Siteminder Ltd (ASX: SDR) shares are catching the eye on Wednesday.
In morning trade, the ASX 200 tech stock is up over 9% to a two-year high of $5.98.
Why is this ASX 200 tech stock surging?
Investors have been fighting to get hold of the hotel software provider's shares this morning following the release of a trading update for FY 2024.
According to the release, Siteminder's revenue increased 26% to $190.7 million for FY 2024.
A key driver of this was its Transaction revenue, which grew 41.2% to $68.3 million. Management notes that its metasearch offering, Demand Plus, performed best. It is benefiting from strong adoption and improving booking conversion.
Transaction product uptake increased by 3,800 in the second half (versus 2,600 in the first) to finish FY 2024 at 26,300. This represents a 32.2% increase year on year. Management highlights that it continues to enjoy success in driving the adoption of SiteMinder Pay and Demand Plus by both new and existing customers.
The key subscription revenue stream also grew strongly during FY 2024. Subscription revenue increased 18.8% year over year to $122.4 million.
This ultimately led to the ASX 200 tech stock's annualised recurring revenue (ARR) lifting 20.8% to $209 million. This comprises Subscription ARR of $133.1 million (up 14.5%) and Transaction ARR of $75.9 million (up 33.7%).
Also heading in the right direction was its underlying free cash flow. Although it was negative $6.4 million in FY 2024, it was positive $2.3 million in the second half. This bodes well for the company's cash generation in the new financial year.
Finally, SiteMinder's 'Rule of 40' performance has now improved from -10.3 at the time of IPO to 21 in the second half. Management advised that it intends to continue its progress under the 'Rule of 40' through a combination of strong organic growth and prudent cost management.
Long-term growth trajectory 'significantly improved'
The ASX 200 tech stock's CEO, Sankar Narayan, was pleased with FY 2024 and spoke very positively about the company's growth outlook. He said:
I am incredibly proud of our team for getting both Dynamic Revenue Plus and Channels Plus into pilot and into the hands of hoteliers. More work remains to be done but I am extremely pleased with the initial performance of these groundbreaking products and the feedback we have received from our customers.
SiteMinder has significantly improved its long-term growth trajectory with the three-pillar Smart Platform strategy expanding the company's monetisation opportunities, and strengthening its already enviable position as the default choice for the convergence of distribution, revenue optimisation and market intelligence.
Our business has never been better positioned to deliver high, sustainable organic growth and progress towards industry-leading SaaS economics.
