Reckon (RKN) H1 2024 earnings summary

Executive summary

• Generated $28.4m in revenue, $11.7m EBITDA, and $3.1m NPAT for HY24, with strong cash generation and a net cash position of $0.9m.

• Declared a fully franked dividend of 2.5 cents per share, to be paid in September 2024, consistent with the prior year.

• Focused on two main markets: SMEs (accounting/payroll) and legal firms (practice management/workflow), with ongoing transition to a cloud-based product suite.

• Over 109k cloud SME users and 300k employees paid via products; nQ Zebraworks platform serves 12 of the top 20 global law firms and 40% of the AmLaw 200 in the US.

• Business Group's cash generation supports ongoing investment in cloud products across both business and legal segments.

Financial highlights

• Revenue up 1% year-over-year to $28.4m; EBITDA up 6% to $11.7m; normalised NPAT at $3.1m.

• Operating cash flow after capitalised development costs was $4.3m, up 14% year-over-year.

• Net cash position of $0.9m at 30 June 2024, following repayment of $3.8m in debt.

• Dividend of 2.5 cents per share fully franked declared.

• Net tangible assets per share improved to negative 10.8 cents (from negative 12.7 cents at December 2023).

Outlook and guidance

• Ongoing investment in cloud-based products to drive future growth, with a focus on the US legal market.

• Transition to Reckon One codebase expected to expand business options and value creation.

• Board anticipates paying one dividend annually following the half-year.

• Continued focus on scaling cloud offerings and enhancing product features.