Key points
- The Elmo share price is up more than 9% today
- The company reported 35% organic growth in H1 FY22
- Revenue increased by 41% on the first half of FY21
The ELMO Software Ltd (ASX: ELO) share price is soaring today on the back of the company's half-year financial results.
In afternoon trade, the business software company's shares are trading at $4.22, up 9.04% at the time of writing. The share price reached as high as $4.38 in early trading. For perspective, the S&P/ASX 200 Index (ASX: XJO) is 0.87% higher.
Let's take a look at what the company reported today.
Elmo share price escalates on half-year results
Some highlights from Elmo's H1 FY22 report include:
- $43.1 million revenue, up 41% from H1 FY21
- $98.3 million annualised recurring revenue (ARR)
- 35% organic growth compared to H1 FY21
- EBITDA of $0.3 million, up $0.9 million from H1 FY21
What else happened in the half?
Elmo's total cash receipts in the first half of the financial year were $56 million. This represents a 63% increase on the first half of FY21.
The company provides cloud-based software solutions for HR, payroll, and rostering in Australia, New Zealand, and the UK.
In the past 12 months, the company has topped $101 million in cash receipts. This is a 57% rise on the first half of the previous financial year. Since H1 2018, the company's cash received has increased from $21.2 million to $101.4 million. That's a 378% improvement in four years.
The company's cash balance finished at $58.4 million as at 31 December 2021. The figure is nearly 29% less than H1 FY21 when Elmo Software held $81.9 million. However, the company says its operating monthly cash burn fell by 36% compared to the first half of 2021.
What's next for Elmo?
Elmo has improved its guidance for FY22 to between $107 and $113 million ARR. This represents 28% to 35% year on year growth.
Meanwhile, the company predicts its revenue to increase by 32% to 39% year on year to between $91 and $96 million. The company's expected EBITDA is between $1.5 to 6.5 million.
My Foolish colleague Tristan reported recently that Morgan Stanley rates the share price as a buy with a price target of $7.80. That's around 84% more than the share price at the time of writing.
Share price recap
The Elmo share price has shed 36% in the past year. It's fallen 7% in the past month alone but it has recovered more than 6% in the past week.
Meanwhile, the broader ASX 200 Index has returned nearly 5% over the past 12 months.
The company has a market capitalisation of about $377 million based on its current share price.
