Task 1 BigTech Template
Task 1 BigTech Template
Task 1 BigTech Template
Financial Overview
BigTechCompany
QUARTERLY PERFORMANCE
BigTechCompany Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
($ in thousands) 2021 2021 2021 2021 2022 2022 2022 2022 2022
Revenues $5,01,430 $5,13,924 $5,23,843 $5,39,652 $5,50,744 $5,57,910 $5,54,791 $5,49,644 $5,71,305
Quarterly Growth 2% 2% 3% 2% 1% -1% -1% 4%
Operating Income (EBITDA) $1,37,190 $1,29,334 $1,22,868 $44,224 $1,38,014 $1,10,480 $1,07,311 $38,493 $1,20,002
Quarterly Growth -6% -5% -64% 212% -20% -3% -64% 212%
Net Income $1,19,470 $94,711 $1,01,435 $42,520 $1,11,821 $1,00,867 $97,877 $3,870 $1,02,019
Quarterly Growth -21% 7% -58% 163% -10% -3% -96% 2536%
Net Income per Share $3.85 $3.05 $3.27 $1.37 $3.60 $3.24 $3.14 $0.12 $3.27
Free Cash Flow (FCF) $48,416 -$12,253 -$7,438 -$39,848 $56,118 $891 $33,030 $23,259 $56,812
Financial Metrics Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023
EBITDA Margin 27% 25% 23% 8% 25% 20% 19% 7% 21%
Net Income Margin 24% 18% 19% 8% 20% 18% 18% 1% 18%
FCF per Diluted Share $1.52 -$0.38 -$0.23 -$1.25 $1.77 $0.03 $1.05 $0.74 $1.79
BigTechCompany
CUSTOMER TRENDS
Key Takeaways:
▪ Company increased its subscription cost in Q1 2022
▪ More people stopped using the service, but at the same time, more new people started using it too.
▪ the company experienced an atypically high churn rate in Q2 2022
Customer Trends Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
#s in thousands 2021 2021 2021 2021 2022 2022 2022 2022 2023
Cost of Subscription (Quarterly) $33 $33 $33 $33 $34 $34 $34 $34 $34
Number of Users (Beginning of Period) 15,195 15,573 15,874 16,353 16,198 16,409 16,317 16,166 16,803
Customer Attrition 89 200 204 444 2,446 5,000 1,655 1,244 322
New Users 468 501 683 289 2,657 4,908 1,504 1,881 1,965
Number of Users (End of Period) 15,573 15,874 16,353 16,198 16,409 16,317 16,166 16,803 18,446
Change in # of Users 2% 3% -1% 1% -1% -1% 4% 10%
Net Change in Customers 379 301 479 (155) 211 (92) (151) 637 1,643
Churn Rate 0.6% 1.3% 1.3% 2.7% 15.1% 30.5% 10.1% 7.7% 1.9%
BigTechCompany
PROJECTIONS
FY FY FY FY FY 2020-2024E
Financial Highlights 2020 2021 2022 2023E 2024E CAGR
Revenues $19,99,444 $20,78,849 $22,13,089 $22,85,221 $26,28,004 7%
Annual Growth 4% 6%
Operating Income (EBITDA) $3,71,461 $4,33,616 $3,94,298 $4,80,009 $9,60,018 27%
Annual Growth 17% -9%
Net Income $2,47,641 $3,58,136 $3,14,435 $4,08,075 $4,40,721 16%
Annual Growth 45% -12%
Net Income per Share $12.11 $11.55 $10.11 $13.09 $52.37 44%
Free Cash Flow (FCF) $755 -$11,123 $1,13,297 $2,27,248 $2,22,703 314%
Financial Metrics
EBITDA Margin 19% 21% 18% 21% 37%
Net Income Margin 12% 17% 14% 18% 17%
Debt / EBITDA 2.7x 2.4x 2.6x 2.1x 1.0x
FCF per Diluted Share $0.03 -$0.35 $3.57 $7.18 $7.03
BigTechCompany
CONCLUSIONS
Company Highlights
▪ BigTechCompany has seen steady revenue growth over the past two years and is expected to continue growing in the
future
▪ The company is cash flow positive and will continue to be in the future.
▪ …The company’s debt/EBITDA is currently 2.4x and is expected to continue to decrease. This is low compared to the
industry average of 4.0x, suggesting the company has a healthy leverage ratio.
▪ Areas of Concern
▪ ▪ The company has volatile quarterly expenses, particularly in the 4th quarter of each year.
▪ ▪ The company’s EBITDA margin is low compared to the industry average of 39%
Recommendation
▪ ▪ We should develop a relationship with BigTechCompany, as they are continuing to grow and could be a valuable client in
the future.
▪ ▪ We should ask the company to clarify why expenses are higher in some quarters vs. others.
▪ ▪ We should ask about the company’s plans to increase prices in the future, as this may lead to customer attrition.