Among the flurry of earnings flying out this month, you might have missed this ASX All Ordinaries tech share which produced solid top-line growth in the first half.
The Fineos Corporation Holdings PLC (ASX: FCL) share price is finishing the week lower than where it started.
However, shares in the insurance software provider climbed 3.1% today after falling 3% yesterday. This follows the release of Fineos' results for the first half of FY22 on Thursday.
ASX All Ordinaries tech share slips despite productive half
- Revenue up 24.4% to 65.4 million euros (A$102.04 million)
- Annual recurring revenue reached 51.8 million euros, increasing 35.2% year on year
- Gross profit of 42.5 million euros, representing an increase of 25.6% year on year
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 103.1% to 6.5 million euros
- Net loss after tax narrowed to 4.6 million euros from 5.1 million euros
- Cash balance as at 31 December 2021 of 48.6 million euros
What else happened during the half?
Investors have lacked an attraction to this ASX All Ordinaries share this week. However, Fineos showed improvement across all of its key metrics in the first half.
According to the release, top-line growth of 24.4% was driven primarily by cross-selling and up-selling to its existing client base. In addition, the company notched up another client win, helping diversify its customer base.
Notably, the largest organic growth was witnessed in Fineos' subscription revenue — increasing 39.5% year on year. Meanwhile, services revenue experienced a 16.4% improvement on the prior corresponding period.
Furthermore, the company highlighted its improvements in de-risking its client concentration during the period. In August 2021, 74% of Fineos' revenue was tied to its top 10 clients. However, that number has been reduced further to less than 61%.
During the half, Fineos raised around $74 million to feed future growth across its operations and expand into new markets.
What's next?
Investors might have been displeased to see Fineos guide towards the lower end of its previously stated revenue range for FY22. For reference, the range provided is between 125 million euros and 130 million euros.
Although, on a positive note, the company reaffirmed expectations for subscription revenue to grow at an annualised rate of around 30%. This was followed up with a disclaimer, noting the guidance is subject to prevailing influences from COVID-19 and the global economy.
How has this ASX All Ordinaries tech share performed?
The Fineos share price has been unable to attract a higher value so far in 2022. In fact, shares in the insurance tech provider have slumped 27% since the year kicked off.
To be fair, this is relatively in line with the broader performance across the tech sector. For example, the S&P/ASX All Technology Index (ASX: XTX) is down 23% year to date.
