PayGroup (ASX:PYG) share price wobbling on half year revenue surge

Shares are struggling despite a big lift in revenues.

| More on:
A piggy bank balances on a ribbon, indicating a wobbly share price

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The PayGroup Ltd (ASX: PYG) share price was well into the green in early morning trade, up 2.2%. It's since given up those gains and is currently down 2.2%

PayGroup shares may be getting impacted by the wider Omicron variant led market selloff, which is seeing the All Ordinaries Index (ASX: XAO) down 0.6% at time of writing.

Below, we take a look at the Software as a Service (SaaS) company's half year results for the 6 months ended 30 September (1HFY22).

What half year results were reported?

The PayGroup share price is wobbling despite the company reporting an 83% increase in statutory revenue of $12.8 million.

New contracts signed reached a record $9.6 million, up 78% on the prior corresponding period.

Normalised earnings before interest, taxes, depreciation and amortisation (EBITDA) of $1.5 million, excluding one-off expenses and acquisition costs, slipped from $1.8 million in 1HFY21. PayGroup said that this figure incorporates continued investment in its platform capabilities for future growth.

The company said that it is currently servicing more than 2,500 enterprise customers.

Commenting on the half year results, PayGroup's managing director Mark Samlal said:

Our strong operational performance and continued investment in our platform underpins our ability to scale the payroll business, expand margins and execute on key monetisation opportunities going forward.

We have made significant progress to date and are excited by the organic opportunities in FY22 and beyond. This is reflected in the growth of our current pipeline, which is 6 times larger than 12 months ago. We are highly confident that we have the right foundations in place and remain focused on delivering on key organic opportunities to drive sustainable long-term growth.

Samlal also reaffirmed the company's guidance. "We have affirmed FY22 ARR [annual recurring revenue] guidance of at least $37 million and provided FY22 statutory revenue guidance of $26 million, which represents more than 95% of the exit ARR announced at FY21," he said.

PayGroup share price snapshot

The PayGroup share price has struggled in 2021, down 28%. That compares to 10% year-to-date gain posted by the All Ords.

Over the past month, PayGroup shares are down 16%.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Technology Shares

Three analysts look at tech options on a wall screen
Technology Shares

Xero shares doubled the ASX 200 return in FY24. What's next in FY25?

Will FY25 be another good year for software business Xero?

Read more »

A young man talks tech on his phone while looking at a laptop. A financial graph is superimposed across the image.
Technology Shares

Up 87% in a month, this ASX stock is winning millions in AI work

The gains continue piling for this company's stock price.

Read more »

A man dives off a boat into the sea, indicating a share price fall
Share Market News

Why did the Nasdaq Index take a dive on promising US inflation data?

Cooling US inflation sent the Nasdaq Index tumbling overnight. But why?

Read more »

A businessman looking at his digital tablet or strategy planning in hotel conference lobby. He is happy at achieving financial goals.
Technology Shares

Buy this ASX tech stock for a 20%+ return: Goldman Sachs

The broker believes investors could get market-beating returns from this auto listings leader.

Read more »

A woman scratches her head in dismay as she looks at chaotic scene at a data centre
Opinions

Which ASX shares could soar if AI falls into a $500 billion hole?

The math ain't mathing for one professional investor.

Read more »

A young man goes over his finances and investment portfolio at home.
Technology Shares

Netwealth share price higher on record quarter

What is causing investors to hit the buy button today?

Read more »

4 teenagers playing mobile game
Technology Shares

Goldman Sachs names 1 ASX 200 stock to buy and 2 to hold

Here's what the broker is saying about these three stocks.

Read more »

A woman wearing a black and white striped t-shirt looks to the sky with her hand to her chin contemplating buying ASX shares today as the market rebounds
Share Gainers

Would I be crazy to buy DroneShield shares now at over $2?

After soaring more than 700% in a year, can DroneShield shares keep flying high?

Read more »