OneSpan Inc. reports 63.1% EBITDA decline in 2020 and 6.9 pp EBITDA Margin decline from 12.1% to 5.2%
02/23/2021 • About OneSpan Inc. (
$OSPN) • By InTwits
OneSpan Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- OneSpan Inc. is a company in decline: 2020 revenue growth was -14.9%, 5 years revenue CAGR was -2.2%
- EBITDA Margin is quite volatile: 5.2% in 2020, 12.1% in 2019, 5.7% in 2018, 8.7% in 2017, 10.6% in 2016
- OneSpan Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.8%. At the same time it's in pair with industry average of 3.2%
- CAPEX is quite volatile: $3m in 2020, $7m in 2019, $4m in 2018, $3m in 2017, $2m in 2016
- The company has unprofitable business model: ROIC is -1.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue dropped on 14.9%. Revenue decline showed acceleration in 20Q4 - it was 25.0% YoY. During the last 5 years Revenue growth topped in 2019 at 19.4%. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 6.9 pp from 12.1% to 5.2% in 2020.
Gross Margin increased on 2.9 pp from 67.7% to 70.6% in 2020. SG&A as a % of Revenue increased on 8.1 pp from 41.6% to 49.7% in 2020.
Net Income margin decreased on 5.6 pp from 3.1% to -2.5% in 2020.
Investments (CAPEX, working capital and M&A)
The company's CAPEX/Revenue was 1.4% in 2020. OneSpan Inc. showed almost no change in CAPEX/Revenue from 2017 to 2020. For the last three years the average CAPEX/Revenue was 2.0%. During 2016-2020 CAPEX as a % of Revenue topped in 2019 at 2.9%.
Return on investment
The company operates at negative ROIC (-1.6%) and ROE (-2.1%). ROIC decreased on 7.1 pp from 5.5% to -1.6% in 2020. ROE decreased on 5.2 pp from 3.1% to -2.1% in 2020.
Leverage (Debt)
Debt level is -6.5x Net Debt / EBITDA and 1.4x Debt / EBITDA. Debt increased on 9.5% while cash increased on 4.9%.
OneSpan Inc. has no short term refinancing risk: cash is higher than short term debt (3,096.1%).
Management team
The company's CEO Scott M Clements has spent 3 years with the company. Mark Hoyt is a OneSpan Inc.'s CFO. Mark Hoyt has spent 5 years at the company.
Financial and operational results
FY ended 12/31/2020
OneSpan Inc. ($OSPN) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 192.3 | 193.3 | 212.3 | 253.5 | 215.7 | -14.9% |
| Gross Profit | 130.7 | 134.5 | 147.5 | 171.5 | 152.3 | -11.2% |
| SG&A | 89.0 | 96.4 | 105.4 | 105.4 | 107.2 | 1.7% |
| EBITDA | 20.4 | 16.8 | 12.2 | 30.7 | 11.3 | -63.1% |
| Net Income | 10.5 | -22.4 | 3.8 | 7.9 | -5.5 | -169.4% |
Balance Sheet
|
|---|
| Cash | 49.3 | 78.7 | 76.7 | 84.3 | 88.4 | 4.9% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 2.6 | 2.9 | 8.3% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 11.3 | 12.4 | 9.7% |
Cash flow
|
|---|
| Capex | 2.0 | 3.1 | 3.7 | 7.5 | 3.1 | -58.4% |
Ratios
|
|---|
| Revenue growth | -20.4% | 0.5% | 9.8% | 19.4% | -14.9% | |
