MicroStrategy Incorporated CAPEX surged on 10,985% while Revenue decreased slightly on 1.1%
01/28/2021 • About MicroStrategy Incorporated (
$MSTR) • By InTwits
MicroStrategy Incorporated reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: -0.1% in FY2020, 6.3% in FY2019, 1.5% in FY2018, 17.6% in FY2017, 25.2% in FY2016
- MicroStrategy Incorporated has high CAPEX intensity: 5 year average CAPEX/Revenue was 47.9%. 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, $2m in FY2016
- The company has unprofitable business model: ROIC is -2.2%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
MicroStrategy Incorporated's Revenue decreased slightly on 1.1%. Revenue decline showed acceleration in FY20Q4 - it was 1.7% YoY. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.4 pp from 6.3% to -0.061% in FY2020. EBITDA Margin stuck to a declining trend at -6.2 pp per annum in the last 5 years.
Gross Margin increased slightly on 1.6 pp from 79.4% to 81.1% in FY2020. During FY2016-FY2020 Gross Margin bottomed in FY2019 at 79.4%. SG&A as a % of Revenue decreased on 9.5 pp from 57.1% to 47.6% in FY2020. During FY2016-FY2020 SG&A as a % of Revenue topped in FY2018 at 58.6% and was declining since that time.
Net Income margin decreased on 8.6 pp from 7.1% to -1.6% in FY2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 235% in FY2020. MicroStrategy Incorporated's CAPEX/Revenue surged on 234 pp from 0.79% in FY2017 to 235% in FY2020. For the last three years the average CAPEX/Revenue was 79.4%. CAPEX as a % of Revenue pursued a growing trend in FY2016-FY2020.
Return on investment
The company operates at negative ROIC (-2.2%) and ROE (-1.4%). ROIC decreased on 3.2 pp from 1.0% to -2.2% in FY2020. ROE decreased on 8.0 pp from 6.6% to -1.4% in FY2020. ROIC declined at -6.0 pp per annum in the last 5 years.
Management team
The company's CEO Michael J Saylor has spent 31 years with the company. Phong Q Le is a the company's CFO. Phong Q Le has spent 1 year at the company.
Financial and operational results
MicroStrategy Incorporated ($MSTR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 513.6 | 503.8 | 497.6 | 486.3 | 480.7 | -1.1% |
| Gross Profit | 420.4 | 407.2 | 398.1 | 386.4 | 389.7 | 0.9% |
| SG&A | 237.7 | 255.2 | 291.7 | 277.9 | 229.0 | -17.6% |
| EBITDA | 129.5 | 88.8 | 7.7 | 30.7 | -0.3 | -101.0% |
| Net Income | 92.2 | 18.2 | 22.5 | 34.4 | -7.5 | -121.9% |
Balance Sheet
|
|---|
| Cash | 402.0 | 420.2 | 109.9 | 456.7 | 59.7 | -86.9% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 9.6 | | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 103.4 | 84.3 | -18.5% |
Cash flow
|
|---|
| Capex | 2.3 | 4.0 | 6.8 | 10.2 | 1,128.7 | 10,984.8% |
Ratios
|
|---|
| Revenue growth | -3.1% | -1.9% | -1.2% | -2.3% | -1.1% | |
| EBITDA growth | -16.6% | -31.4% | -91.3% | 299.9% | -101.0% | |
|
|---|
| Gross Margin | 81.9% | 80.8% | 80.0% | 79.4% | 81.1% | 1.6% |
| EBITDA Margin | 25.2% | 17.6% | 1.5% | 6.3% | -0.1% | -6.4% |
| SG&A, % of revenue | 46.3% | 50.7% | 58.6% | 57.1% | 47.6% | -9.5% |
| Net Income Margin | 18.0% | 3.6% | 4.5% | 7.1% | -1.6% | -8.6% |
| CAPEX, % of revenue | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% | 232.7% |
|
|---|
| ROIC | 22.0% | 12.8% | 0.7% | 1.0% | -2.2% | -3.2% |
| ROE | 18.3% | 3.1% | 4.0% | 6.6% | -1.4% | -8.0% |
| Net Debt/EBITDA | -3.1x | -4.7x | -14.3x | -11.2x | |
MicroStrategy Incorporated ($MSTR) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 111 | 111 | 127 | 131 | | -3.4% | -6.1% | 6.4% | -1.7% |
| EBITDA | 3 | 9 | -17 | 4 | | - | 210.1% | -238.0% | -76.3% |
| Net Income | 1 | 3 | -14 | 3 | | - | -83.4% | -246.7% | -78.1% |
Balance Sheet
|
|---|
| Cash | 429 | 421 | 53 | 60 | | 65.9% | 61.0% | -86.0% | -86.9% |
| Long Term Debt | 100 | 98 | 96 | 84 | | -6.0% | -9.2% | -9.2% | -18.5% |
Ratios
|
|---|
| Gross Margin | 78.0% | 78.3% | 82.9% | 84.2% | | 0.7% | -0.2% | 2.8% | 2.6% |
| EBITDA Margin | 2.4% | 8.5% | -13.2% | 3.3% | | 5.0% | 5.9% | -23.3% | -10.5% |
| Net Income Margin | 0.6% | 3.1% | -11.2% | 2.0% | | 7.4% | -14.3% | -19.3% | -7.1% |
Peers in Application Software
Below you can find MicroStrategy Incorporated benchmarking vs. other companies in Application Software 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 |
|---|
| 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| MicroStrategy Incorporated ($MSTR) | - | -1.9% | -1.2% | -2.3% | -1.1% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.4% | 65.3% | 67.9% | 69.4% |
|---|
| MicroStrategy Incorporated ($MSTR) | 81.9% | 80.8% | 80.0% | 79.4% | 81.1% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 7.7% |
|---|
| MicroStrategy Incorporated ($MSTR) | 25.2% | 17.6% | 1.5% | 6.3% | -0.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| 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% |
| Paycom Software, Inc. ($PAYC) | 13.3% | 13.7% | 10.6% | 12.6% | 11.2% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.5% |
|---|
| MicroStrategy Incorporated ($MSTR) | 0.5% | 0.8% | 1.4% | 2.1% | 234.8% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -1.8% |
|---|
| MicroStrategy Incorporated ($MSTR) | 22.0% | 12.8% | 0.7% | 1.0% | -2.2% |
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 (54 companies) | -0.9x | -0.8x | -0.6x | 0.4x | 0.2x |
|---|
