Intelligent Systems Corporation CAPEX jumped on 310% and Revenue increased on 4.6%
02/11/2021 • About Intelligent Systems Corporation (
$INS) • By InTwits
Intelligent Systems Corporation reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is quite volatile: 40.4% in 2020, 43.6% in 2019, 33.6% in 2018, -12.8% in 2017, -5.4% in 2016
- Intelligent Systems Corporation has medium CAPEX intensity: 5 year average CAPEX/Revenue was 8.4%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $7m in 2020, $2m in 2019, $1m in 2018, $1m in 2017, $0m in 2016
- The company has highly profitable business model: ROIC is 26.5%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Intelligent Systems Corporation's Revenue increased on 4.6%. Revenue growth showed slowdown in 20Q4 - it was -6.6% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 7.3 pp from 0.38% to 7.6% in FY2020. EBITDA Margin followed a growing trend at 14.8 pp per annum in the last 5 years.
Gross Margin decreased on 8.7 pp from 65.7% to 57.0% in 2020. SG&A as a % of Revenue increased slightly on 0.52 pp from 10.6% to 11.1% in 2020. SG&A as a % of Revenue declined at -4.0 pp per annum in 2016-2020.
Net Income margin decreased on 9.2 pp from 32.0% to 22.7% in 2020. During the last 5 years Net Income margin topped in 2019 at 32.0%.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 19.2% in 2020. CAPEX/Revenue increased on 9.4 pp from 9.7% in 2017 to 19.2% in 2020. For the last three years the average CAPEX/Revenue was 9.5%.
Return on investment
The company operates at high and attractive ROIC (26.5%) and ROE (20.0%). ROIC dropped on 14.9 pp from 41.4% to 26.5% in 2020. ROE dropped on 14.7 pp from 34.7% to 20.0% in 2020. During 2016-2020 ROE topped in 2019 at 34.7%.
Leverage (Debt)
Company's Net Debt / EBITDA is -2.4x and Debt / EBITDA is 0.2x. Debt jumped on 547% while cash surged on 43.7%.
Intelligent Systems Corporation has no short term refinancing risk: cash is higher than short term debt (3,861.2%).
Valuation and dividends
The company's trades at EV/EBITDA 20.8x and P/E 41.3x.
Management team
The company's CEO is J Leland Strange. J Leland Strange has 36 years tenure with the company. Intelligent Systems Corporation's CFO Matt White has spent 2 years with the company.
Financial and operational results
FY ended 12/31/2020
Intelligent Systems Corporation ($INS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 8.178 | 9.179 | 20.100 | 34.303 | 35.873 | 4.6% |
| Gross Profit | 4.200 | 4.708 | 11.576 | 22.544 | 20.446 | -9.3% |
| SG&A | 2.147 | 1.843 | 2.081 | 3.646 | 3.998 | 9.7% |
| EBITDA | -0.439 | -1.172 | 6.756 | 14.957 | 14.485 | -3.2% |
| Net Income | -1.112 | 0.374 | 6.244 | 10.969 | 8.161 | -25.6% |
Balance Sheet
|
|---|
| Cash | 17.724 | 14.024 | 18.919 | 26.415 | 37.956 | 43.7% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.000 | 0.983 | |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.460 | 1.994 | 333.5% |
Cash flow
|
|---|
| Capex | 0.313 | 0.894 | 0.865 | 1.676 | 6.875 | 310.2% |
Ratios
|
|---|
| Revenue growth | 71.0% | 12.2% | 119.0% | 70.7% | 4.6% | |
| EBITDA growth | -83.1% | 167.0% | -676.5% | 121.4% | -3.2% | |
|
|---|
| Gross Margin | 51.4% | 51.3% | 57.6% | 65.7% | 57.0% | -8.7% |
| EBITDA Margin | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% | -3.2% |
| SG&A, % of revenue | 26.3% | 20.1% | 10.4% | 10.6% | 11.1% | 0.5% |
| Net Income Margin | -13.6% | 4.1% | 31.1% | 32.0% | 22.7% | -9.2% |
| CAPEX, % of revenue | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% | 14.3% |
|
|---|
| ROIC | -3.3% | -7.8% | 26.9% | 41.4% | 26.5% | -14.9% |
| ROE | -4.6% | 1.8% | 27.5% | 34.7% | 20.0% | -14.7% |
| Net Debt/EBITDA | | | -2.8x | -1.7x | -2.4x | -0.7x |
Intelligent Systems Corporation ($INS) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 8 | 8 | 10 | 10 | | 13.3% | 7.2% | 8.2% | -6.6% |
| EBITDA | 3 | 3 | 5 | 4 | | -3.7% | 18.7% | 1.1% | -13.0% |
| Net Income | 1 | 2 | 3 | 2 | | -49.5% | 4.4% | -9.6% | -42.7% |
Balance Sheet
|
|---|
| Cash | 31 | 32 | 34 | 38 | | 38.4% | 47.7% | 45.3% | 43.7% |
| Short Term Debt | 0 | 0 | 0 | 1 | | -100.0% | -100.0% | - | - |
| Long Term Debt | 2 | 2 | 2 | 2 | | 233.1% | 269.3% | 333.8% | 333.5% |
Ratios
|
|---|
| Gross Margin | 55.6% | 54.1% | 59.1% | 58.3% | | -8.0% | -7.3% | -9.3% | -9.5% |
| EBITDA Margin | 34.0% | 42.0% | 44.2% | 38.5% | | -6.0% | 4.1% | -3.1% | -2.8% |
| Net Income Margin | 13.3% | 27.3% | 27.1% | 22.0% | | -16.5% | -0.7% | -5.3% | -13.9% |
Peers in Application Software
Below we provide Intelligent Systems Corporation 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.1% | 19.4% | 14.7% |
|---|
| Intelligent Systems Corporation ($INS) | - | 12.2% | 119.0% | 70.7% | 4.6% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| Intelligent Systems Corporation ($INS) | 51.4% | 51.3% | 57.6% | 65.7% | 57.0% |
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% |
| 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% |
| ANSYS, Inc. ($ANSS) | 45.1% | 41.9% | 41.4% | 39.5% | 36.1% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 2.7% | 6.8% |
|---|
| Intelligent Systems Corporation ($INS) | -5.4% | -12.8% | 33.6% | 43.6% | 40.4% |
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% |
| 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. ($PAYC) | 13.3% | 13.7% | 10.6% | 12.6% | 11.2% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 2.9% | 2.5% |
|---|
| Intelligent Systems Corporation ($INS) | 3.8% | 9.7% | 4.3% | 4.9% | 19.2% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| Intelligent Systems Corporation ($INS) | -3.3% | -7.8% | 26.9% | 41.4% | 26.5% |
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. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.6x | 0.4x | 0.3x |
|---|
| Intelligent Systems Corporation ($INS) | - | - | -2.8x | -1.7x | -2.4x |
