ASX small-cap stock Hipages Group Holdings Ltd (ASX: HPG) is off to the races today.
Shares in the online tradie marketplace operator closed yesterday at $1.28. In earlier trade on Thursday, they leapt to $1.62 apiece, up 26.8%.
After some likely profit-taking, shares are swapping hands for $1.52 apiece at the time of writing, up 18.4%.
For some context, the All Ordinaries Index (ASX: XAO) is up 0.3% at this same time.
This strong outperformance comes following the release of Hipages' financial results for the 12 months ended 30 June (FY 2024).
Read on for the highlights.
ASX small-cap stock soars on return to profit
- Total revenue of $75.8 million, up 13% from FY 2023
- Recurring revenue of $72.1 million, up 15% year on year
- Underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) of $16.4 million, up 33% from FY 2023
- Statutory net profit after tax (NPAT) of $3.6 million, up from a net loss after tax of $5.1 million last year
What else happened with Hipages in FY 2024?
Atop the return to profit from a steep loss last year, the ASX small-cap stock looks to be grabbing investor interest after reporting record marketplace activity in FY 2024, with tradies competing for fewer jobs driving the 15% increase in recurring revenue.
Hipages said that its proactive marketplace management helped it achieve a 13% increase in monthly recurring revenue (MRR) and an 11% year-on-year increase in average annual revenue per unit (ARPU).
EBITDA margins also improved by 4% from FY 2023, coming in at 22% this year.
While operating expenses were up 9% from last year to $59.4 million, Hipages noted that operating expenses improved to 78% of revenue over the 12 months.
Operating cash flow was also up 23% to $19.3 million. This saw positive free cash flow at $2.1 million, following a $2.8 million cash outflow in FY 2023.
Over the year, connections increased 3% to 2.7 million, with the ASX small-cap stock noting a record 86% of all jobs connected with a tradie.
The year also saw Hipages roll out a range of new platform features and functionalities.
As at 30 June, the company had cash and funds on deposit of $21.3 million, with no debt
What did management say?
Commenting on the results sending the ASX small-cap stock soaring today, Hipages CEO Roby Sharon-Zipser said:
The value proposition of the Hipages online marketplace continues to build in the current uncertain economic environment. Tradie subscriptions are growing as tradies seek high quality leads and homeowners are benefiting from strong job connection rates, which now stand at a record 86%…
Our strong operating cash flow enabled us to continue investing substantially in optimising our business and building out the platform for the future.
During the second half we successfully launched our tradiecore single tradie platform and have a range of exciting upgrades and initiatives planned for FY 2025.
What's next for the ASX small-cap stock?
Looking at what might impact the ASX small-cap stock in the year ahead, Hipages said it was targeting "continued strong revenue growth" and further margin expansion, delivering positive free cash flow of $4 million to $6 million.
Sharon-Zipser said the upgrades planned for the company's platform features and functionality in FY 2025 were expected to "further increase our market penetration and better reflect the value of our services to tradies and homeowners".
The company's single tradie platform (STP) will continue to be rolled out to new customers over the coming months.
Hipages share price snapshot
With today's big lift in the Hipages share price factored in, the ASX small-cap stock is up 89% year to date.
