Calix, Inc Net Income jumped on 289% and EBITDA Margin increased on 9.4 pp from -0.091% to 9.3%
01/27/2021 • About Calix, Inc (
$CALX) • By InTwits
Calix, Inc reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- EBITDA Margin is expanding: 9.3% in FY2020 vs. -0.1% in FY2019 vs. -3.1% in FY2016
- Calix, 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 -1.8%
- Calix, Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's a lot of higher than industry average of 14.0%.
- CAPEX is quite volatile: $1,129m in FY2020, $10m in FY2019, $7m in FY2018, $4m in FY2017, $2m in FY2016
- The company has highly profitable business model: ROIC is 14.9%
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 27.6%. Revenue growth showed acceleration in FY20Q4 - it increased 41.5% YoY. During the last 5 years Revenue growth bottomed in FY2018 at -13.5% and was accelerating since that time. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 9.4 pp from -0.091% to 9.3% in FY2020. During FY2016-FY2020 EBITDA Margin bottomed in FY2017 at -13.8% and was growing since that time.
Gross Margin increased on 5.0 pp from 44.3% to 49.3% in FY2020. SG&A as a % of Revenue decreased on 2.6 pp from 28.2% to 25.6% in FY2020.
Net Income margin surged on 10.4 pp from -4.2% to 6.2% in FY2020. During the last 5 years Net Income margin bottomed in FY2017 at -16.3% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.4% in FY2020. CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at good ROIC (14.9%) and ROE (15.4%). ROIC surged on 22.3 pp from -7.4% to 14.9% in FY2020. ROE surged on 27.0 pp from -11.6% to 15.4% in FY2020. During FY2016-FY2020 ROIC bottomed in FY2017 at -42.0% and was growing since that time. During the last 5 years ROE bottomed in FY2017 at -46.4% and was growing since that time.
Leverage (Debt)
Debt level is -1.3x Net Debt / EBITDA and 0.3x Debt / EBITDA. Debt dropped on 72.5% while cash surged on 72.6%.
The company has no short term refinancing risk: short term debt is zero.
Valuation and dividends
The company's trades at EV/EBITDA 40.2x and P/E 62.7x.
Management team
Carl Russo is a the company's CEO. Carl Russo has spent 18 years with the company. Calix, Inc's CFO Cory J Sindelar has spent 3 years with the company.
Financial and operational results
Calix, Inc ($CALX) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 458.8 | 510.4 | 441.3 | 424.3 | 541.2 | 27.6% |
| Gross Profit | 201.2 | 172.9 | 197.4 | 187.9 | 267.0 | 42.1% |
| SG&A | 125.3 | 122.7 | 126.9 | 119.7 | 138.6 | 15.8% |
| EBITDA | -14.0 | -70.6 | -9.3 | -0.4 | 50.6 | |
| Net Income | -27.4 | -83.0 | -19.3 | -17.7 | 33.5 | |
Balance Sheet
|
|---|
| Cash | 50.4 | 39.8 | 49.6 | 46.8 | 80.8 | 72.6% |
| Short Term Debt | 0.0 | 30.0 | 30.0 | 32.7 | 0.0 | -100.0% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 14.3 | 12.9 | -9.7% |
Cash flow
|
|---|
| Capex | 9.8 | 8.0 | 10.4 | 13.4 | 7.8 | -41.4% |
Ratios
|
|---|
| Revenue growth | 12.6% | 11.2% | -13.5% | -3.8% | 27.6% | |
| EBITDA growth | -705.1% | 404.2% | -86.8% | -95.9% | -13,233.5% | |
|
|---|
| Gross Margin | 43.9% | 33.9% | 44.7% | 44.3% | 49.3% | 5.0% |
