Limelight Networks, Inc. Debt surged on 638% and Net Debt / EBITDA jumped on 6.1x from -0.4x to 5.7x
02/11/2021 • About Limelight Networks, Inc. (
$LLNW) • By InTwits
Limelight Networks, Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Limelight Networks, 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 -0.6%
- Limelight Networks, Inc. has high CAPEX intensity: 5 year average CAPEX/Revenue was 10.7%. At the same time it's a lot of higher than industry average of 6.0%.
- CAPEX is quite volatile: $25m in 2020, $35m in 2019, $16m in 2018, $21m in 2017, $10m in 2016
- The company has unprofitable business model: ROIC is -5.8%
- It operates with high leverage: Net Debt/EBITDA is 5.7x while industry average is 2.0x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Limelight Networks, Inc.'s Revenue jumped on 14.7%. Revenue growth showed slowdown in 20Q4 - it was -7.9% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.9 pp from -0.50% to 8.4% in 2020.
Gross Margin decreased on 4.5 pp from 40.6% to 36.1% in 2020. During the last 5 years Gross Margin topped in 2018 at 47.8% and was declining since that time. SG&A as a % of Revenue decreased on 4.6 pp from 36.8% to 32.2% in 2020.
Net Income margin showed almost no change in 2020. During 2016-2020 Net Income margin topped in 2018 at 5.0% and was declining since that time.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 10.9% in 2020. The company showed almost no change in CAPEX/Revenue from 2017 to 2020. For the last three years the average CAPEX/Revenue was 12.1%. The company has spent a lot to CAPEX (210% of EBITDA) to secure its growth.
Return on investment
The company operates at negative ROIC (-5.8%) and ROE (-11.3%). ROIC increased on 2.8 pp from -8.6% to -5.8% in 2020. ROE decreased slightly on 1.6 pp from -9.7% to -11.3% in 2020. During the last 5 years ROE topped in 2018 at 6.4% and was declining since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 5.7x and Debt / EBITDA is 9.6x. Net Debt / EBITDA jumped on 6.1x from -0.4x to 5.7x in 2020. Debt jumped on 638% while cash jumped on 155%.
Limelight Networks, Inc. has no short term refinancing risk: cash is higher than short term debt (1,898.4%).
Management team
Limelight Networks, Inc.'s CEO Robert A Lyons "Bob" has spent 1 month with the company. Daniel R Boncel "Dan" is a the company's CFO. Daniel R Boncel "Dan" has spent 8 months years at the company.
Financial and operational results
FY ended 12/31/2020
Limelight Networks, Inc. ($LLNW) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 168.2 | 184.4 | 195.7 | 200.6 | 230.2 | 14.7% |
| Gross Profit | 71.3 | 87.8 | 93.5 | 81.5 | 83.1 | 1.9% |
| SG&A | 63.0 | 68.2 | 71.9 | 73.9 | 74.2 | 0.5% |
| EBITDA | -51.9 | 12.4 | 13.8 | 7.6 | 11.9 | 56.7% |
| Net Income | -73.9 | -7.6 | 9.8 | -16.0 | -19.3 | |
Balance Sheet
|
|---|
| Cash | 21.7 | 20.9 | 25.4 | 18.3 | 46.8 | 155.2% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 2.1 | 2.5 | 19.9% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 13.5 | 112.2 | 731.9% |
Cash flow
|
|---|
| Capex | 9.6 | 20.7 | 16.1 | 34.7 | 25.1 | -27.7% |
Ratios
|
|---|
| Revenue growth | -1.6% | 9.6% | 6.1% | 2.5% | 14.7% | |
| EBITDA growth | 978.4% | -124.0% | 10.5% | -44.6% | 56.7% | |
|
|---|
| Gross Margin | 42.4% | 47.6% | 47.8% | 40.6% | 36.1% | -4.5% |
| EBITDA Margin | -30.9% | 6.7% | 7.0% | 3.8% | 5.2% | 1.4% |
| SG&A, % of revenue | 37.4% | 37.0% | 36.8% | 36.8% | 32.2% | -4.6% |
| Net Income Margin | -43.9% | -4.1% | 5.0% | -8.0% | -8.4% | -0.4% |
| CAPEX, % of revenue | 5.7% | 11.2% | 8.2% | 17.3% | 10.9% | -6.4% |
|
|---|
| ROIC | -42.9% | -5.7% | -3.1% | -8.6% | -5.8% | 2.8% |
| ROE | -44.0% | -5.4% | 6.4% | -9.7% | -11.3% | -1.6% |
| Net Debt/EBITDA | | -1.7x | -1.8x | -0.4x | 5.7x | 6.1x |
Limelight Networks, Inc. ($LLNW) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 57 | 59 | 59 | 55 | | 31.7% | 27.5% | 15.4% | -7.9% |
