The Rhipe Ltd (ASX: RHP) share price is racing higher after the company provided investors with a trading update.
At the time of writing, the cloud and software solutions provider's shares are fetching for $1.82, up 5.8%.
Let's take a closer look at how Rhipe performed for the period.
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Q3 YTD financial performance
Investors appear pleased with the company's financial update, sending Rhipe shares higher in early morning trade.
For the 9 months ending March 31 (Q3 YTD FY21), Rhipe reported unaudited sales of $273.1 million. This represents a 15% lift from the $236.5 million attained over the prior corresponding period.
Revenue soared to $46.8 million, up 15% when compared against Q3 YTD FY20. Rhipe noted that the continued momentum in Microsoft public cloud products, which includes Office 365 and Azure, drove the result. In total, over 775,000 Microsoft Office 365 licensees were recorded, adding around 16,000 seats per month.
In addition, the company's services and solutions business also accomplished strong growth.
As a result, gross profit rose to $43.1 million, reflecting a gain of 13% compared to this time last year.
Operating expenses moved slightly higher to $30.1 million, a 5% increase over the prior comparable period. Rhipe stated that higher investment efforts in Q3 are likely to flow into the next quarter.
Group operating profit (gross profit minus operating expenses) came to $13.2 million, up 36% on Q3 YTD FY20. The robust performance was attributed to solid revenue growth with careful cost management by the group.
Rhipe provided an acquisition update saying that cyber security distributor, emt Distribution, is expected to be completed by 30 April 2021. Once the business is integrated into Rhipe's ecosystem, new opportunities are anticipated to arise from both existing and new clients.
Looking ahead, Rhipe projects full-year operating profit (ending 30 June 2021) to be above $18 million. This is ahead of the previously forecasted guidance of $17.5 million indicated to investors.
Rhipe share price review
The Rhipe share price has moved in circles over the past 12 months, currently sitting in the mid-point of its 52-week range. The company's shares reached a high of $2.35 in June 2020, before hitting a low of $1.545 last month.
Based on today's share price, Rhipe has a market capitalisation of around $277 million, with 161 million shares on issue.
