The Gentrack Group Ltd (ASX: GTK) share price is on fire this morning. Shares in the software company have jumped 27.7% in early trade after an important ASX announcement.
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Gentrack share price rockets higher on revenue upgrade
This morning's market announcement represented an FY21 trading update from the enterprise billing software provider.
Gentrack reported revenue in the second half of the year being "stronger than expected" across its utilities segment. The software group said that reflects early positive signs of its strategy to grow revenues by "providing innovative technologies and services to existing customers, win new business and expand into managed services".
The positive update sparked interest in the Gentrack share price which surged higher at the open. Full year revenue guidance was updated to be approximately $105 million for the group.
The company has previously forecast revenue "slightly ahead of $100.5 million" while earnings before interest, tax, depreciation and amortisation (EBITDA) guidance was bumped from $10 million to $12 million.
Increased incremental revenue, higher throughput and slower than expected increases in research and development expenditure were all sighted as key factors in the higher figures.
While an energy crisis in Europe looms, Gentrack said its core UK energy market exposures remain limited. That's thanks to a number of factors including:
- Increased focus on working capital management reducing individual customer exposures;
- Diversified business across B2B, B2C and Water business lines as well as geographies; and
- Increased revenue forecasts for FY2022 even after accounting for headwinds.
Foolish takeaway
Investors have pounced on this morning's update and sent the Gentrack share price soaring higher on Thursday. Shares in the Kiwi software group have been volatile throughout 2021 but have now climbed 11% in the last 5 days.
