Bankers
Gregory Kouvelas
Senior Managing Director, Technology Investment Banking
Mr. Gregory Kouvelas joined National Securities Corporation as a Senior Managing Director of Technology Investment Banking. Previously, Mr. Kouvelas served as a Senior Banker at Wunderlich Securities, Seven Hills Partners, ING and Robertson Stephens. In addition, Mr. Kouvelas also has experience as a consultant at Andersen Consulting (Accenture) Strategic Services Group and an executive at a Silicon Valley software startup. Mr. Kouvelas earned an MBA in Finance from the University of Chicago Booth School of Business and an AB from Harvard University.
Technology Sector Expertise
National has built a robust banking practice across the massive technology industry, including in exponentially growing sectors like software, internet apps, social media, hardware, data mining platforms and fin tech, as well as large crossover segments like 3D printing, self-driving cars and the Internet of Things (IoT). Our banking team’s capabilities center on capital raising activities, primarily through private placements for early stage companies, as well as investment funds and SPVs dedicated to well-known tech “unicorns,” both in primary and secondary markets.
While we sometimes displace traditional VC investors, we also co-invest alongside them to support the development, market penetration and adoption of promising technologies.
Completed Transactions
Analysts
Ilya Grozovsky
Managing Director, Equity Research
Ilya Grozovsky is the Managing Director covering the Technology sector. Ilya’s focus on technology includes software, cloud computing infrastructure and applications. Ilya is a seasoned analyst with over 15 years of experience on both the sell-side and the buy-side, working for firms such as ING, JP Morgan, SoundView Technology Group, MAC Investment Management, and Morgan Joseph & Co. He holds the FINRA Series 7, 63, 86, and 87 licenses and received his Bachelor of Arts in Economics from the University of Maryland.
Matthew Galinko
Senior Equity Research Analyst
Matthew Galinko joined National Securities in June 2018 as a Senior Equity Research Analyst covering Technology and focused on the Internet of Things. Matt has covered the technology sector since 2007, including small cap at Sidoti & Company and multi-cap at Battle Road Research. Matt earned a B.A. in Economics, minor in Business, and led the investment club at Brandeis University.
Technology Sector Coverage
Technology research coverage at National focuses on sub-sectors such as software as a service (SaaS), the Internet of Things (IoT), and other unique opportunities in tech. The technology analyst team looks for companies with unique products, a growing market opportunity, expanding market share and recurring revenues. All types of valuation methodologies are used, with a consistent eye toward profitability.
AudioEye, Inc. (AEYE: Buy, $6.62 PT)
November 29, 2018– Solving The Web Accessibility Issue; Initiate Coverage With BUY Rating & $9 PT
AudioEye’s managed service replaces a labor heavy alternative, saving customers time and money. AudioEye’s software driven service resolves an estimated 60% of content accessibility violations without manual intervention and targets 100 days or less to make a website fully Web Content Accessibility Guideline (WCAG) compliant. For 2019, we anticipate revenue of $10 million, a year over year growth of 75%, and a gross margin of 54% compared with 51% the previous year.
Aqua Metals, Inc. (AQMS: Buy, $10 PT)
November 8, 2018– The company continues to refine the four modules that are in service in order to get the process to a positive margin contribution. We believe that the improvements to the process are not a matter of inventing new science but rather all process improvements in the material recapture (the main goal is to adequately recapture the process components). As a result, we believe that these are achievable goals that management has laid out. Their timeframe for this is year-end 2018 and we think is reasonable to expect these goals be met by then.
Digimarc Corp. (DMRC: Buy, $43 PT)
November 1, 2018– Yesterday, after the close of trading, Digimarc Corp. reported its September quarter results. Revenues in the quarter were $4.9 million essentially in-line with our estimate and compared to $5.4 million in the previous quarter and $5.1 million in the year ago quarter (when excluding a one-time license payment).
Digital Turbine, Inc.. (APPS: Buy, $3.50 PT)
November 6, 2018– Yesterday, after the close of trading, Digital Turbine reported its September quarter results. Revenues in the quarter were $24 million compared to our estimate of $23 million and compared to $22 million in the previous quarter and $16 million in the year ago quarter. Importantly, after several quarters of sequential gross margin declines, this quarter saw non-GAAP gross margins improve 2.4% sequentially to 34.6%. The company reported adjusted EBITDA of $1.6 million compared to our estimate of $0.4 million and better than the $0.2 million in the previous quarter and $0.5 million in the year ago quarter.
