'Power and resilience': Hipages share price leaps 14% on revenue boost

Why rising inflation and interest rates could actually work for Hipages.

Key points
  • Hipages shares surged nearly 14% today as the company released its Q4 FY22 activities report.
  • The online tradie marketplace saw revenue leap 9% on the prior corresponding period 
  • The company sees high interest rates and inflation as potential benefits -- as it could mean tradies rely more on its platform for jobs 

The Hipages Group Holdings Ltd (ASX: HPG) share price soared today amid the company's revenue leaping in the fourth quarter of FY22.

The Hipages share price surged 13.6% to finish the session at $1.295. For perspective, the S&P/ASX 200 Communication Services Index (ASX: XTJ) jumped 0.61% today.

So what did Hipages report today?

A construction worker leaps high in the air on a building site.

Image source: Getty Images

Hipages share price lifts amid 9% revenue boost

It was onwards and upwards for the Hipages share price today following the release of the company's Q4 FY22 activities report. Highlights included:

  • Total revenue leapt 9% on the prior corresponding period (pcp) to $15.8 million
  • Average annual revenue per unit (ARPU) surged 10% to $1,806
  • Hipages Australia ARPU soared 16% to $1,904
  • Subscription tradies leapt 11% on the pcp to 34,600
  • $13.2 million cash and funds on deposit, no debt

What else did Hipages report?

Hipages is an online tradie marketplace and software-as-a-service (SaaS) provider that connects homeowners and companies with tradies.

Tradie registrations are rising and job numbers and churn are normalising following the COVID-19 pandemic, according to Hipages.

The company delivered free cash flow of $0.3 million in the fourth quarter, compared to an outflow of $2.5 million in the previous quarter.

Hipages highlighted its efficient business model is underpinning favourable free cash flow and balance sheet strength.

Management commentary

Commenting on the results that boosted the Hipages share price today, CEO and co-founder Roby Sharon-Zipser said:

For Hipages Group to continue to grow in such a challenging environment, while generating positive free cash flow and closely managing our expenses, highlights the power and resilience of our business model.

We will continue to invest in our products and technology and develop new expansionary services to enhance the customer experience and expand our addressable market.

Looking ahead

Hipages is expecting rising inflation and interest rates to bring "balance to marketplace". With this in mind, Hipages predicts tradies will be more reliant on the company's platform to source jobs.

On 25 August, Hipages will release its FY22 full-year results and update the market further on its outlook for FY23.

Hipages share price snapshot

The Hipages share price has dived 59% in the past year and more than 66% year to date.

However, in the past month, the company's share price has lifted almost 28%.

Hipages has a market capitalisation of about $169 million based on the current share price.

Motley Fool contributor Monica O'Shea has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has positions in and has recommended Hipages Group Holdings Ltd. The Motley Fool Australia has positions in and has recommended Hipages Group Holdings Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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