It has been a disappointing day of trade so far for the Catapult Group International Ltd (ASX: CAT) share price.
In late morning trade the sports analytics and wearables company's shares are down almost 3% to $1.20 following the release of its latest quarterly update.
What was in the update?
According to today's release, Catapult's preliminary unaudited revenue for FY 2018 is $75.8 million, representing growth of 26% on a reported basis and 19% on a pro forma basis. Its unaudited group earnings before interest, tax, depreciation, and amortisation (EBITDA) came in at $0.6 million.
Both these figures are in line with the guidance management provided for the full-year and were driven largely by the growth of its Elite Wearables business.
Revenue in the segment grew 29% on the prior corresponding period to $34 million. In addition to this, the segment finished the year with annualised recurring revenues (ARR) of $24.4 million, also up 29% year-on-year.
Subscriptions now account for 60% of Elite Wearables revenue, up slightly from 58% in FY 2017.
Its biggest segment, Elite Video, didn't have quite as strong a year. It achieved revenue of $39.4 million during the period, up 9% on a pro forma constant currency basis. Segment ARR grew just 5% to $28.4 million.
Its Prosumer business has had a strong start but has yet to generate material revenues. It delivered revenue of $3.4 million in FY 2018, up from $1 million a year earlier.
This sales growth led to a net operating cash flow of $1.5 million in the fourth quarter, an improvement of $7.3 million on the prior corresponding period. As a result, FY 2018 net operating cash flow came in at $6.4 million, marking the first full year of positive operating cash flow for Catapult.
However, due to ~$5 million cash outflow from investing activities, the company finished the period with a cash balance of $31.7 million, down $3.2 million from the end of the last quarter.
Should you invest?
With Catapult's shares trading within sight of their 52-week low, they certainly are a tempting option. Especially with its operating cash flows now positive and its sizeable cash balance.
However, I'm still not ready to invest just yet. I intend to hold out for a few more quarters of strong revenue growth and improving operating cash flows before making a move.
Until then, I would prefer to invest in fast-growing and profitable tech shares such as Citadel Group Ltd (ASX: CGL) and Altium Limited (ASX: ALU).
