The Nitro Software Ltd (ASX: NTO) share price is under pressure following the company's release of its results for the half year ended June 30 2020. In early afternoon trading, the Nitro Software share price is down 8.13%. This comes on the heals of a very strong year for the company, which has seen its share price gain nearly 38% since 2 January. And the Nitro Software share price has rocketed an impressive 186% since its 16 March COVID-19 driven low.
What did Nitro Software report?
The global document productivity software company's share price is down today despite the company reporting strong recurring revenue growth.
The company reported its first half 2020 subscription revenue grew to US$9.1 million, up 60%. Total revenue increased 14% over the same period in 2019, reaching US$19.1 million.
Annual recurring revenue (ARR) of US$20.2 million grew by 57%
Nitro increased its research and development (R&D) spend to US$3.8 million, up 7% from the prior corresponding period, as the company continues to invest in product innovation and evolution.
Earnings before interest, taxes, depreciation and amortisation (EBITDA) came in at a loss of US$1.6 million. The company pointed to foreign exchange losses largely due to IPO proceeds held in Australian dollars before converting to US dollars.
Nitro held a cash balance of US$43.9 million as at 30 June with no debt.
The company reported it serves 11,256 business customers. These include 68% of the 2019 Fortune 500.
Looking ahead, Nitro Software reported it expects to deliver its prospectus forecast for FY2020. It forecasts revenue will grow to US$40.5 million with an EBITDA loss of US$5.3 million, which it notes is subject to foreign currency fluctuations.
What did Nitro's CEO say?
Nitro's Co-Founder & CEO, Sam Chandler, said:
Throughout the past six months, the Nitro team has delivered on our growth targets despite the current economic environment, securing some of the world's largest companies as new customers, expanding usage across our existing customer base, and achieving very strong growth in recurring revenue. The pandemic has led to an acceleration in digital transformation as organisations shift toward 100% digital workflows, supported by mostly remote workforces. Nitro's products have a clear opportunity to deliver strong operational and financial value to businesses, now and in the future…
I'm excited about the road ahead. We are well positioned to take advantage of accelerating trends in digital transformation to deliver on our ambitious growth plans.
About the Nitro Software share price
The Nitro Software share price selloff today indicates the market was likely expecting more from its first half results. But even after this morning's 8% slide, the Nitro Software share price remains up nearly 18% since the beginning of August.
