GreenSky, Inc. Net Income dropped on 68.8% and Revenue decreased slightly on 0.75%
03/10/2021 • About GreenSky, Inc. (
$GSKY) • By InTwits
GreenSky, Inc. reported FY2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- EBITDA Margin is declining: 12.6% in FY2020 vs. 25.3% in FY2019 vs. 46.8% in FY2016
- EBITDA Margin is quite volatile: 12.6% in FY2020, 25.3% in FY2019, 38.3% in FY2018, 46.1% in FY2017, 46.8% in FY2016
- GreenSky, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 2.1%. At the same time it's in pair with industry average of 7.3%
- CAPEX is quite volatile: $15m in FY2020, $15m in FY2019, $7m in FY2018, $4m in FY2017, $5m in FY2016
- The company has highly profitable business model: ROIC is 16.9%
- It operates with high leverage: Net Debt/EBITDA is 4.6x while industry average is 1.7x
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue decreased slightly on 0.75%. Revenue decline showed acceleration in FY20Q4 - it was 3.8% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 5.3 pp from -3.5% to 1.9% in 2020. EBITDA Margin declined at -8.9 pp per annum in FY2016-FY2020.
Gross Margin dropped on 11.7 pp from 53.1% to 41.4% in FY2020. Gross Margin stuck to a declining trend at -7.7 pp per annum in the last 5 years. SG&A as a % of Revenue increased on 2.7 pp from 5.4% to 8.1% in FY2020.
Net Income margin decreased on 4.1 pp from 6.0% to 1.9% in FY2020. Net Income margin stuck to a declining trend at -12.7 pp per annum in the last 5 years.
Investments (CAPEX, working capital and M&A)
In FY2020 GreenSky, Inc. had CAPEX/Revenue of 2.8%. CAPEX/Revenue increased slightly on 1.5 pp from 1.3% in FY2017 to 2.8% in FY2020. Average CAPEX/Revenue for the last three years was 2.4%.
Management team
The company's CEO is David Zalik. David Zalik has 15 years tenure with the company. GreenSky, Inc.'s CFO Andrew Kang has spent 6 months years with the company.
Financial and operational results
GreenSky, Inc. ($GSKY) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 263.9 | 325.9 | 414.7 | 529.6 | 525.6 | -0.8% |
| Gross Profit | 184.7 | 236.2 | 254.2 | 281.1 | 217.7 | -22.5% |
| SG&A | 11.7 | 17.1 | 19.2 | 28.5 | 42.5 | 48.8% |
| EBITDA | 123.5 | 150.3 | 159.0 | 133.8 | 66.4 | -50.4% |
| EBIT | 119.8 | 145.6 | 152.8 | | | |
| Interest expence | | | 23.6 | | | |
| Tax | | | 5.5 | | | |
| Net Income | 124.5 | 138.7 | 24.3 | 32.0 | 10.0 | -68.8% |
| Stock Based Compensation | 2.3 | 4.3 | 6.1 | | | |
Balance Sheet
|
|---|
| Cash | 185.2 | 224.6 | 303.4 | 195.8 | 147.8 | -24.5% |
| Accounts Receivable | 16.8 | 18.4 | 15.4 | | | |
| Accounts Payable | 2.7 | 6.8 | 5.4 | | | |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 4.5 | | |
| Long Term Debt | 0.0 | 0.0 | 386.8 | 393.9 | 452.8 | 15.0% |
Cash flow
|
|---|
| Capex | 4.7 | 4.1 | 6.6 | 15.4 | 14.6 | -5.3% |
Ratios
|
|---|
| Revenue growth | 52.1% | 23.5% | 27.2% | 27.7% | -0.8% | |
| EBITDA growth | 29.4% | 21.7% | 5.8% | -15.8% | -50.4% | |
|
|---|
| Gross Margin | 70.0% | 72.5% | 61.3% | 53.1% | 41.4% | -11.7% |
| EBITDA Margin | 46.8% | 46.1% | 38.3% | 25.3% | 12.6% | -12.6% |
| EBIT Margin | 45.4% | 44.7% | 36.8% | | |
| SG&A, % of revenue | 4.4% | 5.2% | 4.6% | 5.4% | 8.1% | 2.7% |
| SBC, % of revenue | 0.9% | 1.3% | 1.5% | | |
| Net Income Margin | 47.2% | 42.6% | 5.8% | 6.0% | 1.9% | -4.1% |
| CAPEX, % of revenue | 1.8% | 1.3% | 1.6% | 2.9% | 2.8% | -0.1% |
|
|---|
| ROIC | | 156.4% | 93.7% | 35.0% | 16.9% | -18.1% |
| ROE | | | | 124.4% | | |
| Net Debt/EBITDA | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x | 3.1x |
| Interest coverage ratio (ICR) | | | 6.5x | | |
| Interest expence / Average debt | | | 12.2% | | | |
People
|
|---|
| Insider ownership | 2.8% | 2.8% | 2.8% | | | |
| Employees | | | 1,088 | | | |
| Revenue/Employee, th. $ | | | 381 | | | |
GreenSky, Inc. ($GSKY) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 121 | 133 | 142 | 129 | | 16.8% | -4.1% | -7.5% | -3.8% |
