Objective (OCL) H2 2024 earnings summary

Executive summary

• Revenue reached AUD 118 million (up 6% year-over-year), with 100% subscription software and 81% recurring revenue; annual recurring revenue (ARR) grew 11% to AUD 105 million.

• EBITDA rose 66% to AUD 44 million, and net profit after tax increased 49% to AUD 31 million.

• SaaS annualised recurring revenue grew 15% year-over-year, reflecting strong demand for cloud solutions.

• Significant R&D investment at 30% of revenue (AUD 28 million), with 43% of all-time R&D spend in the past five years.

• Secured a $3.4 million, 6-year contract with the UK Gambling Commission for Objective RegWorks.

Financial highlights

• Operating cash flow was AUD 56 million, 127% of adjusted EBITDA, with a cash balance of AUD 96 million, up 32% year-over-year.

• Dividend increased 26% to AUD 0.17 per share, with eight cents fully franked.

• SaaS revenue CAGR was 31% over five years; non-recurring revenue CAGR was 2%.

• R&D investment totaled AUD 28 million, with AUD 14.1 million capitalised for the first time.

• No external borrowings; peak cash balance in August 2024 was AUD 110 million (unaudited).

Outlook and guidance

• Target ARR growth remains at 15%, with confidence in achieving this due to a strong pipeline and deferred deals expected to close.

• Margin improvement is expected, but some margin will be reinvested to drive organic growth.

• Continued investment in people, innovation, and operational scalability to support organic and M&A-driven expansion.

• Build product expected to win customers outside New Zealand in FY2025.

• Strong financial position provides significant capacity for further investment opportunities.