The Class Ltd (ASX: CL1) share price rose 5% to $2.85 this morning after the company released its annual report. Here's what you need to know:
- Revenue rose 28.5% to $29.2 million
- Net profit after tax rose 53.3% to $8 million
- Earnings per share of 6.82 cents
- Dividends of 4 cents per share
- Net cash of $19 million
- Market share grew 5% to 24%
So what?
Class again reported rapid growth in both its Class Super and Class Portfolio software. Class Super added 30,000 new accounts (27% growth) while Class Portfolio added 1,427 (78% growth), and average revenue per user (ARPU) at both solutions was effectively flat.
The company continues to benefit from the migration to more efficient systems, with upcoming new reporting requirements for SMSFs expected to lead to a bunch of customers being forced to migrate to software solutions like Class'.
Now what?
Management continues to invest in both growth and service, with the company adding several new employees in both customer-facing and development roles during 2017. Spending on development has steadily increased over the past 3 years, and is now 12.7% of revenue.
With award-winning software, investment in growth, a track record of execution, and several catalysts for earnings growth in future years, Class could be worth a closer look at today's prices.