I've had a look at a couple of the companies which the broker has flagged as having high potential for solid share price gains.

Let's have a look at what they're saying.

Readytech Holdings Ltd (ASX: RDY)

This company provides cloud-based software-as-a-service products to the education, workforce, government and justice sectors.

The $170 million company posted first half revenues of $61.6 million, up 5.6%, with 84% of this coming in the form of subscription revenues.

Shaw and Partners said in their research note that Chief Executive Officer Marc Washbourne provided a "confident" update at the TechRise conference.

They added:

Management reaffirmed FY26 guidance, noting improving H2 pipeline conversion, stabilising churn and growing confidence margins have bottomed out. Incrementally, management became more explicit around portfolio rationalisation, while also positioning AI-driven engineering productivity and Orqestra's orchestration layer as potential step change enablers of faster development, lower costs and structurally improved margins over time.

Orqestra is an AI product which customers can use to, "access trusted insights through natural language prompts within their existing workflows, reducing reliance on traditional reporting and enhancing decision velocity" according to Readytech.

Shaw and Partners has a buy recommendation on Readytech shares and a $2.80 price target, compared with $1.34 currently.

Readytech shares have traded as high as $2.80 over the past 12 months.

Kinatico Ltd (ASX: KYP)

Kinatico shares are trading towards the lower end of their range over the past 12 months, but if the Shaw and Partners team are on the money, this is a buying opportunity.

The company provides software which businesses use to stay compliant across workforce management, and is also a software-as-a-service provider.

A key point from the company's TechRise presentation, Shaw said, was that the business had done the hard work building their platform, and could now reap the benefits.

As they said:

Commentary … reinforced the significant operating leverage potential of the platform, with management stating the business could 'double revenue and not change operating headcount,' while pushing back on 'SaaSpocalypse' concerns by positioning AI as a structural benefit underpinned by KYP's trusted compliance data and AI native architecture. AI-driven productivity gains are increasingly framed as a medium-term "step change" opportunity rather than theoretical upside

Shaw and Partners has a price target on Kinatico shares of 38 cents compared with 16 cents currently.

Kinatico is valued at $72.2 million.

The post These 2 ASX technology stocks could jump more than 100%: Expert appeared first on The Motley Fool Australia.

Fresh analysis from Bell Potter has identified two ASX small-cap stocks that have plenty of potential in 2026. 

Let's see what is behind the optimism. 

Black Pearl Group Ltd (ASX: BPG)

Blackpearl Group is a data technology platform that develops and operates a lead prospecting and marketing product suite via its proprietary Pearl Engine platform and augmented large language model developed by BPG in 2022. 

The company transforms anonymous, unstructured web visits and data layers into identifiable prospects to significantly increase efficacy for SME ad/marketing spend by targeting prospects with a high intent to buy. 

The company was only first listed on the ASX late last year.

It jumped 5% yesterday, however it is down roughly 20% since its initial listing and is currently trading for 68 cents.

Bell Potter is bullish this small-cap stock can rise. 

In a report yesterday, the broker said Black Pearl Group is set to release its 4Q26 update next week on Tuesday. 

We forecast +22% QoQ/+103% YoY growth in exit ARR to $25.3m, which would represent +$1.6m QoQ and +$12.8m growth YoY.

Bell Potter has retained its speculative buy recommendation, but reduced its price target to $1.76 (previously $1.91). 

From yesterday's closing price, the updated target still indicates a potential upside of 160%. 

Kinatico Ltd (ASX: KYP)

The second small-cap stock drawing a positive recommendation is Kinatico. 

It is a technology company that helps employers manage their workforce and meet regulatory compliance needs. It operates an online screening and verification service. 

It has been under heavy selling pressure this year, falling almost 58%. 

This includes a 10% drop yesterday. 

Recently, the company provided a Q3 update. 

Bell Potter said SaaS revenue increased by 28% year-on-year and 5% quarter-on-quarter to $5.2 million, in line with expectations. 

Total revenue rose 5% year-on-year but declined 1% quarter-on-quarter to $8.5 million, slightly below the Bell Potter forecast of $8.9 million. 

EBITDA came in at $1.3 million, also marginally below the BPe estimate of $1.4 million.

We have downgraded our revenue forecasts by b/w 3-4% in each of FY26, FY27 and FY28 due predominantly to the current macro environment and the impact this is having on hiring (which impacts the legacy business) and sales cycles (which impacts the SaaS business).

Based on this guidance, Bell Potter has reduced its 12 month price target to 36 cents (previously 38 cents). 

However, from yesterday's closing price, this still indicates an upside potential of 166%. 

The post 2 ASX small-cap stocks tipped to double in the next year appeared first on The Motley Fool Australia.

That's because analysts at Bell Potter have named it as a buy and are tipping huge returns over the next 12 months.

Which small-cap ASX share?

The small cap that Bell Potter is bullish on is Kinatico Ltd (ASX: KYP).

It is a leading provider of know your people solutions to organisations in Australia and New Zealand.

Bell Potter is expecting the small-cap ASX share to release a quarterly update next week.

The good news is that it believes the update will be positive and reveal double-digit revenue growth. However, it thinks the next quarter will be the one that shines. It said:

We expect Kinatico to provide a Q3 update – or Flash – sometime next week and our key forecasts are total revenue up 10% y-o-y to $8.9m and SaaS revenue up 29% yo-y to $5.2m (note this implies SaaS revenue is 58% of total revenue which is consistent with Q2). It is unclear if the company will provide EBITDA for Q3 or not but we forecast $1.4m. Note we do not expect Q3 to be a particularly strong quarter for either total or SaaS revenue and, for instance, we only forecast q-o-q growth of 4% and 6% for each respectively.

