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

Shares are struggling despite a big lift in revenues.

| More on:

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).

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

Image source: Getty Images

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

A smiling market stall holder selling flowers holds out a payment machine to a customer who hovers her telephone over it to pay via Zip
Earnings Results

Tyro Payments FY26: Earnings rise, growth outlook improves

Tyro Payments reports rising FY26 profit, strong growth metrics, and unveils upbeat guidance for FY27.

Read more »

Two work colleagues looking at a laptop and discussing something.
Earnings Results

Electro Optic Systems half-year earnings surge on booming defence demand

Electro Optic Systems shares are in focus as FY26 half-year results reveal surging revenue and an improving profit trend after…

Read more »

Happy man and woman looking at the share price on a tablet.
Earnings Results

SiteMinder: FY26 profit nearly doubles, revenue jumps 22%

SiteMinder’s profit and revenue soared in FY26, with the company reporting rapid Smart Platform adoption and a positive outlook.

Read more »

Woman and man calculating a dividend yield.
Technology Shares

Up 52% from its low! Has the WiseTech share price finally bottomed out?

Could this beaten-down ASX tech stock finally be turning around?

Read more »

Two IT professionals walk along a wall of mainframes in a data centre discussing various things
Technology Shares

Two ASX data centre stocks rated a buy

UBS expects the strong growth at these companies to continue.

Read more »

A silhouette shot of a man holding a control in his hands and watching as a drone hovers overhead with sunrays coming from the sky.
Technology Shares

Are DroneShield shares worth buying and holding?

I think DroneShield has a big opportunity, but investors need to be comfortable with the risk.

Read more »

Concept image of a businessman riding a bull on an upwards arrow.
Share Gainers

Why are Nuix shares rocketing 26% on Monday?

Investors are piling into Nuix shares on Monday. But why?

Read more »

A woman presenting company news to investors looks back at the camera and smiles.
Earnings Results

Data#3 posts double-digit profit growth in FY26 earnings

The company reported a 13.1% increase in net profit for FY 2026.

Read more »