Why is the RMA Global (ASX:RMY) share price rising today?

The RMA Global (ASX: RMY) share price is up 3.8% today after the company released its quarterly business update. 

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The RMA Global Ltd (ASX: RMY) share price is rising today after the company released its quarterly business update outlining increases in recurring revenue. 

The RMA Global share price is currently up 3.85%, trading at 27 cents per share.

RMA Global is an Australia-based online digital marketing business. It provides data on residential property sales in particular and usually performs strongly in periods of increased housing market demand, such as the current time.

The company generates revenue from subscription services and promoter services. Geographically, it has a presence in the United States, Australia and New Zealand (ANZ), but it derives most revenue from ANZ markets.

RMA Global's quarterly business update

RMA Global advised that its recurring revenue for the third quarter of FY21 was $2.97 million, up 17% quarter-on-quarter (QoQ) and 59% year-on-year (YoY). Cash flow also improved, with net receipts from customers in the same quarter FY21 of $3.66 million, up 19.5% QoQ and 59% YoY.

In the United States, it now has 115,000 real estate agents on its platform and 109,800 reviews. Total agents on the platform and the total number of reviews for this quarter of FY21 increased by 148% and 363%, respectively, compared to the same quarter last financial year.

RMA says its US focus is to drive agents on the platform and reviews. As of 19 April 2021, there were 115,000 agents on the US platform who have collected a total of 109,800 reviews (including imported reviews). RMA says this increase reflects a continuing strong agent uptake and engagement with the platform.

While the US focuses on increasing agents on the platform and their reviews, subscription revenues are growing, with 193% higher revenues generated in 1H FY21 compared to 2H FY20, but off a low base. RMA says its revenues are expected to increase in the second half of FY21 as the company allocates more resources to monetising the agent base.

It also announced continued growth in all products across Australian and New Zealand (ANZ) markets. In addition, RMA said that the coronavirus pandemic has had no material impact on its business to date, which could be due to record-low interest rates across the world and the increased demand on the housing market.

What RMA management says

RMA CEO Michael Davey highlighted the company's 18% increase in ANZ markets.

We are very pleased with our growth in ANZ over the last few months, which has surpassed our expectations. In a rapidly changing environment, we are able to adapt to our customers' needs which is reflected in our growing revenues and increasing customer engagement.

The US has also seen us accelerate the number of agents on the platform and we anticipate an exciting pipeline of activity to come in the second half of the year.

RMA Global share price snapshot

The RMA Global share price is down 10% since 2021 began. It has gained 8% over the past 12 months, but that's significantly lower than the broader communications services sector.

Motley Fool contributor Lucas Radbourne-Pugh has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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