The RPMGlobal Holdings Ltd (ASX: RUL) share price is having a very strong session.
In morning trade, the ASX tech share is surging 15% to $1.60.
Why is this ASX tech share surging today?
Investors have been buying the mining software company's shares after it released an update on its performance in FY 2023.
According to the release, Total Contracted Value (TCV) derived from software sales is expected to be $70.5 million in FY 2023. This is a $14.3 million or 25.4% increase from the $56.2 million it achieved in the previous financial year.
Pleasingly, the majority of this TCV is from subscription sales. The ASX tech share revealed that its subscription sales accounted for TCV of $65.8 million for the year. The balance comprises perpetual sales of $2.9 million and new maintenance revenue from perpetual sales of $1.8 million.
Another metric heading in the right direction is pre-contracted, recurring, non-cancellable software revenue. It currently stands at $126 million, which is up $31 million or 32% since last year. This revenue will be recognised in future years.
Management also revealed that the company's Advisory business had a "really strong" year. It is expected to finish the year with a contribution of $6.3 million, which represents an increase of $2.2 million or 54% over FY 2022.
What about earnings?
In light of the above, the company expects its operating EBITDA (before once-off management incentives) to finish the year at $15 million. This is ahead of its guidance of $13.8 million ($14.2 million excluding M&A costs).
Management also revealed that it will finish the year with a hefty cash balance. It had cash on hand (and no debt) of $34.7 million at 30 June. That's despite spending $7.6 million during the year on the company's share buyback and $0.9 million on company acquisitions.
This may provide the ASX tech share with an opportunity to further extend its buyback when it releases its audited results next month.
