Reckon (RKN) H1 2024 earnings summary

Executive summary

• Group revenue reached $28.4m for HY24, up 1% year-over-year, with EBITDA increasing 6% to $11.7m and strong cash generation supporting ongoing investment in cloud-based products.

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

• Focused on SMEs (accounting/payroll) and legal firms (practice management/workflow), with over 109,000 cloud SME users and 300,000 employees paid via products.

• Transition to a fully cloud-based product suite advanced, with strong growth in cloud revenues and user numbers.

Financial highlights

• Revenue rose 1% year-over-year to $28.4m; EBITDA up 6% to $11.7m; normalised NPAT at $3.1m after adjusting for a prior year tax benefit.

• Operating cash flow after capitalised development costs was $4.3m, up 14% year-over-year; $7m invested in development.

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

• Recurring revenue grew 2% year-over-year to $26.3m; 93% of Business Group and 100% of Legal Group revenue are subscription-based.

Outlook and guidance

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

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

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