Benefitfocus, Inc. reports 9.3% revenue decline in 2020 and 8.9 pp EBITDA Margin growth from -0.50% to 8.4%
03/08/2021 • About Benefitfocus, Inc. (
$BNFT) • By InTwits
Benefitfocus, Inc. reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is expanding: 8.4% in 2020 vs. -0.5% in 2019 vs. -8.2% in 2016
- Benefitfocus, 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 -3.4%
- Benefitfocus, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.3%. At the same time it's a lot of higher than industry average of 3.7%.
- CAPEX is quite volatile: $16m in 2020, $29m in 2019, $72m in 2018, $67m in 2017, $49m in 2016
- The company has unprofitable business model: ROIC is -1.0%
- It operates with high leverage: Net Debt/EBITDA is 8.0x while industry average is 18.4x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Benefitfocus, Inc.'s Revenue decreased on 9.3%. Revenue decline showed acceleration in 20Q4 - it was 12.5% YoY. Revenue decline happened at the same time with EBITDA margin expansion. EBITDA Margin increased on 8.9 pp from -0.50% to 8.4% in 2020. During 2016-2020 EBITDA Margin bottomed in 2017 at -9.3% and was growing since that time.
Gross Margin showed almost no change in 2020. During 2016-2020 Gross Margin bottomed in 2017 at 46.2% and was growing since that time. SG&A as a % of Revenue decreased on 7.5 pp from 41.0% to 33.5% in 2020. During 2016-2020 SG&A as a % of Revenue topped in 2018 at 46.9% and was declining since that time.
Net Income margin increased on 6.3 pp from -15.4% to -9.1% in 2020. During 2016-2020 Net Income margin bottomed in 2017 at -21.2% and was growing since that time.
Investments (CAPEX, working capital and M&A)
Benefitfocus, Inc.'s CAPEX/Revenue was 4.9% in 2020. CAPEX/Revenue increased slightly on 1.4 pp from 3.5% in 2017 to 4.9% in 2020. It's average CAPEX/Revenue for the last three years was 4.2%. Benefitfocus, Inc. invested a big chunk of EBITDA (58.3%) to CAPEX which didn't stop revenue from falling. During 2016-2020 CAPEX as a % of Revenue bottomed in 2018 at 3.2% and was growing since that time.
Leverage (Debt)
Company's Net Debt / EBITDA is 8.0x and Debt / EBITDA is 12.1x. Net Debt / EBITDA surged8.0x from to 8.0x in 2020. Debt decreased on 4.4% while cash dropped on 30.7%.
Benefitfocus, Inc. has no short term refinancing risk: cash is higher than short term debt (1,449.2%).
Management team
Benefitfocus, Inc.'s CEO is Stephen M Swad "Steve". Stephen M Swad "Steve" has 7 months tenure with the company. The company's CFO is Alpana Wegner. Alpana Wegner has 7 months years tenure at the company.
Financial and operational results
FY ended 12/31/2020
Benefitfocus, Inc. ($BNFT) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 233.3 | 236.8 | 258.7 | 295.7 | 268.1 | -9.3% |
| Gross Profit | 112.7 | 109.5 | 129.4 | 151.6 | 138.8 | -8.5% |
| SG&A | 88.2 | 97.9 | 121.2 | 121.4 | 89.9 | -25.9% |
| EBITDA | -19.1 | -22.0 | -23.9 | -1.5 | 22.5 | |
| Net Income | -40.1 | -50.3 | -52.6 | -45.5 | -24.3 | |
Balance Sheet
|
|---|
| Cash | 56.9 | 55.3 | 190.9 | 131.0 | 90.7 | -30.7% |
| Short Term Debt | 22.6 | 27.4 | 4.5 | 7.2 | 6.3 | -13.2% |
| Long Term Debt | 78.2 | 87.8 | 233.8 | 276.5 | 264.9 | -4.2% |
Cash flow
|
|---|
| Capex | 12.7 | 8.3 | 8.3 | 13.2 | 13.1 | -1.2% |
Ratios
|
|---|
| Revenue growth | 26.0% | 1.5% | 9.2% | 14.3% | -9.3% | |
| EBITDA growth | -55.2% | 15.4% | 8.4% | -93.8% | -1,619.6% | |
|
|---|
| Gross Margin | 48.3% | 46.2% | 50.0% | 51.3% | 51.7% | 0.5% |
| EBITDA Margin | -8.2% | -9.3% | -9.2% | -0.5% | 8.4% | 8.9% |
| SG&A, % of revenue | 37.8% | 41.3% | 46.9% | 41.0% | 33.5% | -7.5% |
| Net Income Margin | -17.2% | -21.2% | -20.3% | -15.4% | -9.1% | 6.3% |
| CAPEX, % of revenue | 5.4% | 3.5% | 3.2% | 4.5% | 4.9% | 0.4% |
|
|---|
| ROIC | -55.8% | -43.3% | -23.7% | -10.0% | -1.0% | 9.0% |
| Net Debt/EBITDA | | | | | 8.0x |
Benefitfocus, Inc. ($BNFT) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 66 | 62 | 64 | 76 | | -3.1% | -9.3% | -11.3% | -12.5% |
| EBITDA | 0 | 0 | 7 | 15 | | - | - | - | 100.3% |
| Net Income | -11 | -12 | -4 | 3 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 115 | 183 | 108 | 91 | | -20.4% | 32.6% | -17.2% | -30.7% |
| Short Term Debt | 8 | 7 | 6 | 6 | | 11.6% | -3.5% | -15.6% | -13.2% |
| Long Term Debt | 284 | 276 | 262 | 265 | | 5.7% | 2.2% | -4.4% | -4.2% |
Ratios
|
|---|
| Gross Margin | 48.7% | 51.1% | 52.6% | 54.1% | | -3.2% | -1.1% | 2.3% | 3.3% |
| EBITDA Margin | 0.3% | 0.2% | 10.3% | 19.8% | | 5.5% | 6.0% | 12.4% | 11.2% |
| Net Income Margin | -16.8% | -19.1% | -6.9% | 4.1% | | 4.0% | 2.7% | 10.6% | 8.4% |
Peers in Application Software
Below you can find Benefitfocus, Inc. benchmarking vs. other companies in Application 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 |
|---|
| 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| Benefitfocus, Inc. ($BNFT) | - | 1.5% | 9.2% | 14.3% | -9.3% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| Benefitfocus, Inc. ($BNFT) | 48.3% | 46.2% | 50.0% | 51.3% | 51.7% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 6.8% |
|---|
| Benefitfocus, Inc. ($BNFT) | -8.2% | -9.3% | -9.2% | -0.5% | 8.4% |
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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 2.9% | 2.5% |
|---|
| Benefitfocus, Inc. ($BNFT) | 5.4% | 3.5% | 3.2% | 4.5% | 4.9% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.2% | -2.2% |
|---|
| Benefitfocus, Inc. ($BNFT) | -55.8% | -43.3% | -23.7% | -10.0% | -1.0% |
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. ($SNCR) | - | - | - | - | 11.6x |
| |
|---|
| Median (53 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.0x |
|---|
| Benefitfocus, Inc. ($BNFT) | - | - | - | - | 8.0x |
