Allot Communications Ltd. CAPEX surged on 104% and Revenue jumped on 23.5%
02/09/2021 • About Allot Communications Ltd. (
$ALLT) • By InTwits
Allot Communications Ltd. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- The company operates at negative EBITDA Margin: -1.1%
- Allot Communications Ltd. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 was 0.7% while average EBITDA Margin was -5.0% for the sames years
- Allot Communications Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.6%. At the same time it's in pair with industry average of 3.2%
- CAPEX is quite volatile: $8m in 2020, $4m in 2019, $3m in 2018, $3m in 2017, $2m in 2016
- The company has unprofitable business model: ROIC is -6.4%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue jumped on 23.5%. Revenue growth showed acceleration in 20Q4 - it increased 26.1% YoY. Revenue decline was slowing down on average by 9.0 pp per annum in 2016-2020. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 3.3 pp from 7.3% to 10.6% in 2020. During 2016-2020 EBITDA Margin bottomed in 2017 at -16.8% and was growing since that time.
Gross Margin increased slightly on 1.2 pp from 69.3% to 70.5% in 2020. SG&A as a % of Revenue decreased on 3.7 pp from 48.8% to 45.2% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2017 at 59.8% and was declining since that time.
Net Income margin increased slightly on 0.99 pp from -7.9% to -6.9% in 2020. During the last 5 years Net Income margin bottomed in 2017 at -22.0% and was growing since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 5.6% in 2020. Allot Communications Ltd.'s CAPEX/Revenue increased on 2.1 pp from 3.5% in 2017 to 5.6% in 2020. It's average CAPEX/Revenue for the last three years was 4.2%. CAPEX as a % of Revenue grew at 0.76 pp per annum in 2016-2020.
Return on investment
The company operates at negative ROIC (-6.4%) and ROE (-7.1%). ROIC showed almost no change in 2020. ROE decreased slightly on 0.67 pp from -6.5% to -7.1% in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.3x and Debt / EBITDA is . Debt dropped on 33.3% while cash jumped on 39.4%.
Allot Communications Ltd. has no short term refinancing risk: cash is higher than short term debt (838.9%).
Financial and operational results
FY ended 12/31/2020
Allot Communications Ltd. ($ALLT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 90.4 | 82.0 | 95.8 | 110.1 | 135.9 | 23.5% |
| Gross Profit | 62.5 | 53.5 | 66.5 | 76.3 | 95.8 | 25.7% |
| SG&A | 45.1 | 49.0 | 51.3 | 53.8 | 61.4 | 14.2% |
| EBITDA | -2.8 | -13.7 | -6.4 | -1.5 | -1.4 | |
| EBIT | | | | -5.8 | | |
| Net Income | -8.0 | -18.1 | -10.4 | -8.7 | -9.3 | |
| Stock Based Compensation | | | | 3.4 | | |
Balance Sheet
|
|---|
| Cash | 23.3 | 15.3 | 16.3 | 16.9 | 23.6 | 39.4% |
| Accounts Receivable | | | | 29.0 | | |
| Inventory | | | | 10.7 | | |
| Accounts Payable | | | | 11.7 | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 3.2 | 2.8 | -10.7% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 3.8 | 1.8 | -52.0% |
Cash flow
|
|---|
| Capex | 1.6 | 2.8 | 3.5 | 3.7 | 7.6 | 104.5% |
Ratios
|
|---|
| Revenue growth | -9.6% | -9.3% | 16.9% | 14.9% | 23.5% | |
| EBITDA growth | -72.5% | 389.5% | -53.7% | -76.6% | -3.7% | |
|
|---|
| Gross Margin | 69.1% | 65.2% | 69.4% | 69.3% | 70.5% | 1.2% |
| EBITDA Margin | -3.1% | -16.8% | -6.6% | -1.4% | -1.1% | 0.3% |
| EBIT Margin | | | | -5.3% | |
| SG&A, % of revenue | 49.9% | 59.8% | 53.5% | 48.8% | 45.2% | -3.7% |
| SBC, % of revenue | | | | 3.1% | |
| Net Income Margin | -8.8% | -22.0% | -10.9% | -7.9% | -6.9% | 1.0% |
| CAPEX, % of revenue | 1.8% | 3.5% | 3.6% | 3.4% | 5.6% | 2.2% |
|
|---|
| ROIC | -4.3% | -11.5% | -7.3% | -6.4% | -6.4% | -0.0% |
| ROE | -5.0% | -12.0% | -7.5% | -6.5% | -7.1% | -0.7% |
People
|
|---|
| Insider ownership | | | | 1.3% | | |
| Employees | | | | 478 | | |
| Revenue/Employee, th. $ | | | | 230 | | |
Allot Communications Ltd. ($ALLT) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 29 | 33 | 35 | 39 | | 17.2% | 21.4% | 24.1% | 26.1% |