| EBITDA growth | -64.1% | -17.6% | -27.6% | 152.1% | -63.1% | |
|
|---|
| Gross Margin | 67.9% | 69.6% | 69.5% | 67.7% | 70.6% | 2.9% |
| EBITDA Margin | 10.6% | 8.7% | 5.7% | 12.1% | 5.2% | -6.9% |
| SG&A, % of revenue | 46.3% | 49.9% | 49.6% | 41.6% | 49.7% | 8.1% |
| Net Income Margin | 5.5% | -11.6% | 1.8% | 3.1% | -2.5% | -5.6% |
| CAPEX, % of revenue | 1.1% | 1.6% | 1.7% | 2.9% | 1.4% | -1.5% |
|
|---|
| ROIC | 3.9% | 2.5% | 0.0% | 5.5% | -1.6% | -7.1% |
| ROE | 4.2% | -9.1% | 1.6% | 3.1% | -2.1% | -5.2% |
| Net Debt/EBITDA | -2.4x | -4.7x | -6.3x | -2.3x | -6.5x | -4.2x |
OneSpan Inc. ($OSPN) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 56 | 55 | 51 | 53 | | 18.7% | -2.2% | -35.5% | -25.0% |
| EBITDA | 5 | 3 | 1 | 2 | | - | 49.3% | -96.6% | -79.8% |
| Net Income | 0 | -2 | -2 | -2 | | - | - | -114.1% | -138.3% |
Balance Sheet
|
|---|
| Cash | 80 | 84 | 86 | 88 | | 13.9% | 71.0% | 56.6% | 4.9% |
| Long Term Debt | 13 | 12 | 13 | 12 | | 60.5% | 57.2% | 10.8% | 9.7% |
Ratios
|
|---|
| Gross Margin | 71.6% | 66.8% | 69.9% | 74.2% | | 5.2% | -1.3% | 3.4% | 4.5% |
| EBITDA Margin | 8.9% | 4.6% | 1.4% | 3.6% | | 11.9% | 1.6% | -25.6% | -9.9% |
| Net Income Margin | 0.2% | -3.7% | -3.3% | -3.3% | | 12.1% | 0.8% | -18.2% | -9.8% |
Peers in Systems Software
Below you can find OneSpan Inc. 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. ($TENB) | - | 50.9% | 42.4% | 32.6% | 24.2% |
| |
|---|
| Median (23 companies) | 12.9% | 16.6% | 20.4% | 15.9% | 15.1% |
|---|
| OneSpan Inc. ($OSPN) | - | 0.5% | 9.8% | 19.4% | -14.9% |
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. ($TENB) | 88.6% | 86.4% | 83.9% | 82.8% | 82.4% |
| |
|---|
| Median (23 companies) | 73.6% | 74.1% | 75.0% | 76.6% | 77.8% |
|---|
| OneSpan Inc. ($OSPN) | 67.9% | 69.6% | 69.5% | 67.7% | 70.6% |
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. ($FTNT) | 7.2% | 11.1% | 15.9% | 19.8% | 23.9% |
| |
|---|
| Median (23 companies) | -9.8% | -5.4% | -4.7% | -1.4% | -1.1% |
|---|
| OneSpan Inc. ($OSPN) | 10.6% | 8.7% | 5.7% | 12.1% | 5.2% |
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. ($PFPT) | 9.2% | 9.0% | 4.1% | 4.0% | 6.9% |
| |
|---|
| Median (23 companies) | 2.1% | 2.4% | 2.6% | 3.8% | 3.4% |
|---|
| OneSpan Inc. ($OSPN) | 1.1% | 1.6% | 1.7% | 2.9% | 1.4% |
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 ($PRGS) | -4.9% | 13.5% | 18.5% | 7.6% | 16.0% |
| |
|---|
| Median (23 companies) | -4.3% | -4.7% | -1.9% | -6.4% | -6.4% |
|---|
| OneSpan Inc. ($OSPN) | 3.9% | 2.5% | 0.0% | 5.5% | -1.6% |
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. ($CYBR) | -4.1x | -5.7x | -4.5x | -3.6x | 0.9x |
| |
|---|
| Median (11 companies) | -1.0x | -0.3x | -0.4x | -0.3x | 0.9x |
|---|
| OneSpan Inc. ($OSPN) | -2.4x | -4.7x | -6.3x | -2.3x | -6.5x |
