The Iress Ltd (ASX: IRE) share price will be one to watch on Thursday following the release of its third quarter update.
How did Iress perform in the third quarter?
The financial technology company had a positive three months and delivered a 3% increase in revenue compared to the prior corresponding period.
In addition to this, Iress reported a 2% lift in segment profit for the quarter. This means its pro forma segment profit is now up 6% for the first nine months of FY 2020 in constant currency terms.
Management advised that it has achieved 8% revenue growth in the Asia Pacific (APAC) region in the first nine months of the year. This is being driven by ongoing demand for Xplan and Super solutions. This has offset COVID-19 impacting timing of projects in UK.
Outlook.
For the fourth quarter, the company is expecting to achieve another increase in revenue and segment profit and notes that new project work is underway.
It advised that the OneVue acquisition is due to complete on 6 November and expects a seamless integration of advice and execution with significant efficiencies.
In light of this, the company has reinstated its profit guidance for FY 2020. On a constant 2019 currency basis, segment profit, excluding the impact of the OneVue acquisition, is expected to be around the same level as FY 2019's segment profit result of $152 million.
Iress chief executive, Andrew Walsh, said: "Iress has delivered a consistent performance in Q3. The strength of our recurring revenue model has been clearly demonstrated during 2020. I am proud of the way the team has continued to perform, while mostly working from home. Although there are high levels of uncertainty around Covid-19 transmissions and government restrictions, we are continuing to prioritise the health and wellbeing of our people and delivering service continuity and major projects for clients."
"We have delivered over 500 client conversions to Xplan this year and two mortgage clients went live in August. The projects to deploy our super administration technology and service are progressing well. QuantHouse is also performing well and has achieved profitability. Covid-19 is impacting the timing of projects and business activity, postponing the revenue growth we envisaged at the beginning of the year," he added.
