ASX tech shares are plummeting today but this one just hit a 9-year high

The Xref share price was flying this morning before retreating.

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Key points

  • The Xref share price hit a 9-year high of 80 cents after the company released a trading update
  • The company's sales improved by 96% compared to the previous half
  • The All Technology Index is down 5% today

ASX tech shares may be crashing today but one company hit a nine-year high this morning. The Xref Ltd (ASX: XF1) share price is currently up 0.7% at 71.5 cents. However, in intra-day trade, it hit 80 cents, a nine-year high. The last time Xref shares hit more than 80 cents was mid-2012.

For perspective, the S&P/ASX All Technology Index (ASX: XTX) is currently down 5.2%.

This movement in the Xref share price comes after the human resources technology company reported a 96% rise in sales in its latest trading update.

Let's take a look at what the company revealed today.

Xref share price soars on results

The Xref share price soared this morning after the company provided an update for the second quarter and first half of financial year 2022. Highlights included:

  • $10 million total sales for the first half of FY22, soaring 96% on previous corresponding half
  • $8.2 million total revenue for the first half of FY22, up 68% on the previous corresponding half
  • Sales of $4.6 million, up 71% on the previous corresponding quarter
  • Revenue of $4.3 million, a 65% gain on the previous corresponding quarter
  • Cash receipts of $4.7 million
  • Cash surplus of $0.2 million

What else did this ASX tech share report?

Xref revealed it has increased its ability to gain new clients digitally during the COVID-19 pandemic. This has reduced its dependence on traditional sales methods.

The company has also been able to reduce its spend on marketing by 50%.

New clients in the quarter included Fortescue Metals Group Limited (ASX: FMG), Chartered Accountants Australia and New Zealand, The University of the Sunshine Coast, and St Vincent's Health Australia.

Globally, this ASX tech share also attracted clients including English Premier League football club Wolverhampton Wanderers, along with the University of British Columbia, Trulioo, and the Evangelical Lutheran Church in North America.

The company's credit use improved 52%, while RapidID's net revenue soared 363%. RapidID is a technology platform that allows companies to verify the ID of the people they employ.

The net revenue from RapidId improved due to more bulk discounts from third-party vendors.

What did management say?

Commenting on the results and future direction of this ASX tech share, Xref CEO and executive director Lee-Martin Seymour said:

We are starting to see historical Australian seasonal fluctuations reduced by stronger demand in the sector and the growth of both RapidID and our overseas operations.

While only halfway complete, we have already built a strong foundation for FY2022. Both new business demand and current client usage during the holiday season has been unprecedented and suggests that our Q3 and Q4 FY2022 performance will be strong.

In tandem, we are preparing to launch products to grow the marketplace and platform subscriptions. It is a very exciting period in our growth journey.

Xref share price snap shot

The Xref share price has soared 97% in the past year. In the past month, it has gained around 11%, but it has fallen more than 4% in the past week.

Meanwhile, the broader S&P/ASX 200 Index (ASX: XJO) has returned 0.74% in the past 12 months. The All Technology Index has fallen by 21% over the same period.

Xref has a market capitalisation of around $131.5 million based on its current share price.

The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns and has recommended Xref Limited. The Motley Fool Australia has recommended Xref Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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