We have also not changed or updated our forecasts since the H1 result in February for recent events (e.g. the war in Iran) and there may be some downside risk in our total revenue forecast for Q3 due to some potential weakness in the legacy business CVCheck. We remain optimistic, however, that Q4 will be strong driven by a large uplift in SaaS revenue as some of the current pilots and trials for Kinatico Compliance (KC) with enterprise clients convert into contracts.

Big potential returns

According to the note, Bell Potter has retained its buy rating on the small-cap ASX share with a trimmed price target of 38 cents (from 40 cents).

Based on its current share price of 15 cents, this implies potential upside greater than 100% over the next 12 months.

Commenting on its buy recommendation, Bell Potter said:

We have lowered the multiple we apply in the EV/EBITDA valuation from 10x to 8x due to the continued weakness/sell-off in technology stocks. We have not, however, changed the 10.6% WACC we apply in the DCF given we already consider this reasonably high.

We note that, post this change in the EV/EBITDA, there is now a large difference between the two valuations – $0.20 and $0.57 – and the market is clearly not believing or factoring in any of the earnings and/or cash flow growth we forecast over the short to medium term. The net result is a 5% decrease in our target price to $0.38 which is >100% premium to the share price and we retain our BUY recommendation. We also note Kinatico is in a good financial position with c.$10m cash and no debt.

The post Why this small-cap ASX share could double in value appeared first on The Motley Fool Australia.

Since the start of the year, the small-cap ASX share has dropped approximately 40%.

Whilst this is disappointing, Bell Potter believes the weakness has created an attractive entry point.

What is the broker saying about this small-cap ASX share?

Bell Potter notes that the Know Your People solutions provider has released its half-year results and reported first-half EBITDA of $2.7 million. This was below Bell Potter's forecast but broadly in line with market expectations. The broker said:

1HFY26 EBITDA of $2.7m was 10% below our forecast of $3.0m but consistent with VA consensus. Key driver of the miss versus our forecast was lower capitalised R&D than forecast ($1.7m vs BPe $2.0m). Revenue of $17.6m and cash of $10.4m had already been flagged. There was no interim dividend and we did not expect any.

Importantly, software-as-a-service (SaaS) revenue continued to grow strongly, rising 49% year on year to $9.7 million and is now accounting for 53% of total revenue. Bell Potter also highlights that the company generated positive free cash flow of $0.7 million and remains debt free.

'Disrupting, not being disrupted'

Bell Potter's note is titled Disrupting, not being disrupted, reflecting its view that Kinatico is well positioned in the evolving AI landscape. The broker highlighted:

Kinatico does not provide guidance but did say it expects: A re-acceleration of SaaS revenue growth as the sales pipeline for the new Kinatico Compliance product grows and converts; Continued improvement in operating margins; Positive operating cash flow being maintained; and Ongoing investment in platform development to support long-term growth. The company also highlighted that its early adoption of AI makes it an AI disruptor and its competitive position is protected by multiple reinforcing layers including having AI at the core of its new Kinatico Compliance (KC) product.

Shares tipped to double

According to the note, the broker has retained its buy rating on the small-cap ASX share with a trimmed price target of 40 cents (from 45 cents).

Based on its current share price of 19 cents, this implies potential upside of 110% for investors over the next 12 months.

Commenting on its buy recommendation, Bell Potter said:

We have rolled forward our EV/EBITDA valuation by a year – so that FY27 is now the base – and apply a 10x multiple to our forecast. We have also increased the WACC we apply in the DCF from 10.3% to 10.6% due to an increase in the risk-free rate from 4.25% to 4.5%. The net result is an 11% decrease in our target price to $0.40 which is still around double the share price so we maintain our BUY recommendation.

Potential catalysts include the Q3 update in April where we expect further q-o-q growth in SaaS revenue but the key catalyst is more likely to be the Q4 update where we expect more significant growth driven by the successful conversion of some large customers to the new KC platform.

The post Bell Potter says this exciting small-cap ASX share can rise 100%+ appeared first on The Motley Fool Australia.

It has named three small-cap ASX shares that could be top picks for investors in February. Here's what it is recommending to clients:

Integral Diagnostics Ltd (ASX: IDX)

This diagnostic imaging company is highly rated by Bell Potter, especially after its merger with Capitol Health. The broker sees plenty of growth opportunities from greenfield and brownfield investments, as well as M&A opportunities. It said:

The merger between Integral Diagnostics and Capitol Health results in a diagnostic imaging (DI) company which operates 151 clinics throughout Australia. Its strongest presence will be within Victoria and Queensland (67 & 41 locations respectively) with minor penetration in the other States. The company offers a range of imaging modalities through its clinics with the largest contribution to revenue from CT (31%) followed by US (24%), MRI (13%) and X-Ray / Diagnostic Radiology (11%), and Nuclear Medicine PET (5%). The growth strategy has centred around a combination of greenfield & brownfield investments and M&A opportunities.

Kinatico Ltd (ASX: KYP)

Another small-cap ASX share that has been recommended as a buy by Bell Potter is technology company Kinatico. It provides CV checks and workforce compliance management solutions.

