Inpixon :INPX-US: Earnings Analysis: Q2, 2017 By the Numbers : October 4, 2017

Inpixon reports financial results for the quarter ended June 30, 2017.

We analyze the earnings along side the following peers of Inpixon – HP Inc. (HPQ-US) that have also reported for this period.


  • Summary numbers: Revenues of USD 15.10 million, Net Earnings of USD -6.42 million.
  • Gross margins narrowed from 17.90% to 13.26% compared to the same period last year, operating (EBITDA) margins now -22.61% from -19.46%.
  • Year-on-year change in operating cash flow of 42.98% is about the same as the change in earnings, likely no significant movement in accruals or reserves.
  • Narrowing of operating margins contributed to decline in earnings.

The table below shows the preliminary results and recent trends for key metrics such as revenues and net income growth:

2017-06-30 2017-03-31 2016-12-31 2016-09-30 2016-06-30
Relevant Numbers (Quarterly)
Revenues (mil) 15.1 13.48 14.51 11.24 13.33
Revenue Growth (%YOY) 13.23 -4.3 -28.4 -24.43 -24.67
Earnings (mil) -6.42 -6.04 -13.17 -4.72 -4.17
Earnings Growth (%YOY) -53.87 -40.47 -232.92 -48.86 -145.79
Net Margin (%) -42.51 -44.83 -90.76 -41.96 -31.29
EPS -2.71 -2.48 -6.46 -2.7 -2.55
Return on Equity (%) N/A -5254.78 -148.01 -31.15 -24.37
Return on Assets (%) -49.24 -39.94 -85.3 -31.34 -25.97

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Market Share Versus Profits

Revenues History
Earnings History

INPX-US’s change in revenue this period compared to the same period last year of 13.23% is almost the same as its change in earnings, and is about average among the announced results thus far in its peer group, suggesting that INPX-US is holding onto its market share. Also, for comparison purposes, revenues changed by 11.98% and earnings by -6.21% compared to the immediate last period.

Revenues Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Leader, Earnings Focus, Laggard, Revenues Focus

Earnings Growth Analysis

The company’s year-on-year decline in earnings was influenced by a weakening in gross margins from 17.90% to 13.26%, as well as issues with cost controls. As a result, operating margins (EBITDA margins) went from -19.46% to -22.61% in this time frame. For comparison, gross margins were 14.13% and EBITDA margins were -26.46% in the previous period.

Gross Margin Versus EBITDA Margin

Quadrant label definitions. Hover to know more

Differentiated; Low Cost, Commodity; Low Cost, Commodity; High Cost, Differentiated; High Cost

Gross Margin Trend

Companies sometimes sacrifice improvements in revenues and margins in order to extend friendlier terms to customers and vendors. Capital Cube probes for such activity by comparing the changes in gross margins with any changes in working capital. If the gross margins improved without a worsening of working capital, it is possible that the company’s performance is a result of truly delivering in the marketplace and not simply an accounting prop-up using the balance sheet.

Gross Margin History
Working Capital Days History

INPX-US’s decline in gross margins were offset by some improvements on the balance sheet. The management of working capital, for example, shows progress. The company’s working capital days are now -168.70 days from -63.67 days for the same period last year. This leads Capital Cube to conclude that the gross margin decline is not altogether bad.

Gross Margin Versus Working Capital Days

Quadrant label definitions. Hover to know more

Customer Financed, Cash Starved, Supplier Financed, Cash Rich

Cash Versus Earnings – Sustainable Performance?

It is important to examine a company�s cash versus earnings numbers to gauge whether its performance is sustainable.

INPX-US’s change in operating cash flow of 42.98% compared to the same period last year is about the same as its change in earnings this period. Additionally, this change in operating cash flow is about average among its peer group. This suggests that the company did not use accruals or reserves to manage earnings this period, and that, all else being equal, the earnings number is sustainable.

Operating Cash Flow Growth Versus Earnings Growth

Quadrant label definitions. Hover to know more

Cash Flow based Earnings, Likely Non-cash Earnings, Low Cash Flow Base, Likely Undeclared Earnings


The company’s decline in earnings has been influenced by the following factors: (1) Decline in operating margins (EBIT margins) from -29.54% to -34.63% and (2) one-time items that contributed to a decrease in pretax margins from -31.32% to -42.54%

EBIT Margin Versus PreTax Margin

Quadrant label definitions. Hover to know more

Operation driven Earnings, One-time Favorables, Low Earnings Base, One-time Unfavorables
EBIT Margin History
PreTax Margin History

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Company Profile

Inpixon provides a variety of information technology (IT) services and technologies that enable its customers to manage, protect and monetize their enterprise assets whether on-premise, in the cloud, or via mobile. It operates through the following segments: Mobile, IoT and Big Data Products; Storage and Computing; Software-as-a-Services (SaaS) Revenues; and Professional Services. The Mobile, IoT and Big Data Products segment includes AirPatrol product line (location-based security and marketing platform for wireless and cellular devices that can detect, monitor and manage the content and behavior of smartphones, tablets and other mobile devices based on their location and user); on-premise big data appliance product and will include future Inpixon owned products. The Storage and Computing segment handles third party hardware, software and related maintenance/warranty products and services that Inpixon resells. The SaaS Revenues segment manages SaaS or internet based hosted services including the Shoom product line and cloud based big data analytics services (based on LMS product) and other data science services; analytics services for AirPatrol products and other managed services on a SaaS basis. The Professional Services segment offers general IT services including but not limited to: custom application/software design; architecture and development; project management; C4I system consulting; strategic outsourcing; staff augmentation; data center design and operations services; data migration services and other non-SaaS services. The company was founded by Abdus Salam Qureishi in 1972 and is headquartered in Palo Alto, CA.

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