Siteminder Ltd (ASX: SDR) shares could be one of the best places to invest for the long-term for Australians. When a great business drops more than 20%, I get excited about the more appealing value on offer and the potential to rebound. It's down 27% from late October 2025.
Siteminder offers software under the same name, which it calls the world's leading hotel distribution and revenue platform. It has another software offering called Little Hotelier, an all-in-one hotel management software that "makes the lives of small accommodation providers easier".
It's a truly a global business. While the headquarters are based in Sydney, it has offices in Bangalore, Bangkok, Barcelona, Berlin, Dallas, Galway, London, Manila, and Mexico City.
Impressively, the business generates more than 130 million reservations worth more than A$85 billion in revenue for hotel customers each year.
I believe the business has the potential to generate significantly more revenue in the coming years.
Great organic growth rate
The ASX share is aiming to move beyond the role of a channel manager for hotels and become the central revenue platform – a unified system, instead of various systems, where revenue decisions are made, executed, and can be automated.
It's embedding AI across its proprietary reservations data to give its hoteliers a predictive edge, identifying new revenue opportunities, and forecasting traveller demand before their competitors can. It can help them decide on optimal pricing and execute changes immediately, or Siteminder can optimise pricing and distribute it for the hotel.
Its current annual recurring revenue (ARR) equates to approximately 0.3% of the $85 billion of gross booking value it facilitates. But if customers were to adopt its full suite of smart platform tools, it could capture 1.5% of gross booking value, just by deepening its relationship with existing customers.
The ASX share grew its revenue by 22% in FY25. The company's ARR growth in FY26 is expected to be similar to the FY25 figure, and it's aiming to accelerate its revenue growth towards 30% in the medium term.
There are a lot of hotels that aren't Siteminder customers yet, and this gives the company a long growth runway with both existing and potential future customers in the coming years.
Software operating leverage
As a software business, the company is capable of delivering rising profit margins.
Selling one more software subscription doesn't see the costs change much, so additional revenue is very helpful at boosting earnings.
The company is seeing its underlying gross profit margin increase as the results are revealed every six months, thanks to a larger level of subscription and transaction revenue.
In FY25, the business saw its underlying free cash flow shift from a $35 million outflow to a $4.7 million inflow, which is great progress and suggests earnings could rise significantly in the coming years.