The broker is positive on the company's growth outlook. It said:

Kinatico is a leading provider of "know your people" solutions to organisations in Australia and New Zealand. The company operates two key businesses: its legacy CVCheck brand, which provides employment screening and verification services to over 10,000 repeat corporate customers and its new key focus, a SaaS-based business that delivers real-time workforce compliance management and monitoring. The core strategy is to leverage the large customer base of the legacy CVCheck business to provide a ready-made sales pipeline for its higher growth SaaS compliance solutions.

Universal Store Holdings Ltd (ASX: UNI)

A third small-cap ASX share that is being recommended by Bell Potter is youth fashion retailer Universal Store.

The broker highlights Universal Store's strong growth outlook, which is being underpinned by its store rollout strategy, and cheap valuation as reasons to buy. It said:

Universal Store Holdings is a leading youth focused apparel, footwear and accessories retailer in Australia. UNI will continue to increase store numbers over the next few years, supporting earnings growth of 10% p.a.. Valuation looks attractive, trading on a forward P/E of ~16x. UNI is a quality small cap (ROE ~26%) that is executing on its rollout strategy.

The post 3 super small-cap ASX shares that could be destined for big things appeared first on The Motley Fool Australia.

Since the start of 2025, the S&P/ASX Small Ordinaries index has risen by a sizeable 17%.

As a comparison, the widely followed All Ordinaries index is only up by 4.9% since the turn of the year.

With that in mind, if you are wanting to gain exposure to the small side of the market, then it could be worth hearing what Bell Potter is saying about the three small cap ASX shares listed below.

Here's why it thinks they are among the best to buy for 2026:

Integral Diagnostics Ltd (ASX: IDX)

This diagnostic imaging company could be a top pick small cap investors according to Bell Potter.

It likes the company due to its merger with Capitol Health, which has boosted its network to 151 clinics. It also sees opportunities to continue its growth through greenfield and brownfield investments, as well as mergers and acquisitions (M&A). It said:

The merger between Integral Diagnostics and Capitol Health results in a diagnostic imaging (DI) company which operates 151 clinics throughout Australia. Its strongest presence will be within Victoria and Queensland (67 & 41 locations respectively) with minor penetration in the other States. The company offers a range of imaging modalities through its clinics with the largest contribution to revenue from CT (31%) followed by US (24%), MRI (13%) and X-Ray / Diagnostic Radiology (11%), and Nuclear Medicine PET (5%). The growth strategy has centred around a combination of greenfield & brownfield investments and M&A opportunities.

Kinatico Ltd (ASX: KYP)

Another small cap ASX share that Bell Potter is bullish on is know your people solutions provider Kinatico.

It sees opportunities for the company to grow strongly through leveraging its large customer base. The broker explains:

Kinatico is a leading provider of "know your people" solutions to organisations in Australia and New Zealand. The company operates two key businesses: its legacy CVCheck brand, which provides employment screening and verification services to over 10,000 repeat corporate customers and its new key focus, a SaaS-based business that delivers real-time workforce compliance management and monitoring. The core strategy is to leverage the large customer base of the legacy CVCheck business to provide a ready-made sales pipeline for its higher growth SaaS compliance solutions.

Praemium Ltd (ASX: PPS)

This investment platform provider is a third small cap ASX share that has been given the thumbs up from Bell Potter.

It has been pleased with the company's performance in recent times and feels that the market is not appreciating this. The broker highlights that at 20x forward earnings, its shares are significantly cheaper than its larger rivals. It said:

While Praemium has demonstrated commercial momentum, strong growth capacity, and a leading technology offering, its valuation continues to lag key peers. This stock looks very attractive at a 12MF PE of ~20x, and we expect the market to catch on as the company executes on further market share gains and FUA growth.

The post 3 of the best Australian small cap shares to buy for 2026 appeared first on The Motley Fool Australia.

That's because the broker has just released its latest top Australian picks from the smaller size of the market.

These are its panel of favoured small cap Australian equities that it believes offer attractive returns over the long term.

Three that make the list in August are named below. Here's why it is bullish on them:

DroneShield Ltd (ASX: DRO)

This counterdrone technology company is on the broker's panel again this month.

It believes the ASX share is well-positioned for growth thanks to increasing demand for its technology from military customers. Commenting on the high-flying stock, the broker said:

DroneShield is an Australian defence manufacturer specialising in counterdrone technology. DRO provides an end-to-end counter-drone solution that integrates proprietary artificial intelligence software with a suite of hardware products utilised to detect, identify and defeat aerial, ground and maritime threats. The company's products are largely in-house technology and include handheld, vehicular and fixed installations. DRO's customers primarily include military and intelligence, as well as law enforcement, critical infrastructure and commercial parties globally.

Kinatico Ltd (ASX: KYP)

A new addition to the broker's panel this month is Kinatico.

Bell Potter likes the workforce compliance management company due to its transition into a high growth software as a service (SaaS) company. It explains:

We are adding Kinatico (KYP) to our small-cap panel based on its transition from a legacy screening business into a high-growth, SaaS-based company focused on workforce compliance management. The upside lies in KYP's ability to leverage its existing CVCheck business, which has over 10,000 repeat corporate customers to upsell its higher-margin SaaS solutions. As the revenue mix shifts towards the SaaS platform, we expect to see margin improvement and a potential valuation re-rating, offering upside from a small number of customer conversions. This growth is supported by a strong, debt-free balance sheet.

