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The Elmo Software Ltd. (ASX:ELO) The stock price rose after reporting its annual results and providing its outlook.
ASX tech stock jumped 5.6% to a high of $3 in early trading on Wednesday and has since retreated to now trade at $2.95, up 3.8%.
What did the company report?
What else happened in FY22?
Besides the launch of new modules for its software suite, the major corporate event for the human resources software publisher was speculation on its acquisition.
In June, Elmo Software confirmed that it had “conducted exploratory discussions” on a non-binding takeover proposal at a price of $6.10 per share.
These negotiations were concluded without result, according to the board of directors of Elmo.
What did management say?
Elmo Software General Manager Danny Lessem said:
I am extremely satisfied with the results of the ELMO EX22. Our group’s organic growth has accelerated as small and medium-sized businesses continue to adopt cloud-based solutions to manage an increasingly flexible or hybrid workforce.
We saw an improvement in our operating metrics in the mid-market and small business segments. Reduced churn and improved GP margin resulted in a substantial increase in our customer lifetime value to $1.1 billion. This is a 75% increase from FY21.
Unlike many ASX companies this reporting season, Elmo Software provided some guidance for fiscal year 2023:
- Annualized recurring revenue growth of 24% to 29% ($134 million to $140 million)
- Revenue is expected to increase 25% to 31% ($114 million to $120 million)
- EBITDA will approximately triple to a range of $20m to $25m
- Cash flow from operations is expected to be between minus $2 million and plus $2 million
According to Lessem, “increasing operational efficiency” on a large scale would allow the company to break even in operating cash flow in the current fiscal year.
“Our strong brand in the markets we operate, our many years of investment in our product, and the growing adoption of people management software, have provided us with strong momentum for FY23,” he said. declared.
“Despite the broader macroeconomic environment, this momentum is supported by our sales pipeline which underpins our guidance for FY23.”
Elmo Share Price Overview
Like most tech stocks, Elmo’s stock price has been on a wild ride in 2022.
From November to July, it lost more than 60%. It has since recovered to a 34.7% decline since the start of the year.
The market cap sits at around $263 million.