SharpSpring, Inc. revenue growth accelerated from 21.7% in FY2019 to 29.0% in FY2020
03/16/2021 • About SharpSpring, Inc. (
$SHSP) • By InTwits
SharpSpring, Inc. reported FY2020 financial results today. Here are the key drivers of the company's long term financial model:
- SharpSpring, Inc. is a fast growth stock: FY2020 revenue growth was 29.0%, 5 year revenue CAGR was 26.1% at FY2020 ROIC -16.7%
- The company operates at negative EBITDA Margin: -19.5%
- SharpSpring, Inc. motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for FY2016-FY2020 was 0.0% while average EBITDA Margin was -37.3% for the sames years
- SharpSpring, Inc. has low CAPEX intensity: 5 year average CAPEX/Revenue was 4.0%. At the same time it's a lot of higher than industry average of 3.0%.
- CAPEX is quite volatile: $1m in FY2020, $1m in FY2019, $1m in FY2018, $0m in FY2017, $0m in FY2016
- The company has unprofitable business model: ROIC is -16.7%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
SharpSpring, Inc.'s Revenue surged on 29.0%. Revenue growth showed slowdown in FY20Q4 - it was 24.9% YoY. Despite revenue decline the EBITDA margin expanded. EBITDA Margin increased on 7.3 pp from 0.38% to 7.6% in FY2020. EBITDA Margin grew at 7.9 pp per annum in the last 5 years.
Gross Margin increased on 3.9 pp from 68.5% to 72.5% in FY2020. Gross Margin stuck to a growing trend at 2.8 pp per annum in the last 5 years. SG&A as a % of Revenue dropped on 17.8 pp from 89.9% to 72.1% in FY2020.
Net Income margin jumped on 34.7 pp from -54.6% to -19.9% in FY2020. During FY2016-FY2020 Net Income margin bottomed in FY2019 at -54.6%.
Investments (CAPEX, working capital and M&A)
In FY2020 the company had CAPEX/Revenue of 3.9%. SharpSpring, Inc.'s CAPEX/Revenue increased on 2.6 pp from 1.3% in FY2017 to 3.9% in FY2020. Average CAPEX/Revenue for the last three years was 4.9%.
Return on investment
The company operates at negative ROIC (-16.7%) and ROE (-17.0%). ROIC jumped on 20.3 pp from -37.0% to -16.7% in FY2020. ROE jumped on 42.5 pp from -59.6% to -17.0% in FY2020. During FY2016-FY2020 ROE bottomed in FY2019 at -59.6%.
Leverage (Debt)
Debt level is -2.4x Net Debt / EBITDA and Debt / EBITDA. Debt surged on 158% while cash jumped on 138%.
SharpSpring, Inc. has no short term refinancing risk: cash is higher than short term debt (537.9%).
Financial and operational results
SharpSpring, Inc. ($SHSP) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 11.542 | 13.449 | 18.652 | 22.699 | 29.288 | 29.0% |
| Gross Profit | 7.079 | 8.452 | 12.853 | 15.557 | 21.225 | 36.4% |
| SG&A | 9.759 | 12.024 | 16.451 | 20.402 | 21.116 | 3.5% |
| EBITDA | -6.508 | -6.176 | -7.972 | -9.253 | -5.719 | |
| Net Income | 4.951 | -4.670 | -9.479 | -12.388 | -5.829 | |
Balance Sheet
|
|---|
| Cash | 8.651 | 5.400 | 9.321 | 11.882 | 28.268 | 137.9% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.370 | 5.256 | 1,319.1% |
| Long Term Debt | 0.000 | 0.000 | 8.342 | 4.977 | 8.540 | 71.6% |
Cash flow
|
|---|
| Capex | 0.456 | 0.177 | 0.894 | 1.365 | 1.146 | -16.0% |
Ratios
|
|---|
| Revenue growth | 25.7% | 16.5% | 38.7% | 21.7% | 29.0% | |
| EBITDA growth | -19.1% | -5.1% | 29.1% | 16.1% | -38.2% | |
|
|---|
| Gross Margin | 61.3% | 62.8% | 68.9% | 68.5% | 72.5% | 3.9% |
| EBITDA Margin | -56.4% | -45.9% | -42.7% | -40.8% | -19.5% | 21.2% |
| SG&A, % of revenue | 84.6% | 89.4% | 88.2% | 89.9% | 72.1% | -17.8% |
| Net Income Margin | 42.9% | -34.7% | -50.8% | -54.6% | -19.9% | 34.7% |
| CAPEX, % of revenue | 3.9% | 1.3% | 4.8% | 6.0% | 3.9% | -2.1% |
|
|---|
| ROIC | -42.8% | -31.1% | -42.1% | -37.0% | -16.7% | 20.3% |
| ROE | 27.3% | -21.8% | -57.9% | -59.6% | -17.0% | 42.5% |
SharpSpring, Inc. ($SHSP) key quoterly financial indicators
| mln. $ | FY20Q1 | FY20Q2 | FY20Q3 | FY20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 7 | 7 | 7 | 8 | | 32.4% | 31.8% | 27.7% | 24.9% |
| EBITDA | -2 | -0 | -1 | -2 | | - | - | - | - |
| Net Income | -1 | -1 | -2 | -2 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 12 | 15 | 15 | 28 | | -34.5% | -4.4% | 9.2% | 137.9% |
| Short Term Debt | 2 | 4 | 5 | 5 | | 562.2% | 1,045.0% | 1,189.9% | 1,319.1% |
| Long Term Debt | 5 | 10 | 9 | 9 | | -61.0% | 94.5% | 83.2% | 71.6% |
Ratios
|
|---|
| Gross Margin | 66.4% | 74.2% | 74.4% | 74.5% | | -4.5% | 3.7% | 6.6% | 9.2% |
| EBITDA Margin | -30.3% | -6.8% | -15.3% | -25.7% | | 18.2% | 29.1% | 24.1% | 14.0% |
| Net Income Margin | -14.0% | -13.3% | -21.1% | -30.4% | | 40.3% | 63.5% | 23.0% | 14.1% |
Peers in Application Software
Below you can find SharpSpring, 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 14.8% | 15.1% | 19.4% | 14.5% |
|---|
| SharpSpring, Inc. ($SHSP) | - | 16.5% | 38.7% | 21.7% | 29.0% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 65.3% | 67.9% | 69.4% |
|---|
| SharpSpring, Inc. ($SHSP) | 61.3% | 62.8% | 68.9% | 68.5% | 72.5% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 7.7% |
|---|
| SharpSpring, Inc. ($SHSP) | -56.4% | -45.9% | -42.7% | -40.8% | -19.5% |
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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 2.9% | 2.3% | 2.4% | 2.9% | 2.5% |
|---|
| SharpSpring, Inc. ($SHSP) | 3.9% | 1.3% | 4.8% | 6.0% | 3.9% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| SharpSpring, Inc. ($SHSP) | -42.8% | -31.1% | -42.1% | -37.0% | -16.7% |
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 (54 companies) | -0.9x | -0.8x | -0.7x | 0.4x | 0.2x |
|---|