Energous Corp. (WATT: Buy, $35 PT)
October 31, 2018–Yesterday, after the close of trading, Energous Corp. reported its September quarter results. The company generated $0.2 million in revenues in the quarter in the form of milestone payments and chip royalties, in line with our estimate and unchanged from the previous quarter. Adjusted EBITDA in the quarter was a loss of $9 million which was greater than our estimate of a loss of $8 million and up from the previous quarters loss of$8 million and up from the loss of $8 million in the year ago quarter.
I.D. Systems, Inc. (IDSY: Buy, $8.60 PT)
November 9, 2018–IDSY reported 3Q:18 Non-GAAP EPS of $0.01 and revenue of $13.4 million, which compared to our estimates for breakeven on $12.3 million. We were in-line with consensus.
InterDigital, Inc. (IDCC: Buy, $103 PT)
November 2, 2018– IDCC reported 3Q:18 Non-GAAP EPS of $0.40 on revenue of $75.1 million, beating our estimate for $0.20 on $65.0 million although note that our estimates did not include expected contribution from Technicolor, which IDCC owned for two months of 3Q:18.
Kopin Corporation (KOPN: Buy, $2.40 PT)
November 8, 2018– KOPN’s 3Q:18 revenue was lower than we expected by about $2 million, attributed in part to tariffs and market conditions muting demand. Full year revenue guidance was reduced by$5.5-$8.5 million prompting us to bring our estimate down to $25.3 million from $31 million.
Mitek Systems, Inc. (MITK: Buy, $17.50 PT)
November 2, 2018–Yesterday, after the close of trading, Mitek Systems reported its September quarter results. Revenues in the quarter were $21.0 million compared to our estimate of $19.5 million and compared to $16.1 million in the previous quarter and $13 million in the year ago quarter. Revenues in the quarter were driven by strong sales of the Mobile ID product line which grew 79% year over year in the quarter and accounted for 28% of the revenues.
Nano Dimension Ltd. (NNDM: Buy, $7 PT)
November 19, 2018–On November 15th, Nano Dimension finalized its September quarter results (the company pre-announced the results on October 15th). Revenues in the quarter were $1.6 million, slightly higher than our original expectation of $1.5 million, and up from $1.1 million in the previous quarter. September quarter revenues were comprised of sales of 10 printers, all through resellers, up from 7 in the previous quarter. Nano Dimension also recognized initial printer ink revenues in the quarter.
OneSpan (OSPN: Buy, $20 PT)
January 3, 2019– OSPN reached the inflection point in 2018 converting from a hardware to a software security company. The revenue mix has shifted from hardware authenticators to software security and eSignature products; we expect the mix surpassed 50% software in 2018 for the first time and will reach 64% in 2020. The hardware business, in a secular decline, will be less influential in OSPN’s revenue growth rate as it fades in the mix, which we think will support multiple expansion. A scaled up software business should drive also higher margins over time.
Progress Software Corp. (PRGS: Buy, $50 PT)
September 28, 2018– We maintain a BUY rating and $50 price target, based on 17.5x (previously 17x) our new 2020 non-GAAP EPS estimate of $2.85 (previously $2.93). The higher multiple reflects increasing ratable revenue. With shares indicating a steep decline, we think this offers a good opportunity to accumulate shares.
Ribbon Communications (RBBN: Buy, $10 PT)
October 31, 2018– RBBN beat our estimates and raised full year guidance. Non-GAAP revenue of $158.7 million, adjusted EBITDA of $29 million, and Non-GAAP net income of $21.9 million compared our estimates for $138.1 million, $24.9 million, and $21.9 million respectively. Non-GAAP 2018 revenue guidance was lifted to $610 million from $580 million on a $20 million contribution from the acquired Edgewater Networks business and the rest strength in the core business. We lifted our 2019 revenue estimate by about $10 million and our EBITDA estimate by about $1 million.
Resonant, Inc. (RESN: Buy, $8 PT)
November 14, 2018– Yesterday, after the close of trading, Resonant reported September quarter results. Revenues in the quarter were $0.1 million compared to our estimate of $0.3 million and compared to $0.1 million in the previous and year ago quarters. Six devices contributed to revenues in the quarter from 3 different customers. Adjusted EBITDA of a loss of $5 million was greater than our estimate of a loss of $4 million and compared to a loss of $4 million in the previous quarter and a loss of $3 million in the year ago quarter.
Xperi Corporation (XPER: Buy, $31 PT)
November 8, 2018– XPER reported 3Q:18 billings of $100.6 million and billings-based Non-GAAP EPS of $0.63, compared to our estimates for $97.9 million and $0.46, respectively. Guidance was for $97-$102 million of billings.