Universal Store Holdings Ltd (ASX: UNI)

The final ASX share that gets the thumbs up from Bell Potter is Universal Store. It is a leading youth fashion retailer that is growing its footprint at a fair pace through its rollout strategy.

Given its positive growth outlook, the broker feels that its shares are being undervalued by the market. It said:

Universal Store Holdings is a leading youth focused apparel, footwear and accessories retailer in Australia. UNI will continue to increase store numbers over the next few years, supporting earnings growth of 14% p.a. over (FY25-27). Valuation looks attractive, trading on a forward P/E of ~15.5x. UNI is a quality small cap (ROE ~26%) that is executing on its rollout strategy.

The post Bell Potter names the best ASX shares to buy in August appeared first on The Motley Fool Australia.

The unemployment rate is hovering around 4%, its lowest point in more than 10 years, and if it reaches below 3%, we could be heading for the lowest levels of unemployment on record.

Australian wages have grown over the past 10-plus years, outpacing the increase in Australian labour costs and the producer price index in that time (as shown below).

But now, with the labour force heading towards full capacity, how will this impact company earnings moving forward? And how can investors navigate the predicted 'jobs boom'? Let's take a look at two potential winners below.

Xref Limited (ASX: XF1)

Having peaked at 52-week highs of 80 cents in January, shares in software-as-a-service player Xref have since corrected to trade at 59 cents apiece.

Xref claims to automate the employment reference checking process, offering a 24-hour turnaround service. According to the author of the Switzer Report, Tony Featherstone, Xref could be a buy for those investors with a longer-term horizon in mind.

"In a January trading update, Xref said sales of $10 million in the first half of FY22 were up 96% on the same period a year earlier," he said.

"That is a good result: the first half of the financial year is usually the weakest for Xref due to financial year-end."

Featherstone notes that Xreft could be one for the long-term.

"My interest is longer-term. I like Xref's technology, platform and business model. It's a globally scalable model that solves an obvious problem for customers," Feathorstone noted.

"The challenge is attracting companies and cross-selling other products so that the platform has higher margins and more 'touchpoints' with customers who find it harder to leave."

CV Check Limited (ASX: CV1)

Another potential 'jobs boom' play, according to Featherstone, is CV Check, the provider of pre-employment screening services for individuals and companies.

The company has expertise in providing a 12-24 hour turnaround on police checks. It recognised  $6.5 million in revenue for the second quarter of FY22 – a gain of 83% on the same period last year.

"Like Xref, CV Check has rising revenue growth, off a low base," Featherstone remarked. "Its products are well placed for this market and it has a reasonably large retail and SME [small to medium enterprise] customer base for its size."

According to Featherstone, the jobs market might be under-appreciating how valuable CV Check's offering is, especially given the digitising of onboarding processes.

"I doubt enough job candidates realise how technology algorithms are cross-checking their CV against published data – and the risks of providing false job information," he added.

However, CV Check has underperformed the market substantially in the last 12 months. It is down 26% this year to date, well behind the major indices.

It is now trading at 11.5 cents per share at the time of writing, having collapsed another 4% during last week's trading.

As for his favourite, Featherstone is crystal clear on which of the two companyies he prefers.

"Of the two stocks, I prefer Xref," he said. "I like emerging software-as-a-service companies that demonstrate they can rapidly scale their opportunity by adding more products and services for global markets."

"It's early days, but Xref is making good progress."

Featherstone believes CV Check hasn't done enough since listing. "Recent signs are promising…[b]ut if resume and reference checkers can't do well in this jobs market, they never will," he added.

The post Expert reveals 2 small-cap ASX shares for the jobs boom appeared first on The Motley Fool Australia.

At the time of writing, the online integrated screening and verification company's shares are up 6.90% to 15.5 cents.

How is CV Check performing in FY22?

Investors are sending the CV Check share price higher after the company reported robust numbers for the FY22 period.

According to its release, CV Check advised it has achieved revenue of $6.5 million for the December quarter (Q2 FY22). This represents an 83% increase on the prior corresponding period ($3.5 million).

When factoring in Q1 FY22 revenue, CV Check has generated total revenue of $12.8 million for the first-half of FY22. Again, this is a significant rise of 84% when compared against the first-half of FY21.

Furthermore, consolidated revenue included $1.2 million in Software-as-a-Service (SaaS) revenue in the form of licence and consulting fees.

During the first-half, the company focused on completing the integration of Bright People Technology, which it bought for $1 million.

CV Check noted that its cash flow from operations was positive, and it is well-positioned for a bumper second-half. This is regardless of the repeated lockdowns and economic uncertainty that COVID-19 has caused.

At the end of the 2021 calendar year, CV Check recorded a closing cash balance of $12.2 million.

CV Check CEO, Michael Ivanchenko, said:

The completion of the integration of Bright People Technologies and the commencement of execution of the company CGI (Consolidate the base, Grow new markets and Innovate) strategy is showing results.

We continue to see strong growth in the pre-employment screening market through our returning business customers utilising more of our screening services including our Covid Vaccination checks.

We are experiencing unprecedented interest in our SaaS real-time compliance monitoring product, Cited, and progress continues on key innovations which we look forward to announcing soon.

About the CV Check share price

Despite today's ascent, the CV Check share price has moved in circles throughout the last 12 months. Its shares have posted a loss of around 17% over the period, with year-to-date currently down 6%.

CV Check has a market capitalisation of roughly $63 million, with approximately 434.54 million shares on its books.

The post CV Check (ASX:CV1) share price leaps 7% as revenue surges appeared first on The Motley Fool Australia.

