The EROAD Ltd (ASX: ERD) share price is on the move on Friday morning.
At the time of writing, the transportation technology services company's shares up 0.5% to $5.26.
Why is the EROAD share price edging higher?
Investors have been buying the company's shares this morning following the release of its full year results.
According to the release, for the 12 months ended 31 March, EROAD reported a 13% increase in revenue to NZ$91.6 million and a 13% lift in earnings before interest, tax, depreciation and amortisation (EBITDA) to NZ$30.7 million.
Management advised that this was driven by growth in contracted units across all its markets and a stable average SaaS monthly revenue per unit (ARPU) of NZ$58.30 per month.
At the end of the period, the company's Annualised Monthly Recurring Revenue metric (AMRR) had increased to NZ$88.4 million from NZ$84 million a year earlier.
EROAD's Chief Executive Officer, Steven Newman, said: "In a year that presented challenging macro-economic conditions we continued to grow across all of our markets delivering a 13% increase in revenue and Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) year on year. In addition, we accelerated our growth strategies to take better advantage of opportunities that have emerged from the challenges of the last twelve months. EROAD is now stronger than ever before, better positioned to capture the increasing growth opportunities in telematics."
Outlook
EROAD has reiterated the guidance it previously provided for FY 2022. Management explained: "It is anticipated that the percentage revenue growth in FY22 will strengthen from that delivered in FY21, but not be at the level experienced in FY20."
In New Zealand, the company expects to add a similar number of units to that seen prior to FY 2021 (~9,000 p.a). Its New Zealand Ehubo sales will be complemented with Clarity Dashcam sales.
Whereas in North America, EROAD expects increased unit growth in FY 2022 as the economy returns to pre-COVID conditions. This should be supported by Clarity Dashcam sales.
In Australia, it expects growth during the next two years to come predominantly from an Enterprise pipeline of 15,000 to 20,000 vehicles.
Finally, management advised that it continues to accelerate new product delivery for future growth in FY 2023 and FY 2024. This will see the company spend 24% to 27% of revenue on research and development during FY 2022. Positively, despite this, EROAD anticipates that its EBITDA margin will be maintained for FY 2022 and improve at the end of the financial year.
