Hipages Group (HPG) H2 2024 earnings summary

Executive summary

• Achieved strong revenue, EBITDA, and free cash flow growth in FY24, supported by record tradie-homeowner connections and the launch of Hipages Tradiecore, integrating lead and job management into a single app in April 2024.

• Maintained leadership in Australia and New Zealand as the top platform connecting homeowners and tradies.

• FY 2024 marked an inflection point, delivering sustainable growth in revenue, EBITDA, and free cash flow.

• Strategic shift from marketplace to platform, highlighted by the launch of Hipages Tradiecore with positive early engagement.

• Positive free cash flow of $2.1m, a $4.9m improvement from the prior year, with a strong cash balance of $21.3m and no debt.

Financial highlights

• Total revenue increased 13% year-over-year to $75.8m; recurring revenue up 15% to $72.1m; MRR up 13% to $6.4m.

• EBITDA before significant items rose 33% to $16.4m, with margin up four points to 22%.

• Statutory NPAT was $3.6m, reversing a prior loss, aided by the PropTech Labs disposal.

• Free cash flow improved to $2.1m from a $2.8m outflow in FY23.

• ARPU increased 11% to $2,079; subscription tradies up 3% to 36,700.

Outlook and guidance

• Targeting continued strong revenue growth and further EBITDA/margin expansion in FY25.

• Free cash flow guidance for FY25 is $4-6m.

• Net subscription growth expected to remain consistent with FY24, with potential uptick as Tradiecore adoption improves retention.

• Ongoing investment in technology, with tech spend as a percentage of revenue expected to decline by about 1% per annum.

• Ongoing rollout of the single tradie platform and new functionalities to drive pricing, tradie growth, and retention.