The Limeade Inc (ASX: LME) share price is pushing higher on Friday following the release of its half year results.
At the time of writing the employee experience software company's shares are up 2% to $1.50.
How did Limeade perform in the first half?
Limeade was a strong performer in the first half and appears to have navigated through the pandemic with minimal disruption.
According to the release, for the six months ended 30 June 2020, the company recorded a 26% increase in subscription revenues to $27.4 million.
Also heading in the right direction was its gross margin, which improved by 1 percentage point to 77.1%. Management advised that this reflects positive customer mix attributes, higher value contracts, and operational efficiencies.
Pleasingly, operating expenses grew slower than its revenue. They increased 19% on the prior corresponding period to $22.3 million. Combined with its gross margin improvement, this ultimately supported a significant improvement in its earnings.
Limeade posted a pro forma earnings before interest, tax, depreciation and amortisation (EBITDA) loss of $0.7 million. This was an improvement of 58% on the prior corresponding period.
At the end of the period the company had a strong balance sheet with cash of $28.4 million and no debt.
Management commentary.
Limeade Founder and CEO Henry Albrecht said, "Despite the global COVID-19 pandemic and recession, customer retention remains strong and long-term demand for our employee experience solutions has grown significantly. I'm thrilled to see the blue-chip enterprise Limeade customer base – and expert market influencers – recognize Limeade as a pioneer in accelerating both the digital and cultural transformation of work."
"We play in a huge, global market where modern technology is needed more than ever. And we have built a highly resilient and purpose-driven culture – one that innovates and delivers real customer value in all economic climates," he added,
Outlook.
Management revealed that its total pipeline is up 61% from 30 September 2019 to $219 million. Of its qualified pipeline, $18 million sits within the 'Finalist & Verbal' pipeline and $57 million in 'Develop & Prove' pipeline.
Together with its first half performance, this has given the company confidence to maintain its FY 2020 guidance. It continues to forecast revenues of $56.1 million, an EBITDA loss of $5.5 million to $6.5 million, and a net loss after tax of $7 million to $8 million.