The online integrated screening and verification company announced a sound second-quarter trading update which has excited investors.

At the time of writing, the online integrated screening and verification company's shares are up 15.39% to 15 cents.

CV Check achieves positive cash flow

The CV Check share price is on the move today after the company outlined robust performance for the start of Q2 FY22.

According to its release, CV Check reported growth in employment demand across both Australia and New Zealand. This led the company to record $2 million in revenue for October, up 81% on the prior corresponding period. Cash receipts for the month totalled $2.3 million, reflecting a 99% increase from this time last year.

CV Check also became cash flow positive for October, generating $0.4 million. The closing cash balance for the end of the month stood at $12.6 million.

In addition, the company revealed that favourable tailwinds are indicating that November is on track to beat last month's result.

CV Check CEO Michael Ivanchenko commented on the company's solid performance:

With strong recent employment demand across the region, CV1 has seen a corresponding uptick in order flows, further validating our strategy of pursuing a B2B focus. CV1's innovations, such as our Covid-vaccine status check, continue to gain traction with a market needing certainty and reliability as it grows.

We are confident that as the full benefits of our workforce compliance monitoring and management software, Cited, are brought to the market, CV1 will be able to accelerate further growth through the balance of FY22.

CV Check share price snapshot

The CV Check share price is down 9% in the past 12 months and is hovering almost 20% lower year-to-date.

Based on valuation grounds, CV Check has a market capitalisation of around $64.95 million, with approximately 433.02 million shares outstanding.

The post CV Check (ASX:CV1) share price leaps 15% on strong trading update appeared first on The Motley Fool Australia.

At the time of writing, the online integrated screening and verification company's shares are up 15.15% to 19 cents.

How did CV Check perform in Q1 FY22?

Investors are sending the CV Check share price higher after the company reported robust numbers for the 3-month period.

According to its release, CV Check achieved record revenue of $6.3 million, up 85.4% on this time last year. The successful shift into a B2B focused strategy underpinned the strong result. This is despite a slowing market under repeated and extended lockdowns in Australia's most populous states.

Consolidated revenue included $0.6 million in software-as-a-service (SaaS) revenue in the form of licence and consulting fees, representing 9.4% of total revenue.

CV Check CEO Michael Ivanchenko said:

This is yet another great result from the strong core business. Work is progressing well on consolidating technology features to reduce cost to serve and open opportunities to improve quality revenue. I look forward to sharing plans for product development and feature enhancement in coming months.

In addition to the business update, CV Check announced the appointment of Jason Margach as its chief financial and operating officer (CFOO).

The position came into effect on 1 October and sees Margach head up the company's finance team.

Margach has extensive experience in finance and operations both in Australia and overseas. He holds a Bachelor of Accounting Sciences, completed Commercial Articles with Price Waterhouse Coopers, and has a Master of Business Administration.

Margach has been with the CV Check executive team since the beginning of February 2020.

About the CV Check share price

It's been a mixed bag performance for the CV Check share price, moving in circles throughout the past 12 months. Its shares have posted a gain of 26% over the first quarter of FY22 but are flat year-to-date.

CV Check has a market capitalisation of roughly $81.5 million, with approximately 429.4 million shares on its books.

The post CV Check (ASX:CV1) share price soars 15% on record revenues appeared first on The Motley Fool Australia.

Right now, the CV Check share price is 17 cents, 3.03% higher than its previous close.

CV Check share price gains on $17.4 million revenue

Here's how the credential verification platform provider performed through FY21:

• $17.4 million in revenue, 41% more than FY20's revenue
• A comprehensive $926,616 loss, an improvement on the prior period's $1.3 million loss

CV Check's loss included the $733,082 it spent to acquire Bright People Technologies' parent company.

Over FY21, the CV Check platform brought in $16 million of revenue, representing a 30% year-on-year growth rate. Additionally, the platform's annual recurring revenue grew by 39% to $13.2 million. 

In the only quarter in which Bright People Technologies was part of the company, its platforms generated $1.4 million in revenue. Of that, $573,255 was software-as-a-service (SaaS) revenue. 

CV Check ended the year with a cash balance of $12.9 million.

What happened in FY21 for CV Check?

The financial year just been was a big one for CV Check and its share price.

The company agreed to purchase CI6, an entity that owns 100% of Bright People Technologies, in February. 

Bright People Technologies is a SaaS provider of workforce credentials and compliance software. The business has a small number of blue-chip clients, including BHP Group Ltd (ASX: BHP), Woodside Energy, and Cash Converters International Ltd (ASX: CCV).

CV Check completed a $10.5 million share placement to fund the acquisition. 

CV Check undertook work to develop and commence the rollout of automated verification processes in FY21. The company also focused on enhancing its security defences and protocols.

The Bright People Technologies acquisition was completed in the final quarter of FY21. The company has since integrated Bright People's technical team into its own. 

What did management say?

CV Check's chair Ivan Gustavino commented on the results driving the company's share price today, saying:

I am proud to say that, emerging from an extremely challenging year in good shape, CV Check delivered solid achievements and is uniquely placed to build on its success. FY2021 was an immensely challenging year: The continued disruptive effects of the COVID-19 pandemic and government response measures presented challenges internally (in managing the effects on our own workforce) and externally (causing uncertainty in our markets). Those disruptive effects have not abated, and look set to continue into the current financial year. 

