Neonode Inc. revenue decreased on 10.0% and EBITDA Margin dropped on 16.6 pp from -64.5% to -81.1%
03/10/2021 • About Neonode Inc. (
$NEON) • By InTwits
Neonode Inc. reported 2020 financial results today. Here are the key drivers of the company's long term financial model:
- Neonode Inc. is a company in decline: 2020 revenue growth was -10.0%, 5 years revenue CAGR was -11.6%
- The company operates at negative EBITDA Margin: -81.1%
- Neonode Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 was 0.0% while average EBITDA Margin was -51.2% for the sames years
- Neonode Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.2%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $0m in 2020, $0m in 2019, $0m in 2018, $1m in 2017, $1m in 2016
- The company has unprofitable business model: ROIC is -63.6%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
Neonode Inc.'s Revenue decreased on 10.0%. Annual revenue decline showed slowdown in 20Q4 - revenue jumped on 51.0%. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin increased on 8.1 pp from -2.3% to 5.9% in FY2020. During the last 5 years EBITDA Margin topped in 2018 at -33.6% and was declining since that time.
Gross Margin decreased on 7.7 pp from 89.7% to 82.0% in 2020. SG&A as a % of Revenue jumped on 19.2 pp from 97.1% to 116% in 2020. SG&A as a % of Revenue followed a growing trend at 12.2 pp per annum in 2016-2020.
Net Income margin dropped on 13.9 pp from -79.7% to -93.7% in 2020. During the last 5 years Net Income margin topped in 2018 at -35.8% and was declining since that time.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 1.0%. Neonode Inc.'s CAPEX/Revenue decreased on 5.4 pp from 6.4% in 2017 to 1.0% in 2020. It's average CAPEX/Revenue for the last three years was 1.7%. CAPEX as a % of Revenue declined at -2.2 pp per annum in 2016-2020.
Return on investment
The company operates at negative ROIC (-63.6%) and ROE (-52.4%). ROIC increased on 4.3 pp from -67.9% to -63.6% in 2020. ROE increased on 5.7 pp from -58.1% to -52.4% in 2020.
Leverage (Debt)
Debt level is -13.8x Net Debt / EBITDA and Debt / EBITDA. Debt jumped on 19.0% while cash jumped on 344%.
Neonode Inc. has no short term refinancing risk: cash is higher than short term debt (822.7%).
Management team
The company's CEO Urban Forssell has spent 1 year with the company. Maria Ek is a the company's CFO. Maria Ek has spent 1 year at the company.
Financial and operational results
FY ended 12/31/2020
Neonode Inc. ($NEON) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 10.213 | 10.241 | 8.538 | 6.646 | 5.984 | -10.0% |
| Gross Profit | 8.875 | 7.898 | 7.617 | 5.963 | 4.906 | -17.7% |
| SG&A | 6.950 | 7.296 | 6.216 | 6.454 | 6.958 | 7.8% |
| EBITDA | -4.784 | -4.523 | -2.869 | -4.287 | -4.852 | |
| Net Income | -5.291 | -4.705 | -3.060 | -5.298 | -5.605 | |
Balance Sheet
|
|---|
| Cash | 3.476 | 5.796 | 6.555 | 2.357 | 10.473 | 344.3% |
| Short Term Debt | 0.228 | 0.568 | 0.570 | 0.900 | 1.273 | 41.4% |
| Long Term Debt | 0.960 | 1.681 | 1.133 | 0.566 | 0.472 | -16.6% |
Cash flow
|
|---|
| Capex | 0.987 | 0.656 | 0.236 | 0.089 | 0.060 | -32.6% |
Ratios
|
|---|
| Revenue growth | -8.1% | 0.3% | -16.6% | -22.2% | -10.0% | |
| EBITDA growth | -36.3% | -5.5% | -36.6% | 49.4% | 13.2% | |
|
|---|
| Gross Margin | 86.9% | 77.1% | 89.2% | 89.7% | 82.0% | -7.7% |
| EBITDA Margin | -46.8% | -44.2% | -33.6% | -64.5% | -81.1% | -16.6% |
| SG&A, % of revenue | 68.1% | 71.2% | 72.8% | 97.1% | 116.3% | 19.2% |
| Net Income Margin | -51.8% | -45.9% | -35.8% | -79.7% | -93.7% | -13.9% |
| CAPEX, % of revenue | 9.7% | 6.4% | 2.8% | 1.3% | 1.0% | -0.3% |
|
|---|
| ROIC | -137.2% | -71.0% | -35.9% | -67.9% | -63.6% | 4.3% |
| ROE | -166.6% | -69.6% | -29.3% | -58.1% | -52.4% | 5.7% |
Neonode Inc. ($NEON) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 1 | 1 | 1 | 2 | | -35.7% | -55.7% | 14.1% | 51.0% |
