BSQUARE Corporation reports 20.5% revenue decline in 2020 and 11.3 pp EBITDA Margin growth from -12.5% to -1.2%
03/18/2021 • About BSQUARE Corporation (
$BSQR) • By InTwits
BSQUARE Corporation reported 2020 financial results today. Overall the company's long term financial model is characterised by the following facts:
- BSQUARE Corporation is a company in decline: 2020 revenue growth was -20.5%, 5 years revenue CAGR was -15.1%
- The company operates at negative EBITDA Margin: -1.2%
- BSQUARE Corporation motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2016-2020 was 0.0% while average EBITDA Margin was -8.6% for the sames years
- BSQUARE Corporation has low CAPEX intensity: 5 year average CAPEX/Revenue was 0.6%.
- The company has unprofitable business model: ROIC is -14.1%
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 dropped on 20.5%. Revenue decline showed acceleration in 20Q4 - it was 28.0% YoY. Having declining revenue the company managed to increase EBITDA margin. EBITDA Margin surged on 11.3 pp from -12.5% to -1.2% in 2020. During 2016-2020 EBITDA Margin bottomed in 2018 at -18.1% and was growing since that time.
Gross Margin decreased slightly on 0.64 pp from 17.0% to 16.4% in 2020. During the last 5 years Gross Margin topped in 2017 at 22.4% and was declining since that time. SG&A as a % of Revenue increased slightly on 0.67 pp from 19.1% to 19.8% in 2020.
Net Income margin jumped on 11.5 pp from -15.5% to -4.0% in 2020. During 2016-2020 Net Income margin bottomed in 2018 at -18.7% and was growing since that time.
Investments (CAPEX, working capital and M&A)
In 2020 the company had CAPEX/Revenue of 0.58%. BSQUARE Corporation's CAPEX/Revenue showed almost no change from 2017 to 2020. For the last three years the average CAPEX/Revenue was 0.64%. During the last 5 years CAPEX as a % of Revenue topped in 2019 at 0.71%.
Return on investment
The company operates at negative ROIC (-14.1%) and ROE (-20.6%). ROIC surged on 46.8 pp from -60.9% to -14.1% in 2020. ROE jumped on 44.9 pp from -65.5% to -20.6% in 2020. During the last 5 years ROIC bottomed in 2019 at -60.9%. During the last 5 years ROE bottomed in 2019 at -65.5%.
Leverage (Debt)
Debt level is -0.9x Net Debt / EBITDA and Debt / EBITDA. Debt jumped on 81.7% while cash jumped on 63.7%.
BSQUARE Corporation has no short term refinancing risk: cash is higher than short term debt (975.5%).
Management team
BSQUARE Corporation's CEO Ralph C Derrickson has spent 2 years with the company. Chris Wheaton is a BSQUARE Corporation's CFO. Chris Wheaton has spent 1 year at the company.
Financial and operational results
FY ended 12/31/2020
BSQUARE Corporation ($BSQR) key annual financial indicators| mln. $ | 2016 | 2017 | 2018 | 2019 | 2020 | 2020/2019 |
|---|
P&L
|
|---|
| Revenue | 97.441 | 80.811 | 73.414 | 59.283 | 47.144 | -20.5% |
| Gross Profit | 15.820 | 18.122 | 15.510 | 10.096 | 7.726 | -23.5% |
| SG&A | 14.119 | 20.982 | 17.074 | 11.316 | 9.314 | -17.7% |
| EBITDA | -0.560 | -8.787 | -13.292 | -7.425 | -0.560 | |
| Net Income | -1.052 | -9.058 | -13.737 | -9.181 | -1.889 | |
Balance Sheet
|
|---|
| Cash | 14.312 | 12.859 | 10.005 | 7.712 | 12.623 | 63.7% |
