MIND C.T.I. Ltd. EBITDA increased on 9.1% and EBITDA Margin increased slightly on 1.3 pp from 22.9% to 24.2%
03/04/2021 • About MIND C.T.I. Ltd. (
$MNDO) • By InTwits
MIND C.T.I. Ltd. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- MIND C.T.I. Ltd. has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.3%.
- The company has highly profitable business model: ROIC is 22.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
MIND C.T.I. Ltd.'s Revenue increased on 3.1%. Revenue growth showed slowdown in 20Q4 - it was -3.5% YoY. During the last 5 years Revenue growth topped in 2019 at 25.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 7.3 pp from 0.38% to 7.6% in FY2020.
Gross Margin decreased on 3.0 pp from 55.3% to 52.3% in 2020. SG&A as a % of Revenue decreased on 2.7 pp from 14.6% to 12.0% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2017 at 16.2% and was declining since that time.
Net Income margin increased slightly on 0.68 pp from 22.3% to 23.0% in 2020.
Investments (CAPEX, working capital and M&A)
In 2020 MIND C.T.I. Ltd. had CAPEX/Revenue of 0.29%. The company showed almost no change in CAPEX/Revenue from 2017 to 2020. It's average CAPEX/Revenue for the last three years was 0.26%.
Return on investment
The company operates at high and attractive ROIC (22.6%) and ROE (23.9%). ROIC showed almost no change in 2020. ROE showed almost no change in 2020.
Leverage (Debt)
Company's Net Debt / EBITDA is -1.1x and Debt / EBITDA is 0.3x. Debt surged on 44.2% while cash jumped on 27.5%.
MIND C.T.I. Ltd. has no short term refinancing risk: cash is higher than short term debt (2,387.3%).
Valuation and dividends
The company's trades at EV/EBITDA 8.9x and P/E 10.6x.
Financial and operational results
FY ended 12/31/2020
MIND C.T.I. Ltd. ($MNDO) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 18.052 | 18.062 | 18.135 | 22.664 | 23.374 | 3.1% |
| Gross Profit | 11.221 | 11.029 | 11.989 | 12.538 | 12.221 | -2.5% |
| SG&A | 2.498 | 2.926 | 2.892 | 3.312 | 2.795 | -15.6% |
| EBITDA | 5.367 | 4.790 | 5.434 | 5.191 | 5.663 | 9.1% |
| Net Income | 4.203 | 5.612 | 5.134 | 5.065 | 5.383 | 6.3% |
Balance Sheet
|
|---|
| Cash | 9.165 | 5.014 | 2.739 | 6.479 | 8.260 | 27.5% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.292 | 0.346 | 18.5% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 0.983 | 1.492 | 51.8% |
Cash flow
|
|---|
| Capex | 0.068 | 0.071 | 0.046 | 0.052 | 0.068 | 30.8% |
Ratios
|
|---|
| Revenue growth | -13.7% | 0.1% | 0.4% | 25.0% | 3.1% | |
| EBITDA growth | -18.5% | -10.8% | 13.4% | -4.5% | 9.1% | |
|
|---|
| Gross Margin | 62.2% | 61.1% | 66.1% | 55.3% | 52.3% | -3.0% |
| EBITDA Margin | 29.7% | 26.5% | 30.0% | 22.9% | 24.2% | 1.3% |
| SG&A, % of revenue | 13.8% | 16.2% | 15.9% | 14.6% | 12.0% | -2.7% |
| Net Income Margin | 23.3% | 31.1% | 28.3% | 22.3% | 23.0% | 0.7% |
| CAPEX, % of revenue | 0.4% | 0.4% | 0.3% | 0.2% | 0.3% | 0.1% |
|
|---|
| ROIC | 24.0% | 22.2% | 25.5% | 22.7% | 22.6% | -0.2% |
| ROE | 19.5% | 26.5% | 24.4% | 23.6% | 23.9% | 0.3% |
| Net Debt/EBITDA | -1.7x | -1.0x | -0.5x | -1.0x | -1.1x | -0.1x |
MIND C.T.I. Ltd. ($MNDO) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 6 | 6 | 6 | 6 | | 34.7% | -1.7% | -3.5% | -3.5% |
| EBITDA | 1 | 1 | 1 | 1 | | -10.9% | 35.7% | 10.6% | 8.6% |
| Net Income | 1 | 1 | 1 | 1 | | -21.4% | 35.0% | 17.8% | 4.5% |
Balance Sheet
|
|---|
| Cash | 11 | 4 | 8 | 8 | | 249.3% | 10.5% | 70.4% | 27.5% |
| Short Term Debt | 0 | 0 | 0 | 0 | | -23.2% | -20.3% | -6.0% | 18.5% |
| Long Term Debt | 1 | 1 | 1 | 1 | | 226.7% | 66.7% | 87.5% | 51.8% |
Ratios
|
|---|
| Gross Margin | 52.1% | 53.9% | 51.7% | 51.6% | | -20.8% | 4.1% | 0.7% | -3.3% |
| EBITDA Margin | 22.2% | 25.8% | 25.2% | 23.8% | | -11.3% | 7.1% | 3.2% | 2.6% |
| Net Income Margin | 19.5% | 25.1% | 23.8% | 23.9% | | -13.9% | 6.8% | 4.3% | 1.8% |
Peers in Application Software
Below we provide MIND C.T.I. Ltd. 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.4% | 14.7% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | - | 0.1% | 0.4% | 25.0% | 3.1% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 65.3% | 68.4% | 70.6% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 62.2% | 61.1% | 66.1% | 55.3% | 52.3% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -4.2% | -3.3% | 2.7% | 6.8% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 29.7% | 26.5% | 30.0% | 22.9% | 24.2% |
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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 0.4% | 0.4% | 0.3% | 0.2% | 0.3% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -11.8% | -10.6% | -4.5% | -2.2% |
|---|
| MIND C.T.I. Ltd. ($MNDO) | 24.0% | 22.2% | 25.5% | 22.7% | 22.6% |
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. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.3x |
|---|
| MIND C.T.I. Ltd. ($MNDO) | -1.7x | -1.0x | -0.5x | -1.0x | -1.1x |
