The FINEOS Corporation Holdings PLC (ASX: FCL) share price is heavily in the red today after the insurance software company released its earnings card for FY22.
Shares in the ASX tech company are trading down 6.14% at $1.53 apiece at the time of writing. They previously touched a high of $1.68 shortly after the market opened this morning.
Let's go over what the company announced.
What did Fineos report?
- Total revenue up 17.5% year-over-year (YoY) to €$127.2 million (A$183.38 million)
- Gross profit up 15.3% YoY to €$83 million (A$119.62 million)
- Earnings before interest, tax, depreciation, and amortisation (EBITDA) up 28.8% YoY to €$6.7 million (A$9.66 million)
- Annual recurring revenue (ARR) up 23.4% YoY to €$56.4 million (A$81.27 million)
- Statutory net loss after tax of €$26 million (A$37.47 million)
Fineos advised that it outperformed previous guidance for its subscription revenues, which grew by 34.3% to A$77.52 million and contributed significantly to its top and bottom lines. The organic growth of its services was stated to be 33.5%.
Fineos integrated several acquisitions into the business in FY22, including Spraoi's suite of machine learning and artificial intelligence products. These integrations helped to expand revenues through cross-selling opportunities and inflated the company's sales pipeline for FY23.
What else happened in FY22?
The company's balance sheet strengthened through an influx of cash totalling A$63.84 million, before costs, from its share placement and purchase plans.
Fineos also said that its dominant North American operating segment grew to contribute more to the company's top line, with total contribution growing from 73% to 79% of revenue.
Its headcount remained more or less the same, with 1,075 staff members and contractors. This is expected to stay the same in FY23.
What did management say?
Fineos founder and CEO Michael Kelly said:
FY22 has seen yet another year of strong growth across the key metrics we benchmark our business against, underpinned by our delivery on strategy.
Importantly, we achieved or exceeded the guidance we provided to the market even with the incredibly challenging operating environment faced by most businesses.
I would like to thank all our team for their continued dedication and support that enabled FINEOS to achieve several significant strategic milestones over the past year.
What's next?
Fineos expects revenue for FY23 to fall within the guidance range of A$194.59 million and A$201.80 million, supported by a pipeline it built in FY22 through integrating its acquisitions into its operations.
More broadly, the company notes that it has a positive cash balance with no debt and that its trajectory means it is likely to achieve positive free cash flow in FY24.
Fineos share price snapshot
The Fineos share price is down 66.8% year to date. This is severely underperforming the S&P/ASX 200 Index (ASX: XJO), which is 7.67% lower over the same period.
The company's market capitalisation is $488 million from today's recent price action.