In the midst of that disruption, the company took on its own challenges as it embraced change — completing the acquisition of the business of Bright People Technologies Pty Ltd, embarking on an integration of the two businesses, merging its management structures, beginning a process of consolidating its technology platforms, and setting itself to become an international Reg Tech company…

Notwithstanding the width of the challenge thrown to it, the company has delivered on the goals set by the board: growing revenue and [annual recurring revenue] from the core CV Check platform business; maintaining transaction and SaaS revenue from the newly acquired BPT platforms; completing the first phases of the planned integration of the businesses; and planning for the medium to long-term consolidation of the technology stacks. 

What's next for CV Check?

CV Check outlined a number of happenings those interested in its share price might want to watch out for.

The company's key objective for FY22 is to introduce some of the CV Check platform's thousands of corporate clients to the Bright People platform. It expects this will help grow its SaaS revenue.

Additionally, CV Check is on track to roll out enhanced monitored compliance features on Bright People's platforms.

It also outlined some macro drivers that have boosted its performance so far. First is the shift to a digitally delivered service-based economy. The second is COVID-19, which has highlighted the need for companies to provide their services remotely.

CV Check share price snapshot

The CV Check share price has slipped 10% since the start of 2021. However, it is 88% higher than it was this time last year.

The post CV Check (ASX: CV1) share price gains on FY21 earnings appeared first on The Motley Fool Australia.

At the time of writing, the online integrated screening and verification company's shares are up 9.68% to 17 cents.

Let's take a closer look and see how the company performed for the 3 months.

CV Check delivers record growth

Investors appear excited by the company's latest trading update, sending CV Check shares to a 5-month high.

For the quarter ending 30 June, CV Check achieved group record revenue of $6.4 million, a 262% increase on the prior corresponding period. The strong result was driven by growth in the Australian and New Zealand economy as well as the acquisition of the Bright People Technologies (BPT) business.

Net cash from operating activities during Q4 FY21 came to $585,000, adding to its FY21 total of $1.5 million.

CV Check declared a healthy cash bank balance of $12.9 million with no external financing. During April, $1.3 million was paid to clear BPT's outstanding debt.

Annual Recurring Revenue (ARR) stood at $13.3 million, compared to $11.1 million at the end of March 2021. This reflects a growth of 19.8% and a record for 12-month booked ARR.

The CV Check platform delivered $5 million in revenue for Q4 FY21, up 104% from this time last year ($2.4 million). B2B integrations with HR information systems and applicant tracking systems contributed $0.7 million. Notably, this represents a massive 420% gain over the prior comparable period.

In addition, the company won new customers during the quarter with several booking their first orders. They included Rheinmetall Defence Australia, Think Childcare, Water NSW, Whitehaven Coal, Winning Appliances Group, among other brands.

What did management say?

CV Check executive chair, Ivan Gustavino commented on the result, saying:

As expected, the quarter under review was a significant period of consolidation for CV1 after the acquisition of BPT. That the business was still able to deliver record revenues for a quarter and for booked 12-month ARR speaks volumes of the calibre of the team. Across both sides of the business, all channels performed strongly: direct sales revenue, revenues booked through integration partners and revenue from the international wholesale sales channel.

CV Check share price summary

It has been a whirlwind 12 months for CV Check shareholders. The company's shares reached as high as 21 cents in February and then fell to 12 cents a few months after. The CV Check share price is up almost 90% in the past year but is down 10% in 2021.

Based on today's price, CV Check presides a market capitalisation of roughly $72.9 million and has 428 million shares outstanding.

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In afternoon trade, the screening and verification services provider's shares are down 7% to 13 cents.

This is actually a big improvement from earlier in the day. During morning trade the CV Check share price was down as much as 18% to 11.5 cents.

Why is the CV Check share price crashing lower?

Investors have been selling CV Check shares on Monday after the release of a surprise announcement this morning relating to its leadership.

According to the release, the company's CEO and Executive Director, Rod Sherwood, has announced his resignation for personal reasons and has immediately stood down from regular duties.

However, Mr Sherwood will remain available to assist CV Check through the transition period, if necessary.

In the meantime, the company's Independent Chair, Mr Ivan Gustavino, will be acting as Executive Chair whilst the company undertakes a widespread search for a CEO to take it on the next stage of its journey.

What now?

Mr Sherwood believes that the company is in ideal shape and primed for growth, making now an opportune time to step away.

He said: "I am immensely proud to have led The Company over the past four and a half years. Having just completed the Bright transaction, the Company is now in ideal shape, with record revenues, primed for growth with exciting new opportunities available and $14.8m in cash as at the end of March."

"The next few months will offer the CV1 group a time for an inward focus as the CVCheck and Bright businesses get to know each other and successfully integrate and align. This is a time for change and renewal, which affords the ideal opportunity for me to step away from the business and allow CV1 group time to search for a new CEO who will lead it into the promising future I know lies ahead. I will, of course, be available to assist the Company through the transition, if required."

Mr Gustavino spoke positively about the outgoing CEO's tenure and the company's outlook.

He said: "Rod has served The Company for almost 10 years, putting a great deal of energy and effort into steering the Company to an ideal position for future growth. He departs with the great thanks and best wishes of all in the Company. The board is confident it has the management structure and organisational resilience to continue our record of organic growth whilst the Board recruits a new CEO."

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Let's take a look at what CV Check provided investors with late Monday evening.

Best sales on record

The CV Check share price could be on the move today after the company advised it delivered a robust performance for the March quarter.