| EBITDA | 1 | 5 | 4 | 1 | | - | - | 36.0% | -89.5% |
| Net Income | -5 | -2 | -4 | -8 | | - | - | - | -438.0% |
Balance Sheet
|
|---|
| Cash | 21 | 18 | 75 | 47 | | 29.8% | -26.3% | 406.8% | 155.2% |
| Short Term Debt | 2 | 2 | 3 | 2 | | 26.3% | 51.4% | 41.9% | 19.9% |
| Long Term Debt | 13 | 12 | 112 | 112 | | 696.5% | 829.5% | 737.8% | 731.9% |
Ratios
|
|---|
| Gross Margin | 36.4% | 40.6% | 36.7% | 30.4% | | -0.6% | 0.3% | -3.8% | -13.3% |
| EBITDA Margin | 2.3% | 9.0% | 7.5% | 1.6% | | 9.5% | 11.7% | 1.1% | -12.8% |
| Net Income Margin | -9.2% | -2.9% | -6.7% | -15.0% | | 10.6% | 12.7% | -1.4% | -19.1% |
Peers in Internet Services & Infrastructure
Below you can find Limelight Networks, Inc. benchmarking vs. other companies in Internet Services & Infrastructure 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 |
|---|
| MongoDB, Inc. ($MDB) | - | 55.3% | 63.8% | 60.8% | 57.9% |
| Twilio Inc. ($TWLO) | - | 43.9% | 62.9% | 74.5% | 55.3% |
| Okta, Inc. ($OKTA) | - | 86.6% | 60.0% | 55.6% | 46.8% |
| Wix.com Ltd. ($WIX) | - | 46.7% | 41.8% | 26.1% | 29.9% |
| Crexendo Inc ($CXDO) | - | 11.7% | 16.9% | 21.2% | 13.5% |
| |
|---|
| Median (9 companies) | 20.7% | 13.7% | 19.2% | 21.2% | 13.5% |
|---|
| Limelight Networks, Inc. ($LLNW) | - | 9.6% | 6.1% | 2.5% | 14.7% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 82.6% | 83.4% | 84.2% | 85.3% | 85.8% |
| Okta, Inc. ($OKTA) | 58.1% | 65.1% | 68.5% | 71.6% | 72.8% |
| MongoDB, Inc. ($MDB) | 68.0% | 70.5% | 74.2% | 72.4% | 70.3% |
| Crexendo Inc ($CXDO) | 60.2% | 67.9% | 67.9% | 69.9% | 69.8% |
| Wix.com Ltd. ($WIX) | 84.4% | 83.7% | 79.0% | 74.1% | 68.1% |
| |
|---|
| Median (9 companies) | 61.5% | 65.0% | 66.4% | 69.9% | 68.1% |
|---|
| Limelight Networks, Inc. ($LLNW) | 42.4% | 47.6% | 47.8% | 40.6% | 36.1% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 65.0% | 67.1% | 69.2% | 68.8% |
| Akamai Technologies, Inc. ($AKAM) | 33.9% | 27.6% | 29.4% | 39.5% | 41.0% |
| GoDaddy Inc. ($GDDY) | 11.4% | 12.2% | 14.4% | 15.6% | 15.8% |
| Crexendo Inc ($CXDO) | -28.7% | -6.2% | -1.0% | 10.6% | 7.8% |
| Brightcove Inc. ($BCOV) | -0.8% | -8.0% | -3.8% | -2.6% | 5.5% |
| |
|---|
| Median (9 companies) | -2.8% | -7.1% | 16.8% | -2.6% | 5.5% |
|---|
| Limelight Networks, Inc. ($LLNW) | -30.9% | 6.7% | 7.0% | 3.8% | 5.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Akamai Technologies, Inc. ($AKAM) | 13.5% | 16.7% | 14.9% | 19.4% | 22.9% |
| Crexendo Inc ($CXDO) | 0.0% | 0.0% | 0.1% | 0.5% | 4.5% |
| VeriSign, Inc. ($VRSN) | 2.3% | 4.2% | 3.0% | 3.3% | 3.4% |
| Okta, Inc. ($OKTA) | 4.8% | 3.9% | 2.6% | 5.0% | 2.6% |
| GoDaddy Inc. ($GDDY) | 2.9% | 3.7% | 3.3% | 2.9% | 2.0% |
| |
|---|
| Median (9 companies) | 3.3% | 3.8% | 3.0% | 2.9% | 2.0% |
|---|
| Limelight Networks, Inc. ($LLNW) | 5.7% | 11.2% | 8.2% | 17.3% | 10.9% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| VeriSign, Inc. ($VRSN) | 65.2% | 54.3% | 81.9% | 228.3% | 221.3% |
| Akamai Technologies, Inc. ($AKAM) | 11.9% | 7.9% | 8.2% | 10.8% | 10.9% |
| GoDaddy Inc. ($GDDY) | 2.9% | 2.7% | 4.6% | 6.0% | 8.1% |
| Crexendo Inc ($CXDO) | -114.0% | -44.3% | -10.5% | 35.4% | 7.3% |
| Brightcove Inc. ($BCOV) | -11.3% | -26.9% | -19.0% | -24.8% | -5.2% |
| |
|---|
| Median (9 companies) | -11.3% | -14.6% | 1.4% | -12.4% | -5.2% |
|---|
| Limelight Networks, Inc. ($LLNW) | -42.9% | -5.7% | -3.1% | -8.6% | -5.8% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| GoDaddy Inc. ($GDDY) | 2.3x | 6.8x | 3.9x | 3.4x | 4.9x |
| Akamai Technologies, Inc. ($AKAM) | 0.4x | 0.5x | 0.7x | 2.0x | 1.8x |
| VeriSign, Inc. ($VRSN) | 2.2x | 2.6x | 1.8x | 1.5x | 1.6x |
| Brightcove Inc. ($BCOV) | - | - | - | - | -2.6x |
| Crexendo Inc ($CXDO) | - | - | - | -2.6x | -12.2x |
| |
|---|
| Median (5 companies) | 2.2x | 6.5x | 1.8x | 1.8x | 1.6x |
|---|
| Limelight Networks, Inc. ($LLNW) | - | -1.7x | -1.8x | -0.4x | 5.7x |
