The Readytech Holdings Ltd (ASX: RDY) share price has stepped into the green during morning trade and is now trading 1.5% higher at $3.38.
Earlier, it was doing even better at $3.55, which is a new 52-week high for the people management software provider.
There's no market-sensitive news out of the company today. Nonetheless, the shares have exploded from a previous low of $2.53 on 23 August.
Let's take a closer look at what's behind this momentum.
What's fuelling this growth?
The Readytech share price has been on the move ever since the company reported its FY21 earnings late last month.
In its report, the company recognised a 27% increase in revenue to $50 million. A key takeaway was its 45% net profit after tax (NPAT) gain to $2.1 million. Impressively, 87% of its revenue came from subscription contracts in FY21 and revenue retention was 96%.
It also saw an almost $7,000 increase in average revenue per customer to $35,000 for the year, coupled with an 11% increase in marketing spend.
Let's not forget the company's acquisition of software business Open Office back in May on an $80 million valuation.
On this positive backdrop, Readytech forecasts revenue growth in the mid-teens and an EBITDA margin of 36%-38% in FY22. Longer-term, it hopes to generate $125 million in revenue by FY26, which is a cumulative 150% increase on FY21.
Investors appear to have bought in on Readytech's growth narrative. They have bumped the Readytech share price 40% higher since its earnings release. In the first 5 days after its announcement, the Readytech share price climbed 25%.
This appears to be the main tailwind behind the company's shares over the past few weeks.
Readytech share price snapshot
The Readytech share price has climbed 61% this year to date and 86% over the past 12 months.
Readytech shares are up another 9% in the past week alone.
It is outpacing the S&P/ASX 200 index (ASX: XJO) which has risen about 25% over the past year.
