VirnetX Holding Corp revenue jumped on 355,942% and EBITDA Margin surged on 23,179 pp from -23,127% to 52.2%
03/16/2021 • About VirnetX Holding Corp (
$VHC) • By InTwits
VirnetX Holding Corp reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- VirnetX Holding Corp is a fast growth stock: 2020 revenue growth was 355,942%, 5 year revenue CAGR was 187% at 2020 ROIC 137%
- VirnetX Holding Corp has low CAPEX intensity: 5 year average CAPEX/Revenue was 3.5%. 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, $0m in 2017, $0m in 2016
- The company has highly profitable business model: ROIC is 137.3%
Below you can find a comprehensive analysis of the key data driving the company's performance and the stock price.
Revenue and profitability
The company's Revenue surged on 355,942%. Revenue growth showed slowdown in 20Q4 - it was -54.3% YoY. Revenue growth happened at the same time with EBITDA margin expansion. EBITDA Margin surged on 23,179 pp from -23,127% to 52.2% in 2020.
SG&A as a % of Revenue dropped on 18,697 pp from 18,712% to 15.1% in 2020.
Net Income margin surged on 22,657 pp from -22,565% to 92.7% in 2020.
Return on investment
The company operates at high and attractive ROIC (137.3%) and ROE (243.8%). ROIC jumped on 384 pp from -247% to 137% in 2020. ROE jumped on 491 pp from -247% to 244% in 2020. During 2016-2020 ROIC bottomed in 2018 at -416% and was growing since that time. During the last 5 years ROE bottomed in 2018 at -444% and was growing since that time.
Leverage (Debt)
The company has no debt. Cash surged on 6,053%.
Valuation and dividends
The company's trades at EV/EBITDA 1.5x and P/E 1.5x.
Management team
VirnetX Holding Corp's CEO Kendall S Larsen has spent 13 years with the company. VirnetX Holding Corp's CFO Richard H Nance has spent 8 years with the company.
Financial and operational results
FY ended 12/31/2020
VirnetX Holding Corp ($VHC) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 1.6 | 1.5 | 0.1 | 0.1 | 302.6 | 355,942.4% |
| Gross Profit | 0.7 | | | | | |
| SG&A | 26.7 | 16.2 | 20.7 | 15.9 | 45.8 | 188.0% |
| EBITDA | -28.5 | -17.3 | -25.4 | -19.7 | 157.9 | |
| Net Income | -28.6 | -17.3 | -25.4 | -19.2 | 280.4 | |
Balance Sheet
|
|---|
| Cash | 6.6 | 3.1 | 7.6 | 3.1 | 192.9 | 6,053.4% |
| Short Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
| Long Term Debt | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | |
Cash flow
|
|---|
| Capex | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | -100.0% |
Ratios
|
|---|
| Revenue growth | -0.3% | -0.2% | -95.9% | 34.9% | 355,942.4% | |
| EBITDA growth | -2.3% | -39.3% | 47.1% | -22.7% | -903.2% | |
|
|---|
| Gross Margin | 43.0% | | | | | |
| EBITDA Margin | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% | 23,179.2% |
| SG&A, % of revenue | 1,720.8% | 1,046.8% | 32,865.1% | 18,711.8% | 15.1% | -18,696.6% |
| Net Income Margin | -1,843.2% | -1,116.9% | -40,327.0% | -22,564.7% | 92.7% | 22,657.4% |
| CAPEX, % of revenue | 0.8% | 0.0% | 0.0% | 16.5% | 0.0% | |
|
|---|
| ROIC | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% | 384.4% |
| ROE | -217.7% | -272.1% | -444.1% | -247.2% | 243.8% | 491.0% |
| Net Debt/EBITDA | | | | | -1.2x |
VirnetX Holding Corp ($VHC) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 303 | 0 | 0 | 0 | | 3,782,100.0% | -52.6% | 550.0% | -54.3% |
| EBITDA | 183 | -10 | -5 | -9 | | - | - | - | - |
| Net Income | 300 | -8 | -4 | -7 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 436 | 270 | 226 | 193 | | 8,237.7% | 6,402.6% | 8,683.5% | 6,053.4% |
| Short Term Debt | 0 | 0 | 0 | 0 | | - | - | - | - |
| Long Term Debt | 0 | 0 | 0 | 0 | | - | - | - | - |
Ratios
|
|---|
| EBITDA Margin | 60.5% | -58,250.0% | -20,511.5% | -59,243.8% | | 70,460.5% | -46,276.3% | 103,888.5% | -46,386.6% |
| Net Income Margin | 99.1% | -44,666.7% | -15,480.8% | -46,568.8% | | 70,199.1% | -33,798.2% | 108,419.2% | -33,751.6% |
Peers in Application Software
Below you can find VirnetX Holding Corp 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 |
|---|
| 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% |
| Coupa Software Incorporated ($COUP) | - | 59.9% | 39.6% | 39.4% | 49.7% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.4% | 14.5% |
|---|
| VirnetX Holding Corp ($VHC) | - | -0.2% | -95.9% | 34.9% | 355,942.4% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (90 companies) | 64.2% | 64.4% | 65.7% | 68.2% | 70.0% |
|---|
Top companies by EBITDA margin, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| j2 Global, Inc. ($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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| ANSYS, Inc. ($ANSS) | 45.1% | 41.9% | 41.4% | 39.5% | 36.1% |
| |
|---|
| Median (89 companies) | -4.7% | -3.3% | -3.3% | 4.5% | 6.8% |
|---|
| VirnetX Holding Corp ($VHC) | -1,837.2% | -1,118.0% | -40,379.4% | -23,127.1% | 52.2% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| MicroStrategy Incorporated ($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% | 2.9% | 2.6% |
|---|
| VirnetX Holding Corp ($VHC) | 0.8% | 0.0% | 0.0% | 16.5% | 0.0% |
Top companies by ROIC, %
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Manhattan Associates, Inc. ($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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| Adobe Inc. ($ADBE) | 15.9% | 21.3% | 23.3% | 22.9% | 26.9% |
| |
|---|
| Median (92 companies) | -9.2% | -10.2% | -9.8% | -4.2% | -2.2% |
|---|
| VirnetX Holding Corp ($VHC) | -210.9% | -256.8% | -416.3% | -247.2% | 137.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2016 | FY2017 | FY2018 | FY2019 | FY2020 |
|---|
| Dropbox, Inc. ($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 |
|---|
| VirnetX Holding Corp ($VHC) | - | - | - | - | -1.2x |