| EBITDA | -1 | -1 | -1 | -1 | | - | - | - | - |
| Net Income | -1 | -2 | -2 | -1 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 1 | 2 | 12 | 10 | | -79.6% | -61.8% | 303.7% | 344.3% |
| Short Term Debt | 1 | 1 | 1 | 1 | | -24.1% | 29.5% | -20.4% | 41.4% |
| Long Term Debt | 0 | 0 | 0 | 0 | | -69.4% | -61.5% | -60.7% | -16.6% |
Ratios
|
|---|
| Gross Margin | 96.6% | 83.8% | 86.6% | 70.9% | | 1.6% | -12.1% | -8.6% | -1.4% |
| EBITDA Margin | -59.9% | -192.0% | -94.5% | -49.6% | | -44.5% | -136.7% | -30.9% | 78.3% |
| Net Income Margin | -78.1% | -212.7% | -109.6% | -55.2% | | -49.6% | -138.7% | -26.7% | 92.0% |
Peers in Electronic Manufacturing Services
Below we provide Neonode Inc. benchmarking against other companies in Electronic Manufacturing Services 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 |
|---|
| Netlist Inc ($NLST) | - | 95.0% | -12.5% | -22.1% | 81.0% |
| IEC Electronics Corp. ($IEC) | - | -24.1% | 21.2% | 34.3% | 16.4% |
| eMagin Corporation ($EMAN) | - | 3.0% | 19.1% | 1.9% | 10.1% |
| Jabil Inc. ($JBL) | - | 3.9% | 15.9% | 14.4% | 7.8% |
| Plexus Corp. ($PLXS) | - | -1.1% | 13.7% | 10.1% | 7.1% |
| |
|---|
| Median (13 companies) | 4.6% | 3.0% | 9.8% | 9.7% | -1.3% |
|---|
| Neonode Inc. ($NEON) | - | 0.3% | -16.6% | -22.2% | -10.0% |
Top companies by Gross margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IPG Photonics Corporation ($IPGP) | 54.9% | 56.6% | 54.8% | 46.1% | 44.9% |
| CTS Corporation ($CTS) | 35.4% | 33.2% | 35.1% | 33.6% | 32.8% |
| TE Connectivity Ltd. ($TEL) | 33.7% | 34.3% | 33.9% | 32.7% | 30.7% |
| RF Industries, Ltd. ($RFIL) | 28.0% | 30.4% | 34.1% | 28.3% | 26.9% |
| eMagin Corporation ($EMAN) | 30.1% | 23.3% | 15.2% | 25.2% | 21.6% |
| |
|---|
| Median (13 companies) | 16.7% | 13.8% | 12.1% | 13.8% | 14.3% |
|---|
| Neonode Inc. ($NEON) | 86.9% | 77.1% | 89.2% | 89.7% | 82.0% |
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IPG Photonics Corporation ($IPGP) | 41.8% | 44.7% | 40.9% | 26.8% | 24.0% |
| CTS Corporation ($CTS) | 20.7% | 14.0% | 17.8% | 17.6% | 18.1% |
| TE Connectivity Ltd. ($TEL) | 20.9% | 20.4% | 21.4% | 19.8% | 11.1% |
| TTM Technologies, Inc. ($TTMI) | 14.0% | 14.6% | 13.5% | 15.8% | 9.7% |
| IEC Electronics Corp. ($IEC) | 7.4% | 3.8% | 4.3% | 6.6% | 7.5% |
| |
|---|
| Median (12 companies) | 5.4% | 5.0% | 4.8% | 6.1% | 5.9% |
|---|
| Neonode Inc. ($NEON) | -46.8% | -44.2% | -33.6% | -64.5% | -81.1% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| eMagin Corporation ($EMAN) | 6.7% | 6.2% | 8.8% | 4.2% | 8.5% |
| IPG Photonics Corporation ($IPGP) | 12.6% | 9.0% | 11.0% | 10.2% | 7.3% |
| TTM Technologies, Inc. ($TTMI) | 3.4% | 5.7% | 5.3% | 6.7% | 4.9% |
| TE Connectivity Ltd. ($TEL) | 5.3% | 5.6% | 6.7% | 5.6% | 4.6% |
| Jabil Inc. ($JBL) | 5.0% | 3.8% | 4.7% | 4.0% | 3.6% |
| |
|---|
| Median (12 companies) | 2.8% | 2.7% | 2.4% | 1.6% | 3.5% |
|---|
| Neonode Inc. ($NEON) | 9.7% | 6.4% | 2.8% | 1.3% | 1.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| IEC Electronics Corp. ($IEC) | 16.9% | 3.1% | 6.4% | 12.7% | 14.8% |
| Sanmina Corporation ($SANM) | 14.2% | 13.9% | 7.0% | 16.2% | 13.0% |
| Plexus Corp. ($PLXS) | 8.7% | 10.3% | 9.6% | 12.6% | 12.4% |
| Jabil Inc. ($JBL) | 12.3% | 9.3% | 12.5% | 16.1% | 10.8% |
| CTS Corporation ($CTS) | 18.1% | 9.8% | 14.8% | 11.8% | 9.2% |
| |
|---|
| Median (13 companies) | 6.7% | 5.7% | 6.7% | 11.8% | 7.3% |
|---|
| Neonode Inc. ($NEON) | -137.2% | -71.0% | -35.9% | -67.9% | -63.6% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| SMTC Corporation ($SMTX) | 1.0x | - | 11.3x | 3.8x | 4.2x |
| TE Connectivity Ltd. ($TEL) | 1.4x | 1.3x | 1.1x | 1.1x | 2.7x |
| IEC Electronics Corp. ($IEC) | 2.0x | 5.6x | 4.9x | 3.6x | 2.1x |
| TTM Technologies, Inc. ($TTMI) | 2.2x | 1.5x | 3.2x | 3.3x | 2.0x |
| Jabil Inc. ($JBL) | 1.0x | 0.8x | 1.0x | 0.9x | 1.4x |
| |
|---|
| Median (11 companies) | 0.2x | 0.2x | 0.2x | 0.3x | -0.0x |
|---|
