Model N, Inc. revenue jumped on 14.0% and EBITDA Margin increased on 5.4 pp from -4.6% to 0.84%
11/10/2020 • About Model N, Inc. (
$MODN) • By InTwits
Model N, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- Model N, Inc. is a growth stock: FY2020 revenue growth was 14.0%, 5 year revenue CAGR was 11.4% at FY2020 ROIC -3.9%
- EBITDA Margin is expanding: 0.8% in FY2020 vs. -4.6% in FY2019 vs. -25.1% in FY2016
- Model N, Inc. spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 is 0.0%. Average EBITDA Margin for the same period was -10.8%
- Model N, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has unprofitable business model: ROIC is -3.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Model N, Inc.'s Revenue surged on 14.0%. Revenue growth showed small slowdown in FY20Q4 - it was 13.3% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 5.4 pp from -4.6% to 0.84% in FY2020. EBITDA Margin followed a growing trend at 7.0 pp per annum in the last 5 years.
Gross Margin increased on 6.2 pp from 53.2% to 59.3% in FY2020. SG&A as a % of Revenue showed almost no change in FY2020. SG&A as a % of Revenue declined at -4.9 pp per annum in FY2016-FY2020.
Net Income margin increased on 5.2 pp from -13.7% to -8.5% in FY2020. Net Income margin stuck to a growing trend at 6.1 pp per annum in FY2016-FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 Model N, Inc. had CAPEX/Revenue of 0.36%. The company's CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 0.24%. During FY2016-FY2020 CAPEX as a % of Revenue bottomed in FY2018 at 0.16% and was growing since that time.
Return on investment
The company operates at negative ROIC (-3.9%) and ROE (-15.4%). ROIC jumped on 11.8 pp from -15.7% to -3.9% in FY2020. ROE surged on 26.2 pp from -41.6% to -15.4% in FY2020. ROIC stuck to a growing trend at 11.1 pp per annum in FY2016-FY2020. During FY2016-FY2020 ROE bottomed in FY2017 at -73.6% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is -61.1x and Debt / EBITDA is 87.3x. Debt jumped on 166% while cash jumped on 230%.
Model N, Inc. has no short term refinancing risk: cash is higher than short term debt (13,732.3%).
Management team
Jason Blessing is a the company's CEO. Jason Blessing has spent 2 years with the company.
Financial and operational results
FY ended 09/30/2020
Model N, Inc. ($MODN) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 107.0 | 131.2 | 154.6 | 141.2 | 161.1 | 14.0% |
| Gross Profit | 53.3 | 70.1 | 89.3 | 75.1 | 95.6 | 27.2% |
| SG&A | 62.3 | 77.6 | 77.7 | 60.1 | 67.8 | 12.8% |
| EBITDA | -26.8 | -30.4 | -12.5 | -6.4 | 1.4 | |
| Net Income | -33.1 | -39.5 | -28.2 | -19.3 | -13.7 | |
Balance Sheet
|
|---|
| Cash | 66.1 | 57.6 | 56.7 | 60.8 | 200.5 | 229.9% |
| Short Term Debt | 0.0 | 4.8 | 1.4 | 4.9 | 1.5 | -70.3% |
| Long Term Debt | 0.0 | 52.5 | 52.3 | 39.4 | 116.5 | 195.9% |
Cash flow
|
|---|
| Capex | 3.2 | 0.7 | 0.3 | 0.3 | 0.6 | 106.8% |
Ratios
|
|---|
| Revenue growth | 14.1% | 22.6% | 17.9% | -8.7% | 14.0% | |
| EBITDA growth | 78.0% | 13.5% | -59.0% | -48.4% | -121.0% | |
|
|---|
| Gross Margin | 49.8% | 53.4% | 57.7% | 53.2% | 59.3% | 6.2% |
| EBITDA Margin | -25.1% | -23.2% | -8.1% | -4.6% | 0.8% | 5.4% |
| SG&A, % of revenue | 58.3% | 59.2% | 50.2% | 42.6% | 42.1% | -0.5% |
| Net Income Margin | -31.0% | -30.1% | -18.2% | -13.7% | -8.5% | 5.2% |
| CAPEX, % of revenue | 3.0% | 0.6% | 0.2% | 0.2% | 0.4% | 0.2% |
|
|---|
| ROIC | -43.9% | -46.9% | -21.6% | -15.7% | -3.9% | 11.8% |
| ROE | -44.4% | -73.6% | -69.4% | -41.6% | -15.4% | 26.2% |
| Net Debt/EBITDA | | | | | -61.1x |
Model N, Inc. ($MODN) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 38 | 40 | 41 | 41 | | 9.4% | 14.7% | 18.9% | 13.3% |
| EBITDA | 0 | -3 | 2 | 4 | | - | - | - | - |
| Net Income | -3 | -5 | -2 | -4 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 56 | 61 | 192 | 200 | | 6.9% | 13.3% | 228.7% | 229.9% |
| Short Term Debt | 8 | 4 | 2 | 1 | | 368.0% | -25.5% | -57.8% | -70.3% |
| Long Term Debt | 43 | 42 | 114 | 117 | | -17.8% | -5.2% | 158.5% | 195.9% |
Ratios
|
|---|
| Gross Margin | 57.4% | 58.7% | 61.0% | 60.0% | | 4.6% | 6.8% | 6.7% | 6.3% |
| EBITDA Margin | 1.1% | -8.5% | 4.3% | 10.0% | | 3.6% | 1.4% | 5.5% | 14.6% |
| Net Income Margin | -7.8% | -11.6% | -5.8% | -8.8% | | 5.7% | 5.4% | 2.9% | 6.6% |
Peers in Application Software
Below we provide Model N, Inc. 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.5% | 14.7% |
|---|
| Model N, Inc. ($MODN) | - | 22.6% | 17.9% | -8.7% | 14.0% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| Model N, Inc. ($MODN) | 49.8% | 53.4% | 57.7% | 53.2% | 59.3% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 7.7% |
|---|
| Model N, Inc. ($MODN) | -25.1% | -23.2% | -8.1% | -4.6% | 0.8% |
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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Model N, Inc. ($MODN) | 3.0% | 0.6% | 0.2% | 0.2% | 0.4% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| Model N, Inc. ($MODN) | -43.9% | -46.9% | -21.6% | -15.7% | -3.9% |
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. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.3x |
|---|
| Model N, Inc. ($MODN) | - | - | - | - | -61.1x |
