AudioCodes Ltd. EBITDA jumped on 6,256% and EBITDA Margin surged on 18.1 pp from 0.32% to 18.4%
01/26/2021 • About AudioCodes Ltd. (
$AUDC) • By InTwits
AudioCodes Ltd. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is quite volatile: 18.4% in FY2020, 0.3% in FY2019, 10.8% in FY2018, 8.1% in FY2017, 8.0% in FY2016
- AudioCodes Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.9%.
- The company has highly profitable business model: ROIC is 20.8%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 10.2%. Revenue growth showed acceleration in FY20Q4 - it increased 11.1% YoY. During the last 5 years Revenue growth topped in FY2019 at 13.7%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased slightly on 1.1 pp from 27.6% to 28.7% in FY2020.
Gross Margin jumped on 20.4 pp from 47.4% to 67.9% in FY2020. SG&A as a % of Revenue decreased slightly on 2.0 pp from 31.6% to 29.6% in FY2020. SG&A as a % of Revenue declined at -1.7 pp per annum in FY2016-FY2020.
Net Income margin surged on 10.4 pp from 2.0% to 12.3% in FY2020.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 0.69%. AudioCodes Ltd. showed almost no change in CAPEX/Revenue from FY2017 to FY2020. For the last three years the average CAPEX/Revenue was 0.81%.
Return on investment
The company operates at high and attractive ROIC (20.8%) while ROE is a bit lower (18.0%). ROIC surged on 28.5 pp from -7.7% to 20.8% in FY2020. ROE surged on 13.8 pp from 4.3% to 18.0% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.3x and Debt / EBITDA is 0.7x. Debt dropped on 15.7% while cash dropped on 36.8%.
AudioCodes Ltd. has no short term refinancing risk: cash is higher than short term debt (394.4%).
Valuation and dividends
The company's trades at EV/EBITDA 25.7x and P/E 38.7x.
Financial and operational results
AudioCodes Ltd. ($AUDC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 145.6 | 156.7 | 176.2 | 200.3 | 220.8 | 10.2% |
| Gross Profit | 88.3 | 97.8 | 110.6 | 95.0 | 149.8 | 57.8% |
| SG&A | 51.4 | 57.8 | 59.6 | 63.3 | 65.4 | 3.3% |
| EBITDA | 11.6 | 12.7 | 19.0 | 0.6 | 40.6 | 6,256.5% |
| Net Income | 16.2 | 4.0 | 13.5 | 4.0 | 27.2 | 585.1% |
Balance Sheet
|
|---|
| Cash | 24.3 | 24.2 | 31.5 | 64.8 | 40.9 | -36.8% |
| Short Term Debt | 3.5 | 2.5 | 2.5 | 11.1 | 10.4 | -6.1% |
| Long Term Debt | 8.5 | 6.2 | 3.7 | 24.3 | 19.4 | -20.0% |
Cash flow
|
|---|
| Capex | 1.5 | 1.6 | 1.3 | 1.9 | 1.5 | -21.5% |
Ratios
|
|---|
| Revenue growth | 4.2% | 7.7% | 12.4% | 13.7% | 10.2% | |
| EBITDA growth | 72.2% | 8.7% | 50.3% | -96.6% | 6,256.5% | |
|
|---|
| Gross Margin | 60.7% | 62.4% | 62.8% | 47.4% | 67.9% | 20.4% |
| EBITDA Margin | 8.0% | 8.1% | 10.8% | 0.3% | 18.4% | 18.1% |
| SG&A, % of revenue | 35.3% | 36.9% | 33.8% | 31.6% | 29.6% | -2.0% |
| Net Income Margin | 11.2% | 2.6% | 7.7% | 2.0% | 12.3% | 10.4% |
| CAPEX, % of revenue | 1.0% | 1.0% | 0.8% | 1.0% | 0.7% | -0.3% |
|
|---|
| ROIC | 6.1% | 8.6% | 16.1% | -7.7% | 20.8% | 28.5% |
| ROE | 14.4% | 4.0% | 14.4% | 4.3% | 18.0% | 13.8% |
| Net Debt/EBITDA | -1.1x | -1.2x | -1.3x | -46.0x | -0.3x | 45.8x |
AudioCodes Ltd. ($AUDC) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 52 | 54 | 57 | 59 | | 11.7% | 8.1% | 10.0% | 11.1% |
| EBITDA | 7 | 9 | 12 | 13 | | 33.4% | 46.5% | 80.9% | - |
| Net Income | 5 | 7 | 7 | 8 | | 72.6% | 38.5% | 59.5% | - |
Balance Sheet
|
|---|
| Cash | 67 | 164 | 59 | 41 | | 42.8% | 315.9% | 14.8% | -36.8% |
| Short Term Debt | 10 | 10 | 10 | 10 | | -2.8% | -7.5% | -9.0% | -6.1% |
| Long Term Debt | 20 | 20 | 18 | 19 | | -21.2% | -25.7% | -26.6% | -20.0% |
Ratios
|
|---|
