Mobile Embrace Ltd reports strong earnings: What you need to know

Mobile Embrace Ltd (ASX:MBE) has exceeded revenue and EBITDA guidance during the 2015 financial year.

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Mobile Embrace Ltd (ASX: MBE) has announced its full-year earnings results this morning, reporting a strong lift in revenues and earnings which both exceeded guidance. The shares rose strongly as a result, climbing 9.4% compared to a 0.6% rise for the ALL ORDINARIES (Index: ^AXAO) (ASX: XAO).

With a market capitalisation of just over $100 million, Mobile Embrace is an innovative mobile payment and marketing company which acts as a Digital Distribution Network for the complete end-to-end mobile customer life cycle. In other words, it helps to connect its clients to customers and claims to enhance its clients' business performance as a result.

Today, the company reported a 71% increase in full-year revenue of $33.02 million – up from $19.27 million in the 2014 financial year and a 62% increase in earnings before interest, tax, depreciation and amortisation (EBITDA) to $5.09 million. These figures compare to estimates of $31.8 million in revenue and EBITDA "greater than $4m" provided in April.

Net profit after tax (NPAT) also rose 22% on the prior year to $3.05 million, while the company ended the period with $9.5 million of cash in the bank.

Pleasingly, the company also established three new international territories during the period which will help it take advantage of scalability. It said: "Looking to the future, our focus in FY16 is to continue to deliver continued sustainable growth from our operations which are highly scalable and are generating strong cash flow."

Although Mobile Embrace is by no means a risk-free investment, it certainly appears to be pulling the right strings to achieve its long-term growth targets.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. You can follow Ryan on Twitter @ASXvalueinvest. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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