| Short Term Debt | 0.000 | 0.000 | 0.000 | 0.702 | 1.294 | 84.3% |
| Long Term Debt | 0.000 | 0.000 | 0.000 | 1.256 | 2.264 | 80.3% |
Cash flow
|
|---|
| Capex | 0.390 | 0.439 | 0.463 | 0.418 | 0.274 | -34.4% |
Ratios
|
|---|
| Revenue growth | -8.6% | -17.1% | -9.2% | -19.2% | -20.5% | |
| EBITDA growth | -108.0% | 1,469.1% | 51.3% | -44.1% | -92.5% | |
|
|---|
| Gross Margin | 16.2% | 22.4% | 21.1% | 17.0% | 16.4% | -0.6% |
| EBITDA Margin | -0.6% | -10.9% | -18.1% | -12.5% | -1.2% | 11.3% |
| SG&A, % of revenue | 14.5% | 26.0% | 23.3% | 19.1% | 19.8% | 0.7% |
| Net Income Margin | -1.1% | -11.2% | -18.7% | -15.5% | -4.0% | 11.5% |
| CAPEX, % of revenue | 0.4% | 0.5% | 0.6% | 0.7% | 0.6% | -0.1% |
|
|---|
| ROIC | -3.1% | -27.0% | -55.9% | -60.9% | -14.1% | 46.8% |
| ROE | -2.8% | -26.1% | -55.2% | -65.5% | -20.6% | 44.9% |
BSQUARE Corporation ($BSQR) key quoterly financial indicators
| mln. $ | 20Q1 | 20Q2 | 20Q3 | 20Q4 | | YoY change |
|---|
P&L
|
|---|
| Revenue | 17 | 9 | 10 | 11 | | 10.8% | -37.1% | -28.8% | -28.0% |
| EBITDA | 0 | -1 | 0 | 0 | | - | - | - | - |
| Net Income | -0 | -1 | -0 | -0 | | - | - | - | - |
Balance Sheet
|
|---|
| Cash | 10 | 12 | 12 | 13 | | 34.1% | 89.2% | 80.5% | 63.7% |
| Short Term Debt | 0 | 1 | 1 | 1 | | -62.8% | -7.8% | 53.2% | 84.3% |
| Long Term Debt | 1 | 2 | 2 | 2 | | 212.3% | 1,192.3% | 1,663.6% | 80.3% |
Ratios
|
|---|
| Gross Margin | 15.5% | 11.7% | 18.1% | 19.9% | | -0.4% | -5.4% | 0.2% | 2.7% |
| EBITDA Margin | 0.1% | -7.9% | 1.0% | 0.1% | | 15.6% | 13.4% | 2.0% | 6.3% |
| Net Income Margin | -2.8% | -12.0% | -1.3% | -1.9% | | 16.0% | 15.3% | 6.3% | 7.0% |
Peers in Application Software
Below we provide BSQUARE Corporation benchmarking against other companies in Application Software 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 |
|---|
| 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. ($SMAR) | - | 64.3% | 66.1% | 59.7% | 52.4% |
| |
|---|
| Median (92 companies) | 12.0% | 15.7% | 15.2% | 19.5% | 14.7% |
|---|
| BSQUARE Corporation ($BSQR) | - | -17.1% | -9.2% | -19.2% | -20.5% |
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. ($CDNS) | 85.9% | 87.8% | 87.9% | 88.6% | 88.6% |
| |
|---|
| Median (89 companies) | 64.2% | 64.6% | 66.0% | 68.4% | 70.6% |
|---|
| BSQUARE Corporation ($BSQR) | 16.2% | 22.4% | 21.1% | 17.0% | 16.4% |
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. ($SSNC) | 34.9% | 37.9% | 27.7% | 38.2% | 38.3% |
| |
|---|
| Median (89 companies) | -5.3% | -3.3% | -3.3% | 4.5% | 7.7% |
|---|
| BSQUARE Corporation ($BSQR) | -0.6% | -10.9% | -18.1% | -12.5% | -1.2% |
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. ($PRO) | 4.7% | 0.8% | 0.7% | 2.1% | 11.3% |
| |
|---|
| Median (87 companies) | 3.0% | 2.3% | 2.4% | 3.0% | 2.6% |
|---|
| BSQUARE Corporation ($BSQR) | 0.4% | 0.5% | 0.6% | 0.7% | 0.6% |
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. ($PAYC) | 75.4% | 51.1% | 47.5% | 47.5% | 28.7% |
| |
|---|
| Median (92 companies) | -9.8% | -10.2% | -9.8% | -4.2% | -1.8% |
|---|
| BSQUARE Corporation ($BSQR) | -3.1% | -27.0% | -55.9% | -60.9% | -14.1% |
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 |
|---|
