I believe Siteminder Ltd (ASX: SDR) shares are an exciting opportunity, and perhaps one of Australia's top shares. It's my excitement in the company's potential that has led me to being a shareholder, and I'm keen to buy more.
Siteminder boasts of being the world's leading hotel commerce platform, with its Siteminder software. The company also offers Little Hotelier, an all-in-one hotel management software that aims to make operations easier for smaller accommodation providers.
Impressively, it's involved in 140 million reservations worth more than A$85 billion in revenue for its hotel customers each year.
I think it could be an excellent buy for the long term for a couple of key reasons.
Image source: Getty Images
Compounding revenue
Siteminder is one of the fast-growing companies on the ASX, with its revenue growing at an impressive pace each year.
Revenue growth is one of the best drivers of a business to become larger and generate stronger profits.
Siteminder has worked hard to build its position globally. Combined with new software offerings, its revenue is performing strongly.
The FY26 result, reported in August, highlighted a number of great drivers of the company's financials. During the year, Siteminder's net property additions tolled 5,900, bringing the total property count to 56,000.
On top of that, the average revenue per user (ARPU) grew by 5.9% to $429. It benefited from an increase in smart platform adoption and deeper product penetration across the customer base.
Its smart platform modules enable subscribers to make it easier to sell their rooms to guests, as well analytics on what price to sell rooms (including the option for AI to change the room prices itself). Dynamic revenue plus adoption accelerated, more than doubling the number of hotel rooms supported half-over-half to more than 50,000.
In the 12 months to 30 June 2026, overall revenue grew 18.6% to $266.1 million. That type of growth rate makes me classify the business as one of Australia's top shares.
Siteminder said that annual recurring revenue (ARR) is expected to grow at a compound annual growth rate (CAGR) in the 20% range between FY26 and FY30. If the company can achieve that growth rate, I think it's on track to deliver market-beating performance.
Strong profit growth
The business is not just improving its top-line, but profitability is also significantly going in the right direction.
Software is the type of industry that can have strong gross profit margins, meaning that new revenue can significantly grow its earnings because costs don't necessarily rise at the same speed.
Rising margins is one of the main things I like to see from one of Australia's top shares.
In the FY26 period, its adjusted group gross profit margin increased 84 basis points to 67.2%, thanks to operating leverage, AI-driven efficiencies, and smart platform contributions.
FY26 also saw adjusted EBITDA (operating profit) soar 96.5% to $28.1 million and adjusted free cash flow jumped 123% to $10.5 million. If those metrics keep rising, then the outlook for profit growth is very positive.
According to the projection on CMC Invest, the business is valued at 34 times FY28's estimated earnings. If it does compound its ARR at least 20% to 2030, I think the company could be very undervalued and it may be one of Australia's top shares to buy today.
