The Rhipe Ltd (ASX: RHP) share price has surged 6% in early trade on the ASX after the company reported a 181% increase in net profit after tax (NPAT) to $3.0 million.
The Results
Gross sales increased 22% year-on-year to $114.7 million while net revenue was up 21% to $21.5 million in a strong year for the IT company. Operating profit, representing reported EBITDA excluding FX movements, non-cash share-based expenses and one-off costs, increased a whopping 117% to $5.6 million, albeit off a low base.
Reported EBITDA for the subscription software company grew 66% on prior corresponding period (pcp) to $4.6 million which was ultimately the catalyst for the huge profit leap during the year. The company's cash position also surged, up $5.9 million pcp to $23.2 million as the balance sheet continues to strengthen.
The company continues to see sales growth across Australia and New Zealand as its primary growth driver while the Asian segment saw sales increase 33% to $32 million.
On the product side, Microsoft O365 ARR Sales increased 84% pcp to $47.4 million in sales while Microsoft Azure Sales increased 180% pcp to $14.9 million.
The Rhipe share price hit a 52-week high on Friday to close out the week at $1.545 per share and has continued this momentum following this morning's release.
The Information Technology sector continues to grow strongly, buoyed by a bullish start to the year for IT stocks within the S&P500 in the USA.
The Wrap
Rhipe's continued growth is impressive and looks to be on the path to become the next Altium Limited (ASX: ALU) or Afterpay Touch Group Ltd (ASX: APT). I'm personally not a big fan of the IT sector at the moment but I think Rhipe looks like a good option for those looking to ride the next tech growth stock to the top.