| EBITDA Margin | -3.1% | -13.8% | -2.1% | -0.1% | 9.3% | 9.4% |
| SG&A, % of revenue | 27.3% | 24.0% | 28.8% | 28.2% | 25.6% | -2.6% |
| Net Income Margin | -6.0% | -16.3% | -4.4% | -4.2% | 6.2% | 10.4% |
| CAPEX, % of revenue | 2.1% | 1.6% | 2.4% | 3.1% | 1.4% | -1.7% |
|
|---|
| ROIC | -12.5% | -42.0% | -10.3% | -7.4% | 14.9% | 22.3% |
| ROE | -12.2% | -46.4% | -13.0% | -11.6% | 15.4% | 27.0% |
| Net Debt/EBITDA | | | | | -1.3x |
Calix, Inc ($CALX) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 102 | 119 | 151 | 170 | | 13.8% | 18.7% | 31.5% | 41.5% |
| EBITDA | -2 | 1 | 26 | 28 | | - | - | 2,464.7% | 412.1% |
| Net Income | -7 | -4 | 21 | 24 | | - | - | - | 4,749.5% |
Balance Sheet
|
|---|
| Cash | 46 | 51 | 64 | 81 | | 4.8% | 44.7% | 69.9% | 72.6% |
| Short Term Debt | 33 | 29 | 3 | 0 | | 1.7% | 4.9% | -89.7% | -100.0% |
| Long Term Debt | 14 | 13 | 12 | 13 | | -13.1% | -13.8% | -14.2% | -9.7% |
Ratios
|
|---|
| Gross Margin | 44.9% | 47.4% | 50.5% | 52.4% | | 2.0% | 2.9% | 6.6% | 6.8% |
| EBITDA Margin | -1.7% | 1.0% | 17.2% | 16.6% | | 4.6% | 2.3% | 16.4% | 12.0% |
| Net Income Margin | -6.8% | -3.5% | 13.6% | 14.2% | | 4.1% | 1.5% | 16.6% | 13.8% |
Peers in Communications Equipment
Below we provide Calix, Inc benchmarking against other companies in Communications Equipment 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 |
|---|
| 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. ($CASA) | - | 11.2% | -15.5% | -5.0% | 39.3% |
| |
|---|
| Median (35 companies) | 7.5% | 5.1% | 3.5% | 3.7% | 2.1% |
|---|
| Calix, Inc ($CALX) | - | 11.2% | -13.5% | -3.8% | 27.6% |
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. ($RDCM) | 69.6% | 71.8% | 74.0% | 70.0% | 71.4% |
| AudioCodes Ltd. ($AUDC) | 60.7% | 62.4% | 62.8% | 47.4% | 67.9% |
| Arista Networks, Inc. ($ANET) | 64.0% | 64.5% | 63.8% | 64.1% | 63.9% |
| |
|---|
| Median (33 companies) | 43.7% | 41.7% | 40.5% | 43.2% | 44.9% |
|---|
| Calix, Inc ($CALX) | 43.9% | 33.9% | 44.7% | 44.3% | 49.3% |
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. ($FFIV) | 30.3% | 29.9% | 30.1% | 26.2% | 22.9% |
| |
|---|
| Median (32 companies) | 5.9% | 6.5% | 5.4% | 5.0% | 8.8% |
|---|
| Calix, Inc ($CALX) | -3.1% | -13.8% | -2.1% | -0.1% | 9.3% |
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. ($AAOI) | 19.0% | 17.5% | 26.9% | 15.1% | 6.7% |
| |
|---|
| Median (32 companies) | 1.9% | 1.9% | 1.6% | 2.4% | 2.2% |
|---|
| Calix, Inc ($CALX) | 2.1% | 1.6% | 2.4% | 3.1% | 1.4% |
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. ($ANET) | 25.7% | 33.9% | 14.5% | 33.3% | 23.5% |
| AudioCodes Ltd. ($AUDC) | 6.1% | 8.6% | 16.1% | -7.7% | 20.8% |
| F5 Networks, Inc. ($FFIV) | 43.1% | 46.9% | 47.9% | 34.1% | 16.5% |
| |
|---|
| Median (35 companies) | 2.4% | 2.2% | 0.7% | 1.2% | 1.9% |
|---|
| Calix, Inc ($CALX) | -12.5% | -42.0% | -10.3% | -7.4% | 14.9% |
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. ($CASA) | -0.2x | 0.3x | 0.2x | 32.1x | 3.2x |
| |
|---|
| Median (24 companies) | -0.9x | -0.7x | -0.1x | -0.3x | -0.3x |
|---|
| Calix, Inc ($CALX) | - | - | - | - | -1.3x |