| EBITDA | -2 | 24 | 14 | 35 | | -114.1% | -50.7% | -74.5% | 157.0% |
| Net Income | -3 | 4 | 1 | 8 | | -215.0% | -66.4% | -93.5% | 302.4% |
Balance Sheet
|
|---|
| Cash | 177 | 148 | 114 | 148 | | -34.0% | -29.5% | -45.0% | -24.5% |
| Long Term Debt | 397 | 464 | 463 | 453 | | 0.0% | 16.1% | 16.1% | 15.0% |
Ratios
|
|---|
| Gross Margin | 40.8% | 51.2% | 35.0% | 39.1% | | -3.3% | -8.3% | -22.5% | -9.1% |
| EBITDA Margin | -1.7% | 18.4% | 9.6% | 27.5% | | -15.3% | -17.4% | -25.3% | 17.2% |
| Net Income Margin | -2.8% | 3.1% | 0.7% | 6.4% | | -5.5% | -5.8% | -8.9% | 4.8% |
Peers in Data Processing & Outsourced Services
Below you can find GreenSky, Inc. benchmarking vs. other companies in Data Processing & Outsourced Services 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 |
|---|
| Square, Inc. ($SQ) | - | 29.6% | 49.0% | 42.9% | 101.5% |
| Global Payments Inc. ($GPN) | - | 37.2% | -15.3% | 45.9% | 51.1% |
| Fiserv, Inc. ($FISV) | - | 3.5% | 2.2% | 74.9% | 45.8% |
| NIC Inc. ($EGOV) | - | 5.8% | 2.5% | 2.7% | 30.0% |
| StoneCo Ltd ($STNE) | - | 74.3% | 106.0% | 63.1% | 28.9% |
| |
|---|
| Median (39 companies) | 6.7% | 10.1% | 7.4% | 8.9% | -3.3% |
|---|
| GreenSky, Inc. ($GSKY) | - | 23.5% | 27.2% | 27.7% | -0.8% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Verra Mobility Corp ($VRRM) | - | 97.4% | 97.5% | 95.7% | 91.5% |
| EVO Payments, Inc. ($EVOP) | - | - | - | 80.2% | 80.8% |
| StoneCo Ltd ($STNE) | 69.7% | 70.8% | 79.5% | 83.4% | 76.8% |
| WEX Inc. ($WEX) | 54.7% | 58.8% | 63.3% | 61.7% | 56.8% |
| Sabre Corporation ($SABR) | 32.2% | 30.1% | 27.8% | 56.6% | 56.6% |
| |
|---|
| Median (31 companies) | 39.2% | 38.9% | 40.9% | 40.3% | 36.5% |
|---|
| GreenSky, Inc. ($GSKY) | 70.0% | 72.5% | 61.3% | 53.1% | 41.4% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Visa Inc. ($V) | 55.6% | 69.2% | 65.8% | 68.1% | 68.5% |
| Mastercard Incorporated ($MA) | 56.9% | 56.5% | 51.8% | 60.9% | 56.6% |
| FleetCor Technologies, Inc. ($FLT) | 52.0% | 50.8% | 55.9% | 57.6% | 52.2% |
| StoneCo Ltd ($STNE) | 31.4% | 26.0% | 53.0% | 62.4% | 52.1% |
| Black Knight, Inc. ($BKI) | 43.0% | 44.6% | 43.3% | 46.0% | 44.9% |
| |
|---|
| Median (38 companies) | 21.2% | 20.6% | 19.2% | 21.7% | 19.1% |
|---|
| GreenSky, Inc. ($GSKY) | 46.8% | 46.1% | 38.3% | 25.3% | 12.6% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| PagSeguro Digital Ltd. ($PAGS) | 6.4% | 4.3% | 1.4% | 5.8% | 22.3% |
| StoneCo Ltd ($STNE) | 7.2% | 18.4% | 8.9% | 12.9% | 11.2% |
| Cardtronics plc ($CATM) | 9.9% | 9.6% | 8.0% | 9.3% | 8.3% |
| Verra Mobility Corp ($VRRM) | - | 11.5% | 7.2% | 6.6% | 6.2% |
| Fiserv, Inc. ($FISV) | 5.3% | 5.0% | 6.2% | 7.1% | 6.1% |
| |
|---|
| Median (38 companies) | 3.2% | 2.9% | 3.2% | 3.3% | 3.1% |
|---|
| GreenSky, Inc. ($GSKY) | 1.8% | 1.3% | 1.6% | 2.9% | 2.8% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Mastercard Incorporated ($MA) | 57.5% | 60.6% | 64.7% | 72.7% | 47.6% |
| International Money Express, Inc. ($IMXI) | -1.3% | -1.4% | 12.1% | 36.0% | 31.4% |
| NIC Inc. ($EGOV) | 63.1% | 52.1% | 39.3% | 26.5% | 30.8% |
| Visa Inc. ($V) | 18.1% | 21.9% | 23.0% | 27.2% | 23.2% |
| Western Union Company (The) ($WU) | 10.7% | 11.9% | 27.8% | 21.5% | 22.1% |
| |
|---|
| Median (39 companies) | 11.6% | 10.6% | 10.2% | 8.2% | 5.5% |
|---|
| GreenSky, Inc. ($GSKY) | - | 156.4% | 93.7% | 35.0% | 16.9% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| WEX Inc. ($WEX) | 6.7x | 4.4x | 3.1x | 3.4x | 12.1x |
| Exela Technologies Inc ($XELAU) | 8.1x | - | 9.7x | - | 10.7x |
| Alliance Data Systems Corporation ($ADS) | 10.7x | 10.1x | 9.0x | 11.7x | 9.2x |
| Verra Mobility Corp ($VRRM) | - | 10.7x | 6.9x | 3.5x | 4.7x |
| Fidelity National Information Services, Inc. ($FIS) | 4.1x | 2.9x | 2.9x | 5.5x | 4.2x |
| |
|---|
| Median (35 companies) | 1.6x | 2.3x | 2.2x | 2.3x | 1.9x |
|---|
| GreenSky, Inc. ($GSKY) | -1.5x | -1.5x | 0.5x | 1.5x | 4.6x |
