Inuvo, Inc reports 27.4% revenue decline in 2020 and 2.7 pp EBITDA Margin decline from -7.3% to -10.0%
02/11/2021 • About Inuvo, Inc (
$INUV) • By InTwits
Inuvo, Inc reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Inuvo, Inc is a company in decline: 2020 revenue growth was -27.4%, 5 years revenue CAGR was -8.7%
- The company operates at negative EBITDA Margin: -10.0%
- Inuvo, Inc spends a lot for Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 is 0.0%. Average EBITDA Margin for the same period was -3.4%
- Inuvo, Inc has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 3.7%
- CAPEX is quite volatile: $15m in 2020, $1m in 2019, $2m in 2018, $1m in 2017, $1m in 2016
- The company has unprofitable business model: ROIC is -40.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Inuvo, Inc's Revenue dropped on 27.4%. Revenue decline showed acceleration in 20Q4 - it was 29.2% YoY. Revenue decline was accelerating on average at -8.5 pp per annum in the last 5 years. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 11.3 pp from -12.5% to -1.2% in 2020. EBITDA Margin stuck to a declining trend at -2.9 pp per annum in 2016-2020.
Gross Margin surged on 18.3 pp from 63.1% to 81.4% in 2020. During 2016-2020 Gross Margin bottomed in 2017 at 53.9% and was growing since that time. SG&A as a % of Revenue increased on 3.0 pp from 14.1% to 17.1% in 2020. SG&A as a % of Revenue grew at 2.4 pp per annum in the last 5 years.
Net Income margin decreased on 9.1 pp from -7.3% to -16.4% in 2020. Net Income margin followed a declining trend at -3.4 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In 2020 Inuvo, Inc had CAPEX/Revenue of 2.7%. The company showed small growth in CAPEX/Revenue of 0.70 pp from 2.0% in 2017 to 2.7% in 2020. Average CAPEX/Revenue for the last three years was 2.3%.
Return on investment
The company operates at negative ROIC (-40.3%) and ROE (-38.6%). ROIC jumped on 19.4 pp from -59.6% to -40.3% in 2020. ROE decreased slightly on 0.54 pp from -38.1% to -38.6% in 2020. During 2016-2020 ROIC bottomed in 2019 at -59.6%.
Leverage (Debt)
Company's Net Debt / EBITDA is -0.9x and Debt / EBITDA is . Debt surged on 76.4% while cash jumped on 2,016%.
Inuvo, Inc has no short term refinancing risk: cash is higher than short term debt (1,698.9%).
Financial and operational results
FY ended 12/31/2020
Inuvo, Inc ($INUV) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 71.530 | 79.554 | 73.331 | 61.525 | 44.640 | -27.4% |
| Gross Profit | 50.165 | 42.885 | 43.409 | 38.824 | 36.344 | -6.4% |
| SG&A | 4.996 | 8.343 | 8.503 | 8.673 | 7.631 | -12.0% |
| EBITDA | 1.353 | -1.207 | -2.289 | -4.493 | -4.448 | |
| Net Income | -0.773 | -3.058 | -5.891 | -4.488 | -7.305 | |
Balance Sheet
|
|---|
| Cash | 3.947 | 4.085 | 0.229 | 0.373 | 7.891 | 2,015.5% |
| Short Term Debt | 0.031 | 0.210 | 0.449 | 0.537 | 0.464 | -13.5% |
| Long Term Debt | 0.000 | 0.281 | 1.081 | 0.000 | 0.482 | |
Cash flow
|
|---|
| Capex | 1.116 | 1.559 | 1.635 | 1.194 | 1.185 | -0.7% |
Ratios
|
|---|
| Revenue growth | 1.6% | 11.2% | -7.8% | -16.1% | -27.4% | |
| EBITDA growth | -65.8% | -189.2% | 89.7% | 96.3% | -1.0% | |
|
|---|
| Gross Margin | 70.1% | 53.9% | 59.2% | 63.1% | 81.4% | 18.3% |
| EBITDA Margin | 1.9% | -1.5% | -3.1% | -7.3% | -10.0% | -2.7% |
| SG&A, % of revenue | 7.0% | 10.5% | 11.6% | 14.1% | 17.1% | 3.0% |
| Net Income Margin | -1.1% | -3.8% | -8.0% | -7.3% | -16.4% | -9.1% |
| CAPEX, % of revenue | 1.6% | 2.0% | 2.2% | 1.9% | 2.7% | 0.7% |
|
|---|
| ROIC | -7.6% | -32.2% | -40.0% | -59.6% | -40.3% | 19.4% |
| ROE | -6.9% | -23.9% | -46.9% | -38.1% | -38.6% | -0.5% |
| Net Debt/EBITDA | -2.9x | | | | |
Inuvo, Inc ($INUV) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 15 | 8 | 9 | 13 | | -3.4% | -46.0% | -33.2% | -29.2% |
| EBITDA | -2 | -0 | -2 | -1 | | - | - | - | - |
| Net Income | -3 | -1 | -2 | -1 | | - | - | -405.3% | - |
Balance Sheet
|
|---|
| Cash | 0 | 4 | 10 | 8 | | 89.5% | 320.0% | 1,234.4% | 2,015.5% |
| Short Term Debt | 2 | 3 | 0 | 0 | | 77.8% | 206.2% | -78.6% | -13.5% |
| Long Term Debt | 0 | 0 | 1 | 0 | | -83.7% | -82.4% | 47.5% | - |
Ratios
|
|---|
| Gross Margin | 77.0% | 85.9% | 82.1% | 83.4% | | 20.2% | 26.3% | 18.1% | 13.0% |
| EBITDA Margin | -11.4% | -5.6% | -17.7% | -8.2% | | -5.3% | 2.1% | -6.0% | -6.2% |
| Net Income Margin | -18.9% | -17.9% | -26.1% | -5.5% | | -3.0% | -4.0% | -31.8% | -0.8% |
Peers in Application Software
Below you can find Inuvo, Inc 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| Inuvo, Inc ($INUV) | - | 11.2% | -7.8% | -16.1% | -27.4% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.6% | 66.0% | 68.4% | 69.4% |
|---|
| Inuvo, Inc ($INUV) | 70.1% | 53.9% | 59.2% | 63.1% | 81.4% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 4.5% | 7.7% |
|---|
| Inuvo, Inc ($INUV) | 1.9% | -1.5% | -3.1% | -7.3% | -10.0% |
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% |
| 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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.5% |
|---|
| Inuvo, Inc ($INUV) | 1.6% | 2.0% | 2.2% | 1.9% | 2.7% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| Inuvo, Inc ($INUV) | -7.6% | -32.2% | -40.0% | -59.6% | -40.3% |
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 | -0.7x | 0.4x | 0.2x |
|---|