| Gross Margin | 65.9% | 66.7% | 67.1% | 71.4% | | 3.1% | 3.4% | 4.2% | 67.4% |
| EBITDA Margin | 12.9% | 17.6% | 20.9% | 21.7% | | 2.1% | 4.6% | 8.2% | 69.8% |
| Net Income Margin | 10.1% | 12.4% | 12.3% | 14.3% | | 3.6% | 2.7% | 3.8% | 29.9% |
Peers in Communications Equipment
Below you can find AudioCodes Ltd. benchmarking vs. other companies in Communications Equipment 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 |
|---|
| Resonant Inc. ($RESN) | - | 116.2% | -19.8% | 40.3% | 329.9% |
| Franklin Wireless Corp ($FKWL) | - | -18.8% | -38.1% | 21.3% | 105.9% |
| Ribbon Communications Inc. ($RBBN) | - | 30.6% | 75.2% | -2.6% | 49.8% |
| Inseego Corp. ($INSG) | - | -10.0% | -7.7% | 8.4% | 43.0% |
| Casa Systems, Inc. ($CASA) | - | 11.2% | -15.5% | -5.0% | 39.3% |
| |
|---|
| Median (35 companies) | 7.5% | 5.1% | 2.8% | 3.7% | 2.1% |
|---|
| AudioCodes Ltd. ($AUDC) | - | 7.7% | 12.4% | 13.7% | 10.2% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| F5 Networks, Inc. ($FFIV) | 83.1% | 83.1% | 83.3% | 84.1% | 82.6% |
| Radware Ltd. ($RDWR) | 81.8% | 81.3% | 82.2% | 82.1% | 82.0% |
| Radcom Ltd. ($RDCM) | 69.6% | 71.8% | 74.0% | 70.0% | 71.4% |
| Arista Networks, Inc. ($ANET) | 64.0% | 64.5% | 63.8% | 64.1% | 63.9% |
| EchoStar Corporation ($SATS) | 59.9% | 59.8% | 62.7% | 58.3% | 60.6% |
| |
|---|
| Median (33 companies) | 43.7% | 41.0% | 40.5% | 43.2% | 44.9% |
|---|
| AudioCodes Ltd. ($AUDC) | 60.7% | 62.4% | 62.8% | 47.4% | 67.9% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| InterDigital, Inc. ($IDCC) | 73.6% | 67.3% | 41.9% | 37.5% | 39.5% |
| EchoStar Corporation ($SATS) | 40.3% | 38.1% | 37.4% | 36.4% | 35.0% |
| Arista Networks, Inc. ($ANET) | 23.3% | 29.8% | 14.0% | 35.7% | 33.1% |
| Motorola Solutions, Inc. ($MSI) | 22.2% | 25.5% | 22.0% | 26.7% | 25.9% |
| F5 Networks, Inc. ($FFIV) | 30.3% | 29.9% | 30.1% | 26.2% | 22.9% |
| |
|---|
| Median (32 companies) | 5.5% | 6.0% | 4.6% | 5.0% | 8.8% |
|---|
| AudioCodes Ltd. ($AUDC) | 8.0% | 8.1% | 10.8% | 0.3% | 18.4% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Resonant Inc. ($RESN) | 132.5% | 124.8% | 245.2% | 109.7% | 22.3% |
| EchoStar Corporation ($SATS) | 39.9% | 30.9% | 26.5% | 22.2% | 21.7% |
| KVH Industries, Inc. ($KVHI) | 3.2% | 8.0% | 9.3% | 7.9% | 8.9% |
| Harmonic Inc. ($HLIT) | 3.7% | 3.2% | 1.7% | 2.6% | 8.5% |
| Applied Optoelectronics, Inc. ($AAOI) | 19.0% | 17.5% | 26.9% | 15.1% | 6.7% |
| |
|---|
| Median (32 companies) | 2.0% | 1.9% | 1.7% | 2.5% | 2.2% |
|---|
| AudioCodes Ltd. ($AUDC) | 1.0% | 1.0% | 0.8% | 1.0% | 0.7% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Franklin Wireless Corp ($FKWL) | 12.2% | 4.7% | -14.9% | -13.0% | 37.5% |
| Motorola Solutions, Inc. ($MSI) | 26.4% | 39.5% | 35.3% | 34.0% | 26.4% |
| Arista Networks, Inc. ($ANET) | 25.7% | 33.9% | 14.5% | 33.3% | 23.5% |
| F5 Networks, Inc. ($FFIV) | 43.1% | 46.9% | 47.9% | 34.1% | 16.5% |
| Ciena Corporation ($CIEN) | 7.9% | 8.3% | 7.6% | 11.9% | 15.5% |
| |
|---|
| Median (35 companies) | 2.2% | 2.1% | 0.3% | 1.2% | 1.9% |
|---|
| AudioCodes Ltd. ($AUDC) | 6.1% | 8.6% | 16.1% | -7.7% | 20.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Inseego Corp. ($INSG) | - | - | 3.9x | 82.5x | 26.9x |
| CommScope Holding Company, Inc. ($COMM) | 4.3x | 4.6x | 4.4x | 27.0x | 10.5x |
| Harmonic Inc. ($HLIT) | - | - | 3.4x | 1.9x | 6.5x |
| Ribbon Communications Inc. ($RBBN) | -17.2x | - | - | - | 3.5x |
| Casa Systems, Inc. ($CASA) | -0.2x | 0.3x | 0.2x | 32.1x | 3.2x |
| |
|---|
| Median (24 companies) | -0.8x | -0.6x | 0.2x | -0.1x | -0.5x |
|---|
| AudioCodes Ltd. ($AUDC) | -1.1x | -1.2x | -1.3x | -46.0x | -0.3x |
