Sapiens International Corporation N.V. reports 28.7% Net Income growth in 2020 and 17.6% Revenue growth
02/25/2021 • About Sapiens International Corporation N.V. (
$SPNS) • By InTwits
Sapiens International Corporation N.V. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Sapiens International Corporation N.V. is a fast growth stock: FY2020 revenue growth was 17.6%, 5 year revenue CAGR was 15.6% at FY2020 ROIC 9.9%
- EBITDA Margin is quite volatile: 17.9% in FY2020, 19.1% in FY2019, 14.8% in FY2018, 6.3% in FY2017, 16.1% in FY2016
- Sapiens International Corporation N.V. has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.6%. At the same time it's in pair with industry average of 5.5%
- CAPEX is quite volatile: $3m in FY2020, $11m in FY2019, $2m in FY2018, $3m in FY2017, $5m in FY2016
- The company has business model with low profitability: ROIC is 9.9%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Sapiens International Corporation N.V.'s Revenue jumped on 17.6%. Revenue growth showed small slowdown in FY20Q4 - it was 16.9% YoY. 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.
Gross Margin increased slightly on 0.96 pp from 39.8% to 40.7% in FY2020. During FY2016-FY2020 Gross Margin bottomed in FY2017 at 34.7% and was growing since that time. SG&A as a % of Revenue increased slightly on 1.5 pp from 16.7% to 18.2% in FY2020.
Net Income margin increased slightly on 0.76 pp from 8.1% to 8.8% in FY2020. During FY2016-FY2020 Net Income margin bottomed in FY2017 at 0.13% and was growing since that time.
Investments (CAPEX, working capital and M&A)
Sapiens International Corporation N.V.'s CAPEX/Revenue was 0.69% in FY2020. The company's CAPEX/Revenue showed almost no change from FY2017 to FY2020. It's average CAPEX/Revenue for the last three years was 1.6%.
Return on investment
The company operates at low ROIC (9.9%) and ROE (11.1%). ROIC decreased on 4.3 pp from 14.2% to 9.9% in FY2020. ROE decreased slightly on 1.2 pp from 12.4% to 11.1% in FY2020.
Leverage (Debt)
Company's Net Debt / EBITDA is 0.4x and Debt / EBITDA is 2.6x. Net Debt / EBITDA dropped on 0.5x from 0.9x to 0.4x in FY2020. Debt surged on 47.1% while cash jumped on 130%.
Sapiens International Corporation N.V. has no short term refinancing risk: cash is higher than short term debt (513.3%).
Valuation and dividends
The company's trades at EV/EBITDA 24.3x and P/E 48.4x.
Management team
Roni Al-Dor is a the company's CEO. Roni Al-Dor has spent 15 years with the company. Sapiens International Corporation N.V.'s CFO Roni Giladi has spent 13 years with the company.
Financial and operational results
Sapiens International Corporation N.V. ($SPNS) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 216.2 | 269.2 | 289.7 | 325.7 | 382.9 | 17.6% |
| Gross Profit | 85.8 | 93.5 | 109.6 | 129.5 | 156.0 | 20.4% |
| SG&A | 44.5 | 60.6 | 52.1 | 54.3 | 69.6 | 28.3% |
| EBITDA | 34.9 | 16.9 | 42.9 | 62.3 | 68.4 | 9.8% |
| EBIT | | | | 43.1 | | |
| Net Income | 19.3 | 0.4 | 13.8 | 26.2 | 33.8 | 28.7% |
| Stock Based Compensation | | | | 1.4 | | |
Balance Sheet
|
|---|
| Cash | 60.9 | 71.5 | 64.6 | 66.3 | 152.6 | 130.1% |
| Accounts Receivable | | | | 34.6 | | |
| Accounts Payable | | | | 5.1 | | |
| Short Term Debt | 0.0 | 0.0 | 9.9 | 18.2 | 29.7 | 63.2% |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 102.2 | 147.4 | 44.2% |
Cash flow
|
|---|
| Capex | 4.7 | 2.6 | 1.9 | 11.5 | 2.6 | -77.1% |
| Dividends | | | | 11.0 | | |
Ratios
|
|---|
| Revenue growth | 16.5% | 24.5% | 7.6% | 12.4% | 17.6% | |
| EBITDA growth | 2.6% | -51.6% | 154.2% | 45.2% | 9.8% | |
|
|---|
| Gross Margin | 39.7% | 34.7% | 37.8% | 39.8% | 40.7% | 1.0% |
| EBITDA Margin | 16.1% | 6.3% | 14.8% | 19.1% | 17.9% | -1.3% |
| EBIT Margin | | | | 13.2% | |
| SG&A, % of revenue | 20.6% | 22.5% | 18.0% | 16.7% | 18.2% | 1.5% |
| SBC, % of revenue | | | | 0.4% | |
| Net Income Margin | 8.9% | 0.1% | 4.8% | 8.1% | 8.8% | 0.8% |
| CAPEX, % of revenue | 2.2% | 1.0% | 0.7% | 3.5% | 0.7% | -2.8% |
|
|---|
| ROIC | 13.2% | 0.5% | 10.7% | 14.2% | 9.9% | -4.3% |
| ROE | 10.3% | 0.2% | 6.9% | 12.4% | 11.1% | -1.2% |
| Net Debt/EBITDA | -1.7x | -4.2x | -1.3x | 0.9x | 0.4x | -0.5x |
People
|
|---|
| Employees | | | | 2,959 | | |
| Revenue/Employee, th. $ | | | | 110 | | |
Sapiens International Corporation N.V. ($SPNS) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 91 | 93 | 98 | 102 | | 17.6% | 16.3% | 17.6% | 16.9% |
| EBITDA | 16 | 18 | 18 | 17 | | 19.3% | 27.2% | -25.5% | 14.6% |
| Net Income | 7 | 9 | 9 | 8 | | 36.4% | 32.8% | 33.4% | 18.8% |
Balance Sheet
|
|---|
| Cash | 80 | 128 | 132 | 153 | | 26.3% | 66.2% | 80.4% | 131.2% |
| Short Term Debt | 38 | 29 | 29 | 30 | | 152.1% | 60.4% | 63.1% | 65.1% |
| Long Term Debt | 90 | 143 | 144 | 147 | | 2.2% | 197.4% | 35.5% | 44.6% |
Ratios
|
|---|
| Gross Margin | 40.1% | 41.1% | 41.0% | 40.7% | | 1.1% | 1.1% | 1.0% | 0.7% |
| EBITDA Margin | 17.1% | 19.1% | 18.3% | 16.9% | | 0.2% | 1.6% | -10.6% | -0.3% |
| Net Income Margin | 7.5% | 10.0% | 9.6% | 8.2% | | 1.0% | 1.2% | 1.1% | 0.1% |
Peers in Application Software
Below we provide Sapiens International Corporation N.V. 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.2% | 19.5% | 14.5% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | - | 24.5% | 7.6% | 12.4% | 17.6% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 39.7% | 34.7% | 37.8% | 39.8% | 40.7% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 16.1% | 6.3% | 14.8% | 19.1% | 17.9% |
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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 2.9% | 2.6% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 2.2% | 1.0% | 0.7% | 3.5% | 0.7% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| Sapiens International Corporation N.V. ($SPNS) | 13.2% | 0.5% | 10.7% | 14.2% | 9.9% |
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. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.6x | 0.4x | 0.0x |
|---|
| Sapiens International Corporation N.V. ($SPNS) | -1.7x | -4.2x | -1.3x | 0.9x | 0.4x |
