Issuer Direct Corporation Net Income surged on 207% and EBITDA Margin increased on 9.1 pp from 14.6% to 23.7%
03/04/2021 • About Issuer Direct Corporation (
$ISDR) • By InTwits
Issuer Direct Corporation reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Issuer Direct Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.8%.
- The company has business model with low profitability: ROIC is 9.1%
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 surged on 13.7%. Revenue growth showed acceleration in 20Q4 - it increased 19.8% YoY. Revenue growth was accelerating on average by 3.0 pp per annum in 2016-2020. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 9.1 pp from 14.6% to 23.7% in 2020. During 2016-2020 EBITDA Margin bottomed in 2019 at 14.6%.
Gross Margin increased slightly on 1.9 pp from 68.8% to 70.8% in 2020. During 2016-2020 Gross Margin bottomed in 2019 at 68.8%. SG&A as a % of Revenue decreased on 5.3 pp from 53.0% to 47.7% in 2020.
Net Income margin increased on 7.2 pp from 4.2% to 11.4% in 2020.
Investments (CAPEX, working capital and M&A)
Issuer Direct Corporation's CAPEX/Revenue was 0.15% in 2020. CAPEX/Revenue showed almost no change from 2017 to 2020. It's average CAPEX/Revenue for the last three years was 1.0%.
Return on investment
The company operates at low ROIC (9.1%) and ROE (7.8%). ROIC increased on 7.0 pp from 2.0% to 9.1% in 2020. ROE increased on 5.1 pp from 2.7% to 7.8% in 2020. During the last 5 years ROIC bottomed in 2019 at 2.0%. During 2016-2020 ROE bottomed in 2019 at 2.7%.
Leverage (Debt)
Debt level is -3.9x Net Debt / EBITDA and 0.5x Debt / EBITDA. Debt dropped on 21.1% while cash jumped on 24.0%.
Issuer Direct Corporation has no short term refinancing risk: cash is higher than short term debt (5,014.4%).
Valuation and dividends
Issuer Direct Corporation's trades at EV/EBITDA 11.7x and P/E 32.5x.
Financial and operational results
FY ended 12/31/2020
Issuer Direct Corporation ($ISDR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 12.059 | 12.628 | 14.232 | 16.295 | 18.526 | 13.7% |
| Gross Profit | 9.035 | 9.233 | 10.129 | 11.215 | 13.111 | 16.9% |
| SG&A | 5.786 | 5.988 | 7.087 | 8.637 | 8.841 | 2.4% |
| EBITDA | 3.012 | 2.763 | 2.560 | 2.382 | 4.389 | 84.3% |
| Net Income | 1.555 | 1.871 | 0.837 | 0.686 | 2.106 | 207.0% |
Balance Sheet
|
|---|
| Cash | 5.339 | 4.917 | 17.222 | 15.766 | 19.556 | 24.0% |
| Short Term Debt | 0.000 | 0.288 | 0.320 | 0.685 | 0.390 | -43.1% |
| Long Term Debt | 0.000 | 0.570 | 0.276 | 2.309 | 1.971 | -14.6% |
Cash flow
|
|---|
| Capex | 0.112 | 0.011 | 0.051 | 0.420 | 0.027 | -93.6% |
Ratios
|
|---|
| Revenue growth | 3.8% | 4.7% | 12.7% | 14.5% | 13.7% | |
| EBITDA growth | 73.7% | -8.3% | -7.3% | -7.0% | 84.3% | |
|
|---|
| Gross Margin | 74.9% | 73.1% | 71.2% | 68.8% | 70.8% | 1.9% |
| EBITDA Margin | 25.0% | 21.9% | 18.0% | 14.6% | 23.7% | 9.1% |
| SG&A, % of revenue | 48.0% | 47.4% | 49.8% | 53.0% | 47.7% | -5.3% |
| Net Income Margin | 12.9% | 14.8% | 5.9% | 4.2% | 11.4% | 7.2% |
| CAPEX, % of revenue | 0.9% | 0.1% | 0.4% | 2.6% | 0.1% | -2.4% |
|
|---|
| ROIC | 19.2% | 15.5% | 5.5% | 2.0% | 9.1% | 7.0% |
| ROE | 16.3% | 15.7% | 4.3% | 2.7% | 7.8% | 5.1% |
| Net Debt/EBITDA | -1.8x | -1.5x | -6.5x | -5.4x | -3.9x | 1.4x |
Issuer Direct Corporation ($ISDR) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 4 | 5 | 5 | 5 | | -3.9% | 18.0% | 21.5% | 19.8% |
| EBITDA | 1 | 1 | 1 | 1 | | 18.2% | 143.8% | 128.6% | 39.1% |
| Net Income | 0 | 1 | 1 | 0 | | 10.2% | 264.2% | 294.5% | 362.3% |
Balance Sheet
|
|---|
| Cash | 16 | 17 | 18 | 20 | | 8.3% | 12.5% | 16.6% | 24.0% |
| Short Term Debt | 0 | 1 | 1 | 0 | | -32.5% | 68.8% | 88.6% | -43.1% |
| Long Term Debt | 2 | 2 | 2 | 2 | | 525.3% | 510.9% | 495.4% | -14.6% |
Ratios
|
|---|
| Gross Margin | 68.8% | 72.1% | 71.6% | 70.2% | | -0.0% | 2.3% | 2.0% | 3.2% |
| EBITDA Margin | 17.7% | 29.5% | 30.5% | 15.8% | | 3.3% | 15.2% | 14.3% | 2.2% |
| Net Income Margin | 5.6% | 15.8% | 16.2% | 6.7% | | 0.7% | 10.7% | 11.2% | 5.0% |
Peers in Application Software
Below we provide Issuer Direct 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| Issuer Direct Corporation ($ISDR) | - | 4.7% | 12.7% | 14.5% | 13.7% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 63.8% | 64.4% | 65.3% | 67.9% | 69.4% |
|---|
| Issuer Direct Corporation ($ISDR) | 74.9% | 73.1% | 71.2% | 68.8% | 70.8% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| Issuer Direct Corporation ($ISDR) | 25.0% | 21.9% | 18.0% | 14.6% | 23.7% |
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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| Issuer Direct Corporation ($ISDR) | 0.9% | 0.1% | 0.4% | 2.6% | 0.1% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| Issuer Direct Corporation ($ISDR) | 19.2% | 15.5% | 5.5% | 2.0% | 9.1% |
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. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.6x | 0.4x | 0.3x |
|---|
| Issuer Direct Corporation ($ISDR) | -1.8x | -1.5x | -6.5x | -5.4x | -3.9x |
