Now that the ASX August earnings season has drawn to a close, it’s a good time to run the ruler over the WAAAX shares.
Armed with the FY21 full-year reports of all 5 ASX-listed technology shares, let’s assess how these companies compare to each other.
Is there still growth in WAAAX shares?
Firstly, a friendly reminder, WAAAX shares is an abbreviated term for five of the most recognisable tech companies on the ASX: WiseTech Global Ltd (ASX: WTC), Afterpay Ltd (ASX: APT), Appen Ltd (ASX: APX), Altium Limited (ASX: ALU), and Xero Limited (ASX: XRO).
While the notoriety of all these companies has been high in recent years, the performance of their respective share prices has been mixed. The fact is each of these companies operates in vastly different industries. For instance, logistics management software and payment solutions are like chalk and cheese.
However, there are likely many investors out there grappling with which investment might provide the best returns in the future. For that reason, let’s compare the growth figures of each for FY21.
How do the WAAAX shares compare?
There are many ways to evaluate growth, but there are a few common ones. In this comparison, we’ll be focusing on revenue and earnings.
Revenue tends to be a go-to metric for evaluating growth because often ‘growth’ companies prioritise this over profitability.
Below is a table that summarises each of the five companies FY21 revenue growth:
|ASX-listed company||FY21 revenue||Growth year-over-year|
|WiseTech Global Ltd (ASX: WTC)||$507.5 million||24%|
|Afterpay Ltd (ASX: APT)||$924.7 million||78%|
|Altium Limited (ASX: ALU)||US$180.2 million||6%|
|Appen Ltd (ASX: APX)||US$196.6 million||-2%|
|Xero Limited (ASX: XRO)||NZ$848.8 million||18%|
As we can see, Afterpay delivered the highest rate of growth year-over-year (YoY) out of the WAAAX shares. This was underpinned by strong customer growth in North America and an increase in repeat use.
At the other end of the scale, Appen failed to grow its revenue in FY21. Reportedly, this was the result of its project delivery being skewed to the second half of the year. In addition, Appen customers broadened their spending outside of digital advertising.
It is reassuring when ASX shares are delivering double-digit revenue growth. However, that is only half the story when it comes to comparing growth figures.
At some stage, investments need to grow profits to return value to shareholders. On that note, let’s take a look at how the WAAAX shares performed on an earnings basis in FY21.
|ASX-listed company||FY21 profit/(loss)||Growth year-over-year|
|WiseTech Global Ltd (ASX: WTC)||$105.8 million||100%|
|Afterpay Ltd (ASX: APT)||($159.4 million)||-597%|
|Altium Limited (ASX: ALU)||US$35.3 million||79%|
|Appen Ltd (ASX: APX)||US$6.7 million||-55%|
|Xero Limited (ASX: XRO)||NZ$19.8 million||493%|
Although Afterpay achieved the highest revenue growth, its bottom-line loss widened in FY21. Meanwhile, cloud-based accounting company, Xero, shot the lights out with a staggering 493% increase in profits.
Additionally, WiseTech and Altium posted similarly impressive earnings growth. Based on this data, WiseTech has become the most profitable of the WAAAX shares, pumping out $105.8 million in net profits after tax.