2019 at -76.8%.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 3.3%. CAPEX/Revenue decreased slightly on 1.4 pp from 4.7% in FY2017 to 3.3% in FY2020. It's average CAPEX/Revenue for the last three years was 6.7%.
Return on investment
The company operates at low but positive ROIC (0.6%) and negative ROE (-15.0%). ROIC jumped on 33.1 pp from -32.5% to 0.60% in FY2020. ROE surged on 63.1 pp from -78.1% to -15.0% in FY2020. During the last 5 years ROIC bottomed in FY2019 at -32.5%.
Leverage (Debt)
Debt level is 6.6x Net Debt / EBITDA and 8.0x Debt / EBITDA. Net Debt / EBITDA surged6.6x from to 6.6x in FY2020. Debt increased on 5.2% while cash jumped on 71.4%.
MACOM Technology Solutions Holdings, Inc. has no short term refinancing risk: cash is higher than short term debt (816.5%).
Management team
The company's CEO is Stephen G Daly. Stephen G Daly has 1 year tenure with the company. The company's CFO is John F Kober III. John F Kober III has 1 year tenure at the company.
Financial and operational results
FY ended 10/02/2020
MACOM Technology Solutions Holdings, Inc. ($MTSI) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 544.3 | 698.8 | 570.4 | 499.7 | 530.0 | 6.1% |
| Gross Profit | 281.6 | 326.9 | 245.7 | 220.7 | 270.2 | 22.4% |
| SG&A | 145.4 | 187.9 | 161.7 | 153.3 | 124.3 | -18.9% |
| EBITDA | 83.8 | 76.9 | 6.1 | -276.0 | 91.4 | |
| Net Income | 1.4 | -169.5 | -140.0 | -383.8 | -46.1 | |
Balance Sheet
|
|---|
| Cash | 333.0 | 130.1 | 94.7 | 75.5 | 129.4 | 71.4% |
| Short Term Debt | 7.2 | 7.7 | 7.4 | 8.0 | 15.9 | 98.9% |
| Long Term Debt | 576.3 | 678.7 | 687.4 | 684.8 | 713.0 | 4.1% |
Cash flow
|
|---|
| Capex | 31.3 | 32.8 | 53.0 | 38.0 | 17.6 | -53.7% |
Ratios
|
|---|
| Revenue growth | 29.4% | 28.4% | -18.4% | -12.4% | 6.1% | |
| EBITDA growth | 29.4% | -8.3% | -92.1% | -4,633.6% | -133.1% | |
|
|---|
| Gross Margin | 51.7% | 46.8% | 43.1% | 44.2% | 51.0% | 6.8% |
| EBITDA Margin | 15.4% | 11.0% | 1.1% | -55.2% | 17.3% | 72.5% |
| SG&A, % of revenue | 26.7% | 26.9% | 28.3% | 30.7% | 23.5% | -7.2% |
| Net Income Margin | 0.3% | -24.3% | -24.5% | -76.8% | -8.7% | 68.1% |
| CAPEX, % of revenue | 5.8% | 4.7% | 9.3% | 7.6% | 3.3% | -4.3% |
|
|---|
| ROIC | 1.6% | -1.3% | -7.4% | -32.5% | 0.6% | 33.1% |
| ROE | 0.3% | -27.3% | -19.4% | -78.1% | -15.0% | 63.1% |
| Net Debt/EBITDA | 3.0x | 7.2x | 98.6x | | 6.6x |
MACOM Technology Solutions Holdings, Inc. ($MTSI) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 119 | 126 | 137 | 147 | | -21.0% | -1.6% | 26.7% | 31.2% |
| EBITDA | 12 | 17 | 28 | 34 | | -11.4% | - | - | 335.7% |
| Net Income | -28 | -10 | -25 | 17 | | - | - | - | 115.7% |
Balance Sheet
|
|---|
| Cash | 108 | 121 | 132 | 129 | | 24.2% | 30.3% | 54.7% | 71.4% |
| Short Term Debt | 16 | 16 | 16 | 16 | | 101.9% | 99.2% | 96.1% | 98.9% |
| Long Term Debt | 718 | 715 | 713 | 713 | | 4.3% | 4.3% | 4.1% | 4.1% |
Ratios
|
|---|
| Gross Margin | 48.9% | 50.1% | 51.6% | 52.8% | | -2.0% | 5.5% | 20.4% | 5.6% |
| EBITDA Margin | 10.3% | 13.3% | 20.6% | 23.1% | | 1.1% | 15.6% | 292.7% | 16.2% |
| Net Income Margin | -23.8% | -8.1% | -18.2% | 11.9% | | -8.3% | 27.9% | 281.6% | 4.7% |
Peers in Semiconductors
Below you can find MACOM Technology Solutions Holdings, Inc. benchmarking vs. other companies in Semiconductors 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 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inphi Corporation ($IPHI) | - | 30.8% | -15.4% | 24.2% | 86.8% |
