3 ms·
why is it down for FY2015 net income? And Aren't those margins kinda thin?
by guiomie 11y ago
why is it down for FY2015 net income? And Aren't those margins kinda thin?
- nemo44x 11y agoNot at all. They are investing their profits into scaling and growing the business.
- mbesto 11y agoThis. And no, software margins are not categorically thin (see SAP, Oracle, Microsoft, etc).
- colinbartlett 11y agoI don't believe those margins are thin by public company standards. Perhaps we are spoiled by Apple who operates at insane margins?
- Nicholas_C 11y agoHuge increases in R&D and marketing expenses, mostly.
- andrewcamel 11y agoDoesn't the R&D ramp look a bit unusual? 57 -> 79 -> 141? Totally destroys their margins, right in the year when they must know they're going public?
- Nicholas_C 11y agoAs a percent of revenue the R&D increase doesn't look as crazy. R&D as % of Revenue by year: 2013 39% 2014 37% 2015 44% The marketing and sales expense goes from 13% to 21% of revenue in 2015 The growth in these line items really compress their margins in 2015.
- nkohari 11y agoThey've been reinvesting potential profit into the company in order to grow R&D. (Spend has increased from $57M in FY13 to $141M in FY15.) Their gross margins are probably what you want to look at instead, since their cost of revenue won't include R&D ($ in 1,000s): FY13 FY14 FY15 Gross revenue 148,512 215,109 319,521 Gross profit 115,481 117,123 266,589 Gross margin 77.7% 54.4% 83.4% These are very healthy for a software company. They nearly doubled their spend on sales and marketing between FY13 and FY14, which explains the temporary dip in gross margin in FY14.