According to its release, CV Check reported strong trading conditions throughout February. This resulted in the company achieving a new all-time sales record for the month, and the 12-month booked annual recurring revenue (ARR).

The strong sales growth came from new customer wins, as well as high-order volumes driven by its established customer base.

CV Check noted that sales are continuing to run into March – the final month of Q3 FY21.

In addition, the company highlighted that the Bright People Technologies acquisition is on track. Settlement is expected to occur sometime in early April.

CV Check CEO Rod Sherwood commented on the company's solid performance:

A very strong couple of months have kicked off the calendar year. A strong January was followed by new all-time revenue records being set in February for both a single month of sales and the booked 12-month ARR. Growth is being driven by both new customer wins and high order flow from long standing customers who are active in bringing on new hires and re-compliance screening. March sales volume as experienced to date continues to be very strong.

CV Check share price snapshot

The CV Check share price has gained over 100% in the past 12 months, but lost over 20% year to date. The company's shares reached a 52-week high of 21 cents in February when news of the acquisition came to light.

Based on valuation grounds, CV Check has a market capitalisation of around $51.5 million, with 355.2 million shares on issue.

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The leading online integrated screening and verification company's shares jumped 20% to a record high of 21 cents.

This means the CV Check share price is now up 75% over the last 12 months.

Why is the CV Check share price zooming higher?

Investors have been buying CV Check shares on Wednesday following the announcement of an acquisition.

According to the release, the company has entered into a binding share purchase agreement with the shareholders of CI6 to acquire 100% of the entity that owns Bright People Technologies and associated group entities.

Bright People Technologies is a software-as-a-service (SaaS) cloud-based provider of workforce credentials and compliance software through the Enable and Cited brands.

Its software allows operators and contractors to run workforce compliance end-to-end. This includes identity and verification, onboarding and induction, deployment and re-deployment, and ongoing compliance monitoring and management.

Bright People Technologies generated revenue of $4.9 million and EBITDA of $1.7 million in FY 2020. It counts the likes of BHP Group Ltd (ASX: BHP) and Woodside Petroleum Limited (ASX: WPL) as customers.

Management believes the combination of CV Check and Bright will create a credentials-based workforce management capability built on Bright's workforce compliance strength and the CV Check platform's highly automated verification workflows and HRIS integrations.

What are the terms?

The two parties have agreed a fee of $15.3 million. This comprises $12 million in CV Check shares (held in escrow until 31 December 2022) and $3.25 million to pay Bright People Technologies' net debt.

Bright's Chairman and largest shareholder, Jon Birman, will be appointed to the CV Check board as a Non-Executive Director. Fellow Executives, Petra Nelson and Declan Hoare, will join the CV Check Executive Management Team.

To fund part of the deal, the company has successfully completed a $10.5 million placement at an issue price of $0.165 per new share. This was a 5.7% discount to the last close price for CV Check shares.

The placement was well supported by new and existing institutional investors. This includes CV Check's largest institutional investor, Australian Ethical Investment Limited (ASX: AEF).

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In early morning trade, the online integrated screening and verification company's shares are unchanged at 17 cents.

How did CV Check perform for Q2 FY21?

According to this morning's release, CV Check advised it booked a robust result over the 3 month term.

For the period ending 31 December, the company reported record revenue of $3.5 million, with $2.7 million coming from B2B, and $800,000 from B2C. The overall sales achieved represented a 12% increase on the prior corresponding period. Underpinned by strong sales during the Christmas period, total website usage and new account sign ups continued to grow.

The surge in quarterly revenue contributed to CV Check reaching new milestone records for its half year and 12 month calendar performance. The company stated H1 FY21 realised $7 million in sales, with $10.2 million in annual recurring revenue (ARR) for the 12 months.

CV Check registered a healthy cash balance of $5.2 million and no external debt for the end of the period.

New notable customers

Complimenting the sound result, CV Check added new customers to its mix over the quarter. These included several large well-known brands such as AECOM (NYSE: ACM), Korn Ferry (NYSE: KFY), Netforce Global LLC, Pfizer (NYSE: PFE), Woolworths Group Ltd (ASX: WOW), and others.

Platform integration rises strongly

CV Check revealed that its platform integration strategy is tracking along nicely. Revenue booked through this channel jumped 87% when comparing to this time last year. The recent successful integration with TechnologyOne Ltd (ASX: TNE) is slated for customer launch sometime in the current quarter.

The company highlighted that assimilating with providers of other HR information and applicant tracking systems will expand its addressable market.

Management commentary

CV1 CEO, Mr Rod Sherwood, welcomed the positive results, saying:

CV1 revenues surged in Q2 to set all-time company records for a quarter, for a half-year and for the booked 12 month ARR. All channels performed strongly: direct sales, revenues booked through integration partners and the nascent international white label channel where our first marquee client Netforce Global LLC already features among our group wide top 30 customers for the quarter.

Looking forward, there are promising signs in both internal and external backdrops. Internally, new client wins have been strong during recent months, resulting in an ongoing pipeline of customer onboarding.

… The external backdrop is also positive with the ANZ job ads series for December coming in stronger than that of February 2020 and consumer purchasing strengthening amid continuing COVID-related government support for the economy and widespread optimism about planned vaccine roll outs domestically and internationally.

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In morning trade the online integrated screening and verification company's shares are up 8.5% to 19 cents.

This latest gain means the CV Check share price is now up 72% over the last six months from 11 cents.