| EBITDA | -1 | -3 | -1 | 0 | | - | - | - | - |
| Net Income | -2 | -4 | -2 | -2 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 29 | 31 | 18 | 24 | | 73.5% | 69.7% | -13.4% | 38.8% |
| Short Term Debt | 3 | 3 | 3 | 3 | | 47.6% | 55.6% | 5.6% | -6.2% |
| Long Term Debt | 3 | 3 | 2 | 2 | | -31.6% | -23.4% | -50.1% | -54.1% |
Ratios
|
|---|
| Gross Margin | 74.0% | 70.0% | 68.3% | 70.3% | | 3.0% | 1.0% | -0.7% | 2.3% |
| EBITDA Margin | -2.2% | -8.3% | -4.0% | 0.1% | | 5.8% | -8.3% | -0.4% | 3.3% |
| Net Income Margin | -5.7% | -11.0% | -6.9% | -4.3% | | 6.3% | -3.6% | 0.3% | 2.2% |
Peers in Systems Software
Below you can find Allot Communications Ltd. benchmarking vs. other companies in Systems 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 |
|---|
| Zscaler, Inc. ($ZS) | - | 56.5% | 51.3% | 59.2% | 42.4% |
| ServiceNow, Inc. ($NOW) | - | 38.0% | 36.0% | 32.6% | 30.6% |
| SailPoint Technologies Holdings, Inc. ($SAIL) | - | 40.5% | 33.8% | 15.9% | 26.6% |
| Rapid7, Inc. ($RPD) | - | 27.6% | 21.5% | 33.9% | 25.9% |
| Tenable Holdings, Inc. ($TENB) | - | 50.9% | 42.4% | 32.6% | 24.2% |
| |
|---|
| Median (23 companies) | 12.9% | 16.6% | 20.4% | 19.4% | 12.9% |
|---|
| Allot Communications Ltd. ($ALLT) | - | -9.3% | 16.9% | 14.9% | 23.5% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 88.5% | 88.6% | 89.6% | 89.5% | 89.4% |
| Progress Software Corporation ($PRGS) | 83.8% | 82.6% | 83.1% | 81.8% | 86.0% |
| Varonis Systems, Inc. ($VRNS) | 90.5% | 90.4% | 89.8% | 86.2% | 84.9% |
| Vmware, Inc. ($VMW) | 85.2% | - | 85.5% | 83.9% | 83.4% |
| Tenable Holdings, Inc. ($TENB) | 88.6% | 86.4% | 83.9% | 82.8% | 82.4% |
| |
|---|
| Median (23 companies) | 73.6% | 74.1% | 75.0% | 76.6% | 77.8% |
|---|
| Allot Communications Ltd. ($ALLT) | 69.1% | 65.2% | 69.4% | 69.3% | 70.5% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Check Point Software Technologies Ltd. ($CHKP) | 49.8% | 50.7% | 48.8% | 46.0% | 45.1% |
| Qualys, Inc. ($QLYS) | 23.8% | 25.1% | 28.4% | 36.5% | 40.3% |
| SolarWinds Corporation ($SWI) | -8.0% | 44.0% | 44.8% | 44.7% | 39.8% |
| Progress Software Corporation ($PRGS) | 2.4% | 28.6% | 32.9% | 23.4% | 34.4% |
| Fortinet, Inc. ($FTNT) | 7.2% | 11.1% | 15.9% | 19.8% | 23.9% |
| |
|---|
| Median (23 companies) | -9.8% | -3.6% | -3.9% | 0.2% | 3.0% |
|---|
| Allot Communications Ltd. ($ALLT) | -3.1% | -16.8% | -6.6% | -1.4% | -1.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Zscaler, Inc. ($ZS) | 7.8% | 6.5% | 8.0% | 9.5% | 12.0% |
| ServiceNow, Inc. ($NOW) | 7.6% | 7.8% | 8.6% | 7.7% | 9.3% |
| Qualys, Inc. ($QLYS) | 11.7% | 16.4% | 8.2% | 8.6% | 8.3% |
| Zuora, Inc. ($ZUO) | 3.4% | 3.3% | 2.8% | 5.7% | 7.8% |
| Proofpoint, Inc. ($PFPT) | 9.2% | 9.0% | 4.1% | 4.0% | 6.9% |
| |
|---|
| Median (23 companies) | 2.1% | 2.2% | 2.5% | 3.8% | 2.8% |
|---|
| Allot Communications Ltd. ($ALLT) | 1.8% | 3.5% | 3.6% | 3.4% | 5.6% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Fortinet, Inc. ($FTNT) | 5.3% | 15.0% | 28.0% | 29.0% | 46.3% |
| Check Point Software Technologies Ltd. ($CHKP) | 24.7% | 26.8% | 25.5% | 24.2% | 25.6% |
| Qualys, Inc. ($QLYS) | 13.7% | 12.3% | 14.3% | 18.7% | 22.0% |
| Vmware, Inc. ($VMW) | 15.9% | - | - | 18.1% | 19.6% |
| Progress Software Corporation ($PRGS) | -4.9% | 13.5% | 18.5% | 7.6% | 16.0% |
| |
|---|
| Median (23 companies) | 0.0% | -2.7% | -0.9% | -6.3% | -6.4% |
|---|
| Allot Communications Ltd. ($ALLT) | -4.3% | -11.5% | -7.3% | -6.4% | -6.4% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SolarWinds Corporation ($SWI) | - | 6.2x | 4.1x | 4.4x | 4.1x |
| Proofpoint, Inc. ($PFPT) | - | - | - | -27.4x | 2.5x |
| Progress Software Corporation ($PRGS) | -7.5x | -0.1x | 0.1x | 1.5x | 2.1x |
| Vmware, Inc. ($VMW) | -0.7x | - | -0.8x | 0.3x | 1.5x |
| CyberArk Software Ltd. ($CYBR) | -4.1x | -5.7x | -4.5x | -3.6x | 0.9x |
| |
|---|
| Median (12 companies) | -1.2x | -0.6x | -0.4x | -0.3x | 0.4x |
|---|