| Sequans Communications S.A. ($SQNS) | - | 5.9% | -16.6% | -23.3% | 65.0% |
| MaxLinear, Inc ($MXL) | - | 8.4% | -8.4% | -17.6% | 50.9% |
| Advanced Micro Devices, Inc. ($AMD) | - | 21.6% | 23.3% | 4.0% | 45.0% |
| Kopin Corporation ($KOPN) | - | 23.0% | -12.1% | 20.7% | 35.9% |
| |
|---|
| Median (43 companies) | 1.2% | 10.9% | 4.9% | -3.0% | 1.0% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | - | 28.4% | -18.4% | -12.4% | 6.1% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| CEVA, Inc. ($CEVA) | 91.6% | 92.1% | 89.8% | 88.4% | 89.3% |
| Universal Display Corporation ($OLED) | 83.9% | 80.8% | 75.5% | 78.5% | 80.1% |
| Rambus, Inc. ($RMBS) | 80.1% | 79.9% | 76.8% | 77.1% | 75.0% |
| Analog Devices, Inc. ($ADI) | 65.1% | 59.9% | 68.3% | 67.0% | 65.9% |
| MoSys, Inc. ($MOSY) | 49.0% | 46.9% | 61.8% | 61.0% | 65.7% |
| |
|---|
| Median (43 companies) | 47.2% | 49.1% | 50.4% | 50.7% | 49.2% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 51.7% | 46.8% | 43.1% | 44.2% | 51.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 43.5% | 46.7% | 48.6% | 47.5% | 47.6% |
| Intel Corp ($INTC) | 35.2% | 41.7% | 45.7% | 45.9% | 46.7% |
| Broadcom Inc. ($AVGO) | 19.9% | 40.4% | 44.2% | 40.9% | 46.2% |
| Universal Display Corporation ($OLED) | 44.8% | 51.6% | 35.3% | 48.0% | 45.9% |
| Analog Devices, Inc. ($ADI) | 36.2% | 32.1% | 43.2% | 42.1% | 42.0% |
| |
|---|
| Median (41 companies) | 9.2% | 10.7% | 9.8% | 13.6% | 17.4% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 15.4% | 11.0% | 1.1% | -55.2% | 17.3% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Micron Technology, Inc. ($MU) | 46.9% | 23.3% | 29.2% | 41.8% | 38.4% |
| Sequans Communications S.A. ($SQNS) | 11.8% | 13.3% | 22.9% | 29.6% | 27.1% |
| Intel Corp ($INTC) | 16.2% | 18.8% | 21.4% | 22.5% | 18.6% |
| First Solar, Inc. ($FSLR) | 7.9% | 17.5% | 33.0% | 21.8% | 15.4% |
| Power Integrations, Inc. ($POWI) | 3.1% | 7.5% | 5.9% | 5.7% | 14.5% |
| |
|---|
| Median (40 companies) | 3.6% | 4.7% | 4.2% | 3.7% | 4.0% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 5.8% | 4.7% | 9.3% | 7.6% | 3.3% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Texas Instruments Incorporated ($TXN) | 34.9% | 43.1% | 47.5% | 39.7% | 38.2% |
| Applied Materials Inc ($AMAT) | 19.0% | 31.2% | 36.4% | 27.7% | 32.1% |
| Advanced Micro Devices, Inc. ($AMD) | -21.7% | 7.3% | 21.6% | 21.5% | 31.8% |
| QUALCOMM Incorporated ($QCOM) | 15.8% | 5.7% | 2.2% | 38.0% | 28.1% |
| NVIDIA Corporation ($NVDA) | 13.1% | 27.3% | 35.3% | 36.9% | 22.7% |
| |
|---|
| Median (45 companies) | 1.5% | 3.2% | 3.0% | 3.8% | 5.5% |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 1.6% | -1.3% | -7.4% | -32.5% | 0.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SunPower Corporation ($SPWR) | - | - | - | - | 8.2x |
| Rambus, Inc. ($RMBS) | -0.1x | -0.1x | - | - | 5.9x |
| Inphi Corporation ($IPHI) | 4.5x | 33.7x | 32.2x | 4.5x | 3.4x |
| Canadian Solar Inc. ($CSIQ) | 11.3x | 6.8x | 2.7x | 3.4x | 3.3x |
| Broadcom Inc. ($AVGO) | 4.0x | 0.9x | 1.4x | 3.0x | 3.1x |
| |
|---|
| Median (31 companies) | -0.0x | 0.4x | 0.3x | 0.5x | 0.1x |
|---|
| MACOM Technology Solutions Holdings, Inc. ($MTSI) | 3.0x | 7.2x | 98.6x | - | 6.6x |