Why is the CV Check share price charging higher?

Investors have been buying the company's shares this morning following the release of its second quarter update.

According to the release, CV Check booked a record $3.5 million of revenue in the second quarter, which was up 12% on the prior corresponding period. The majority of this was from its B2B business, which generated revenue of $2.7 million.

This led to the company delivering record half year revenue of $7 million and over $10.2 million in annualised recurring revenue (ARR). Management advised that this was driven by new client wins coupled with recovering order flow from established customers.

Pleasingly, the company was modestly cash flow positive in the second quarter, leading to it ending the period with a cash balance of $5.2 million and no debt. Some of this was attributable to $0.1 million in COVID-19 assistance early in the second quarter. However, the company does not anticipate further such receipts given the improved trading conditions.

The company's Chief Executive Officer, Rod Sherwood, was very pleased with the second quarter and first half performance.

He commented: "CV1 revenues surged during the second quarter to set all-time company records for a quarter, for a half year and for a booked 12-month ARR figure. We will provide a more comprehensive update on the quarter in coming weeks."

No comments were made on the company's expectations for the second half. This is likely to be provided to investors with the release of its audited first half results in February.

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In early morning trade, shares in the tech company are down 1.2% to 16.5 cents. In comparison, the All Ordinaries Index (ASX: XAO) is also down 0.9% to 6,208 points.

Let's see how CV Check tracked for the start of FY21.

How did CV Check perform for Q1 FY21?

For the period ending 30 September, CV Check reported a solid first quarter scorecard backed by the strengthening momentum post-COVID-19.

Revenue from its B2B and B2C segments recorded $2.6 million and $0.8 million, respectively. This totalled $3.4 million in booked revenue which represented a 1% decline on the prior corresponding period (pcp). The result was derived from new client wins coupled with an improved order flow from established customers, previously affected by COVID-19.

CV Check highlighted that revenue was 40% higher than the prior quarter. This was driven by a record in total website usage and account sign-ups for B2B and B2C in the last 12 months.

Annual recurring revenue rose to $9.9 million, as both the average revenue per account and number of returning customers expanded.

Net cash generation grew to $0.5 million compared with the $0.2 million cash burn in the pcp.

The company closed the quarter with a cash balance of $5.2 million, with no external debt.

Notable customer wins

During the quarter, first orders were received by an array of new customers that signed up with CV Check. The new additions included Amaysim Australia Ltd (ASX: AYS), the Australian Digital Health Agency, Sigma Healthcare Ltd (ASX: SIG), Village Roadshow Ltd (ASX: VRL) and others.

The company noted that these client wins were aided by the range of screening and verification products on offer.

Platform integrations

CV Check's strategy is to deliver growth through platform integrations with providers of human resource information and applicant tracking systems. Last month, the company successfully integrated with RealMe, a digital identity verification entity operated by the New Zealand government.

Revenue within this scope has continued to flourish, with sales reflecting a 156% increase on the pcp.

The number of employee checks per order through integrations also rose which supported business margins.

Management commentary

Commenting on the results, CV Check CEO Rod Sherwood said:

A resurgence of CV1 revenues was experienced during the past quarter with record sales being achieved for the month of September despite renewed shutdowns across New Zealand and Victoria; that trading strength has continued in October.

New client wins were strong throughout the period and a new integration was announced with RealMe, the New Zealand government digital ID platform.

CV1 was also thrilled to announce recently that it had won its first major international customer under its strategic white label initiative, NetForce Global LLC, and then back that up by winning the business of Vero Screening Ltd.

The post Why the CV Check (ASX:CV1) share price is edging lower today appeared first on The Motley Fool Australia.

Despite the broader decline of the All Ordinaries Index (ASX: XAO), the CV Check closed the day at 18 cents, up 5.8%.

Let's take a look at what CV Check updated the market with.

What does CV Check do?

CV Check, founded in 2004, is an online tech company that offers background screening and verification services.

The company conducts over 300,000 verification checks every year for private and government organisations, employers and individuals. These services include national police checks, employment reference checks, credit and financial checks, and predictive psychometric assessments, among other verifications.

International customers 

CV Check advised it had signed a new international customer to its strategic white line label rollout. Employment screening specialist, Vero Screening Ltd, was added to CV Check's international wholesale customers.

Vero is an employment screening company based in Brighton, England. The business specialises in compliance, human resources, digital technology among other services. Vero has over 20 years' experience in industry knowledge and in-house technology to protect clients from risk.

This new addition complements last week's news that the company had signed NetForce Global LLC to its best-of-breed solution.

CV Check sees white labelling as a strategic objective and is focusing on servicing the international market.

Management commentary

Commenting on the new partnership, CV Check CEO Mr Rod Sherwood said:

In its FY2020 Annual Report, CV1 advised pre-commercialisation had commenced on the strategic project to take its white label technology beyond our current Australia and New Zealand base. We are pleased to advise that another major inbound international wholesaler will commence ordering pursuant to this initiative. We welcome Vero as an inbound international wholesale customer.

Vero CEO, Mr Rupert Emson also spoke about the agreement, adding:

We are excited to be partnering with CVCheck. As we are seeing increased demand for our international screening services, the Company's full suite of screening services and advanced technology platform were a perfect match for our requirements. The CVCheck onboarding support team have been fantastic and we look forward to working with them to deliver on our clients' global screening strategies.

The CV Check share price is up more than 28%, year to date, and is just shy of its 52-week high of 19 cents per share. 

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